How Does Your Nest Egg Compare To Most Americans'?

How big is your retirement nest egg compared with most people's? Only 14% of workers have $250,000 or more saved for retirement, according to a new survey by the Employee Benefit Research Institute and Greenwald & Associates.

The other 86% of workers who were queried have smaller amounts of retirement savings. 

Thirty-eight percent have less than $50,000. 

The good news, slim as it is, is that the percent who have at least $250,000 rises to 20% among workers who have a retirement plan. 

Among workers with no plan, just 1% have $250,000 or more in savings.

The magical 2.2 housing ratio between median nationwide home prices and household income – Nationwide home prices still inflated by 30 percent based on 50 years of household data.

Back in 1950 the median home price cost a little above 2 times the annual median household income: 

1950:     $7354 / $3,319 =2.2 

In 1960 the ratio remained roughly the same: 

1960:     $11,900 / $5,620 = 2.1 

In fact, over this ten year period the typical household gained buying power when it came to housing.  Even in 1970 the ratio became more favorable to US households: 

1970:  $17,000 / $9,867 =1.7 

This was the lowest point at the start of any decade in modern history.  After this point, with all the push for deregulation and allowing Wall Street to run rampant prices remained fairly stable only because of the two income household (that is until we hit 2000): 

1980:     $47,200 / $21,023 = 2.2 

1990:     $79,100 / $35,353 = 2.2 

2000:     $119,600 / $50,732 = 2.3 

This was sustained via the two income household:

 After this point, things went haywire.  Incomes went stagnant or dropped yet home prices sky rocketed.  Even today after the severe correction the ratio is still out of sync with 50 years of data:

2010:     $170,500 / $50,221 = 3.3

 

The average American is going to struggle throughout the next decade.  It is hard to see how wages will go up so it is likely that home prices will adjust lower given the magnitude of foreclosures in the pipeline.  People might be jumping up and down about the recent job growth but they are occurring in lower paying sectors.  So this does nothing to justify current prices.  Low mortgage rates are merely a gimmick so banks can use cheap money to speculate on a global scale.  Even with mortgage rates at levels we’ve never seen the housing market remains stalled like an old car.  Why?  Because the actual sticker price is still inflated based on income levels.

DYI