USA Today has an article calling the mass affluent the new rich. This relabeling seems to be spinning it so that this group is a suitable target for redistribution (ie higher taxes). The mass affluent generally do not consider themselves to be rich and have just executed the lifeplan that all financial people tell people to follow.
They tell people
– get a good education
– get a good job
– save your money for retirement and college for your kids
UPDATE – I updated the title from “Mass Affluent are political and economic target” to “They are coming for your retirement and college savings”. In Google+, someone accused me of being a troll for the Koch’s, so in for a penny then in for a pound. I would disclose that I am in what is described as the mass affluent class. I knew when Bush 2, congress and Obama was running up the big deficits where the taxes and money would be coming to pay it. It was immediately obvious that those who are already paying taxes would pay more taxes. The only other alternative would be to have massive spending cuts at least back to Clinton level (and presidents prior for decadesChart below from the Congressional Budget office) spending.
Fed government spending at 20% of GDP was what was done for decades prior to 2000. Reducing by 6% GDP is possible. I think massive defense spending cuts can be done without harming long term US interests. The active enemies of the US are weak and the US will not fight the bigger militaries (Russia and China). The US still has nuclear weapons. Retirement age can be increased 3-4 months per year and other developed nations spend half the US level as a percentage of GDP on healthcare.
About 20% get to some degree of success. Although even if they save 1 million
Fully 20% of U.S. adults become rich for parts of their lives, wielding outsize influence on America’s economy and politics. Made up largely of older professionals, working married couples and more educated singles. The “new rich” are those with household income of $250,000 or more at some point during their working lives. That puts them, if sometimes temporarily, in the top 2% of earners.
Even outside periods of unusual wealth, members of this group generally hover in the $100,000-plus income range, keeping them in the top 20% of earners.
In a country where poverty is at a record high, today’s new rich are notable for their sense of economic fragility. They’re reached the top 2%, only to fall below it, in many cases. That makes them much more fiscally conservative than other Americans, polling suggests, and less likely to support public programs, such as food stamps or early public education, to help the disadvantaged.
The AARP (American Association of Retired Persons) has a retirement calculator. Entering in 1.06 million in savings at retirement means that even with social security for a husband and wife they drop to just under $100,000 per year in retirement income. The $1 million savings level is what many are targeting.
Obama signals more efforts to redistribute out of the mass affluent
Last week, President Obama asserted that growing inequality is “the defining challenge of our time,” signaling that it will be a major theme for Democrats in next year’s elections.
New research suggests that affluent Americans are more numerous than government data depict, encompassing 21% of working-age adults for at least a year by the time they turn 60. That proportion has more than doubled since 1979.
Sometimes referred to by marketers as the “mass affluent,” the new rich make up roughly 25 million U.S. households and account for nearly 40% of total U.S. consumer spending.
Just recoverying from the financial crisis and recession
Bank of America’s Merrill Edge Report is a semi-annual study that offers an in-depth look at the financial concerns, priorities and behaviors of mass affluent consumers, defined as people with $50,000-$250,000 in total household investable assets. The research reveals that this group, which consists of approximately 33 million households in the United States, is finding its financial equilibrium as investing in retirement moves to the top of the financial to-do list and paying off debt slides to second place. While preparing for retirement is a priority for both men and women, and they both plan to retire at age 66, there is one major difference: men are planning to save $232,000 more than women.
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
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