Nearly all retirement savers worry whether their savings will be enough to support their retirement lifestyle. While a number of factors determine how much one can save for retirement, it is more difficult to accurately predict – and plan for – the total amount of your actual retirement expenses.
While there is extensive media coverage regarding Americans’ lack of retirement savings, a much less discussed topic is the growing amount of debt that Americans carry into retirement. Larger mortgages, higher student loans and a greater overall comfort with debt than displayed by earlier generations has increased the average debt for households approaching retirement by nearly 160% from 1989 to 2010, according to AARP.
In the short time since the new U.S. presidential administration was installed, there has been a flurry of policy announcements, and even more policy speculation, spanning a multitude of areas. In the process, an interesting disconnect has emerged between the political and financial worlds.
Here is a compelling example of the bond market’s new reality: even as the yield on the 10-year U.S. Treasury note fell to a historic low of 1.38% on July 5, it remained one of the highest yielding sovereign debt instruments in the developed world. In fact, about 86% of government bonds issued by developed-market countries are yielding less than U.S. Treasuries.