A new study of middle class Americans reveals that 20% would rather die than run out of money and even more startling, is that 60% of people are not willing to make any sacrifices to save. These people are finding that saving is more difficult than they ever thought it would be and it's just time to give up, explains financial journalist and author Dan Kadlec.
While most Americans are still feeling the effects of the economic crisis, what is interesting to Kadlec is that in every age group if you participate in a 401K, you have significantly more money than people who don't have a 401K. He finds this to be the most valuable tool we have in solving America's savings crisis.
Kadlec says for those without access to a 401K through an employer, they still need a direct deposit program to put money away on a tax-advantage basis. The "pay yourself program" is a really good substitute but it needs to be set up and a lot of people aren't willing to do that, he says.
For most Americans, social security is their only source of guaranteed income, which is why Kadlec says we've seen a movement towards annuities which can fill that gap as well. Annuities, which are insurance products, work a lot like a traditional pension in that once you buy into it, you get guaranteed lifetime income. Annuities "solve a lot of problems if you can get it done," Kadlec says.
Dan Kadlec is an author and journalist, writing for Time and Money magazines and authoring three books. For more information on him, click here. He spoke with Retirement News Today, providing online retirement news video content. Retirement News Today is a featured network of Sequence Media Group.