4 Pitfalls For Building Wealth For Retirement

Is your retirement in jeopardy since the recent economic downturn? You only need to watch the news once to know that things are not looking good for the future. More and more, people are realizing that the financial status quo just is not working the same any more.

Any wealth building strategy must take these four economic factors into account in order to have enough money for the future.

The American Bankruptcy Institute says that in the first half of 2010, the filing rate was 14% higher than it was for the same period last year. And it gets worse -- the Institute also says that due to debt, unemployment and the economic downturn, we can expect to see more than 1.6 million bankruptcies by the end of the year.

To make matters worse, the Institute also says in a study it is releasing in its September issue of ABI Journal, that Americans over the age of 55 are declaring bankruptcy more than any other age group. From 2002 to 2007, bankruptcies for this age group have risen 61%.

If that is not bad enough, "Baby Boomers" accounted for 42% of all the filers in 2007. The financial condition of those in or close to retirement was exacerbated by the housing crisis. The housing collapse has left many in this age group with little or even no equity in their homes.

Let's not forget about what inflation does to your wealth building strategy. For the past 30 years, inflation has averaged at 4.22%. This means that with inflation staying at this rate, something worth $10,000 today, will require over $32,400 to buy it in 30 years.

With inflation at 4.22%, how will your retirement savings add up? If you have put your money into a savings account, the stock market or a 401(k), none of these are helping you build wealth for your future. In fact, a savings account is the only vehicle that has actually been making money recently -- but you still fell behind as inflation exceeded your rate of return.

The bad news about Social Security makes us all worry about our retirement.  In 2004, Alan Greenspan said that in the future Social Security benefits would have to be slashed.  As he predicted, here in 2010 there is NO cost of living raise. To make matters worse, Social Security is predicted to go bankrupt by 2037, 4 years earlier that previous estimates. Will Social Security be there at all for your retirement?

By: Bettina Romberg

Article Directory: http://www.articledashboard.com

Bettina Romberg writes about economic issues and how they relate to your wealth building plans for your financial future. Get a copy of her free e-book, "13 Economic Uncertainties That Washington Wishes You Didn't Know" at her blog: www.bestwealthbuildinginfo.com