2. US household savings are inadequate to fund an increasingly lengthy retirement. Amid surging government debt and an aging population, future retirees may have to fund more of their retirement themselves. Unfortunately, the post-crisis savings surge predicted by many pundits has yet to materialize, and most US households can no longer look forward to a private sector pension.
The good news is that while the recovery has impressed few, it has been much better than the alternative we were all facing five years ago, and there is still time to avoid, or at least mitigate, the pending retirement crisis. The bad news is that, following five years of post-crisis reform fatigue, neither the government nor US households are showing much inclination to do so.
Russ Koesterich, CFA, is the Chief Investment Strategist for BlackRock and iShares Chief Global Investment Strategist.