"Nearly Half Of Americans Are One Financial Shock Away From Poverty"
A new report from the Corporation for Enterprise Development shows that many Americans are just one financial hit away from poverty, as the nation slowly drags itself out of the Great Recession. According to the report, nearly half of Americans lack enough savings to keep themselves out of poverty for more than three months in the event of a financial shock such as a lost job or medical emergency:
Almost half (43.9%) of U.S. households are living on the edge of financial collapse with almost no savings to fall back on in the event of a job loss, health crisis or other income-depleting emergency, according to a report released today by the Corporation for Enterprise Development (CFED).
The 2013 Assets & Opportunity Scorecard defines these families as “liquid asset poor,” which means they lack adequate savings to cover basic expenses at the federal poverty level for just three months if they suffer a loss of stable income. Included in this group are a majority of Americans who live below the official income poverty line of $23,050 for a family of four, as well as many who would consider themselves middle class. One quarter (25.7%) of households earning $55,465-$90,000 a year have less than three months of savings.
An even more dire picture of American finances has been painted by several other recent surveys. For instance, the Consumer Federation of America and the Consumer Planner Board of Standards found last year that nearly 40 percent of American households live paycheck to paycheck.