The changing middle class

As the income gap widens, Americans are forced to make hard choices in regards to their healthcare, retirement and saving. In these clips, panelists discuss the current status of the American Dream and what you can do to get ahead financially.

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HOST: Isn’t it something rather different that the middle class is having a difficult time putting any money away now?

DAVE: Yeah, it’s deeply frightening because the way we do retirement now has radically changed over the past 30 to 40 years. We used to have this basic idea of a pension, where if you work hard, your company is contributing to it and when you retire, it’ll be there for you no matter how long you live. Now you’ve got a 401K and it’s up to you. You’re supposed to figure out how long you’re going to live, how much money you’re supposed to put away every year and how to invest it.
FEMALE: I grew up in India, where people don’t have any publicly-provided social security. They have to save for their children’s education. They have to save for their own retirement and they make meager, meager money.

The problem is, Americans have lost the habit of saving.

HOST: I want to point out that David was huffing. There was an audible huff during that.

DAVE: Yeah, I was a little frustrated. It’s you know, I think you’re kind of blaming the victim here. Certainly everyone here probably knows someone who is you know, wasteful with their money and is not saving just because of personal choice. But really, the basic story here, over the past several decades is that wages have been stagnant and the price of basic middle class goods, like housing, health care and education have gone through the roof. So people have had to go into debt to afford a middle class life. So they don’t have money to put away.

It’s not just about a few people’s choices. It’s about the kind of things that we should be able to afford, we can’t afford now and that makes it much, much harder to save.
HOST: Isn’t it something rather different that the middle class is having a difficult time putting any money away now?

DAVE: Yeah, it’s deeply frightening because the way we do retirement now has radically changed over the past 30 to 40 years. We used to have this basic idea of a pension, where if you work hard, your company is contributing to it and when you retire, it’ll be there for you no matter how long you live. Now you’ve got a 401K and it’s up to you. You’re supposed to figure out how long you’re going to live, how much money you’re supposed to put away every year and how to invest it.