We have been talking to thousands of people about the perils of a Great Depression in approximately 20 years. While there are always perils associated with an economic depression, there are things people of varying ages can do to prepare. We regularly tell the 20 and 30-somethings in the audience that they need to start living below their income levels and to start saving now. Any reasonable solution to the economic woes facing our nation will have to include adjustments to Medicare, prescription drug plans, and most likely Social Security as well.
There is good news on the savings front. According to Vanguard Group Inc., the participation in retirement savings plans by 34 year olds and younger has increased over the last decade. Forty-four percent of income earners under the age of 25 now participate in their company’s retirement plan, an increase of 27% from 2003.
This group also has reduced their credit card balance as well. Debt reduction and savings will be extremely important 20 years from now. These two characteristics will go a long way in setting up these people for success in a tough economic time. Tell your children they must start preparing now for what will be tough times in their middle age.
Brian and I hope to start writing a book next year about the coming depression. We will discuss not only the reasons why the downturn will occur, but we will present strategies for success based upon income and age.