I love numbers and statistics. So, when the Federal Reserve released its “Report on the Economic Well-Being of U.S. Households in 2018”* it was party time! This report tries to paint a picture of how individuals and households in the U.S. are doing financially. It’s a good read.

Now, please remember that this report is an analysis of a survey done by the Fed (the Survey of Household Economics and Decisionmaking). And surveys are not facts. There are biases that can create subjective results, such as, how participants are chosen and even how the questions are worded. That being said, surveys can give us a good indication of what is going on in the wider population. And while the percentages may vary, most of these financial surveys point to some significant issues in our economic lives.

Generally speaking, the report found that we are doing okay financially. And overall, our economic situation has improved over the last five years (2013 was the first time this survey was taken). 75% of adults said they are doing okay or living comfortably*. That was about the same as in 2017, but 12 percentage points higher than 2013. 56% of respondents said they are better off than their parents, with only 20% reported being worse off. A scary response showed that if faced with an unexpected expense of $400, only 61% could cover it with cash or savings, while 27% would need to borrow or sell something, and 12% would not be able to cover it at all.

As you might expect, I tend to focus on the retirement aspect of the report. And though the numbers seem better than I’ve seen in the past, there is still significant concern. Only 36% of non-retired adults said their retirement savings was on track, with the percentage increasing with age. While only 26% aged 18 – 29 believe they are on track for retirement, that number increased to 45% with the 60 and over crowd. Interestingly, those under 30 felt they were on track if they had at least $10,000 in retirement savings. For those 45 – 59, the number was $250,000.

Defined contribution plans (401(k), 403(b), etc.) were the most common vehicles for retirement savings, followed by non-tax qualified accounts (regular savings or non-IRA investment accounts) and then IRA accounts. Only 22% of people reported having a pension plan (aka defined benefit plan). For all non-retiree respondents, 26% reported having no retirement savings or pension plan. And, for those in their 60’s, that number was still 13% (another scary response).

These types of reports serve to remind us that we can do better. As individuals and as a society, we need to be aware of and participate in our financial success. I often get the question, “how much money will I need to retire?” And to me, that question cannot be answered off the cuff. As each investor is unique, there is not a universal number that fits for everyone. But, it’s important to engage this situation early and find out what needs to be done. So, speak to your advisor, create a plan, and set yourself up for success!

 

 

 

*All data are from the “Report on the Economic Well-Being of U.S. Households in 2018” – Federal Reserve Board of Governors

**Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (“CFS”), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. Verity Credit Union has contracted with CFS to make non-deposit investment products and services available to credit union members.

Gavin Chinn, CFS* Financial Advisor

Check the background of this investment professional on FINRA’s BrokerCheck.

An Investment Advisor registered through CUSO Financial Services, L.P., Gavin has 22 years of experience as an advisor in the Puget Sound area.

“I believe every client is unique and deserving of a personalized financial plan that will help them reach their individual financial goals. Before I make any recommendations, I like to get to know my clients. By asking the right questions, and developing an honest, trusting relationship I can really get a sense of what’s going to work best for them.”

Gavin graduated from the University of Washington with a BA in Business Administration and started his financial career with US Bank in the Investment Department. Prior to joining Verity in 2006, he spent eight years with Piper Jaffray.

So what is Gavin’s vision for his dream retirement?

“My dream retirement would be absolutely worry free: financially, emotionally, and in every aspect of life. My finances would be in order so expenses for travel, luxuries, and gifts for the kids, grandkids, and great-grandkids would be taken care of. My kids would be financially sound, so I would be confident in their prosperity. This would give me the freedom to travel and play and do whatever it is I want to do.”

When Gavin’s not working, he enjoys spending time with friends and family, watching Husky football, and taking weekend trips around the Northwest.

Gavin is registered to transact securities business in the states of WA, OR, CA, AZ, FL, HI, ID, IL, MN, NM, NY and VA.

*Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (“CFS”), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. Verity Credit Union has contracted with CFS to make non-deposit investment products and services available to credit union members.

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