All in all, 2019 was a pretty strong year for the economy.
Job growth was brisk, with both inflation and interest rates low. Economic growth was decent as recessionary fears have abated. Consumers remain confident, highlighted by solid holiday sales.
But this doesn’t mean everyone is prospering. Here are some money and finance trends to watch for in the coming year:
Continuing debt overhang
Now 10 years into the economic recovery, plenty of Americans are only treading water. Pay raises have been spotty, and many people continue to live paycheck to paycheck. Too many households still lack emergency funds, let alone long-term investments.
Some 82% of people who participated in a survey released this month by Fidelity Investments said they’re in a similar or better financial position compared to last year. Yet in the same poll, respondents revealed continuing anxiety about making ends meet and keeping debts under control.
Dealing with unexpected expenses was the top concern among respondents heading into the new year. Another was keeping a lid on debts. The top three New Year’s resolutions cited by respondents are to save more, pay down debt and spend less.
Many individuals still aren’t prepared to meet unforeseen money pressures.
“A large portion of the people I talk to in a given year find that their financial troubles come in steps that cause significant hardship: medical debt, a job loss, a major car repair, a family emergency,” said Jonathan Walker, executive director of the debt-focused Elevate Center for the New Middle Class in Fort Worth, Texas.
Yet many people just keep adding debt until the hurdles eventually become too high, with unexpected challenges finally pushing them over the edge, he said.
Retirement help coming
Plenty of Americans are unprepared for retirement. Reasons include not saving enough, making premature withdrawals and not having access to 401(k) plans through work.
That could start to change now that the SECURE Act, with broad bipartisan support, was passed by the House of Representatives and the Senate this month as part of a federal spending bill.
Among other things, the legislation would expand access to retirement-savings programs for part-time workers and people employed by small businesses, by providing employer incentives and making it easier for small businesses to band together to create 401(k) plans and benefit from economies of scale.
In addition, it would make annuities available in workplace 401(k) plans, providing investors with a way to lock in guaranteed income for life.
The legislation also would tweak Individual Retirement Accounts. Seniors with traditional IRAs who don’t need to spend their money immediately could delay required minimum distributions until age 72, up from 70½ currently. Also, older workers could continue to sock away money into IRAs. Currently, contributions must stop after age 70½.
The IRA changes reflect “the reality that people are living longer today,” said Paul Schott Stevens, president and CEO of the Investment Company Institute.
Good investment results still likely
It might be hard for the stock market to repeat a year like 2019, with the Dow Jones Industrial Average and other barometers up more than 25% through mid-December. But solid economic growth, low interest rates and other factors create a backdrop where the market’s positive momentum could persist.
“The remarkable longevity of the (economic) expansion and a continuation of low inflation and unemployment are all significant positives,” said J.P. Morgan’s markets insight team in a December forecast.
original article: https://www.usatoday.com/story/money/2019/12/22/2020-money-and-investment-trends-note-i-e-more-retirement-help/2726505001/?utm_source=feedblitz&utm_medium=FeedBlitzRss&utm_campaign=usatodaycommoney-topstories