February 17, 2013
February 17, 2013
Is chronic, slow economic growth and rising poverty the new normal for America and Americans? Unfortunately, for an increasing number of people, the answer is yes.
According to recent reports, a large and growing portion of American workers who are having trouble making ends meet because of rising costs are being forced to raid their retirement accounts for non-retirement needs, “raising broad questions about the effectiveness of one of the most important savings vehicles for old age,” The Boston Globe said.
In fact, more than one in four – a staggering 25 percent of workers – with 401(k) and similar retirement savings accounts are now using them to pay current bills, new data indicates.
The monetary figure is alarming: A quarter of the $293 billion deposited in such accounts each year is now being drained via loans, withdrawals and out-right cash-outs, “undermining already shaky retirement security for millions of Americans,” the paper said.
The new normal – Faltering finances
What’s worse is that the federal government is broke, too; the country is already trillions of dollars in debt and tens of trillions in the hole for unfunded promises made over the years by pandering politicians who have mortgaged the future of generations of Americans to buy votes today.
Because of their irresponsibility, policymakers will now have to cut the Social Security and Medicare benefits at some point – benefits that millions of Americans who paid into both systems were counting on to make it through retirement. Couple this eventuality with sustained low economic growth, poor employment prospects, stagnating pay scales and rising costs of food, fuel and utilities, and it is easy to see how more Americans will eventually be forced to mortgage their future.