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Home › Forums › Financial Markets/Economics › Why American is failing to prepare for their retirement? › UCGal wrote:no_such_reality

February 19, 2013 at 2:13 PM #759821
no_such_reality
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[quote=UCGal][quote=no_such_reality]Well, the right answer is $100.

Yes, that’s right. $100.

If you had a savings account paying 2% over the last five years, you’re exactly breakeven with the official and artificially low inflation rate.[/quote]
But you are ahead of most passbook savings accounts.[/quote]

Yes, and that’s the point. If it was in virtually any savings, MM, or checking account over the last five years, you’re in the hole. If five years ago you grabbed a 4% CD, you’re okay. If you grabbed it in 2008, you’re barely okay (a whole $10 spending money, less taxes on the $21 though) and any time after you’re in the hole. If you grabbed any CDs shorter than 5 years, you’re in the hole.

If you bought the DJIA five years ago, you’re ironically worse off than having bought the 5 year CD and probably soiled your pants in 2009 when you lost nearly half.