Americans are having a hard time handling their finances.[@@]
Witnesses delivered that message here today at a hearing on financial literacy organized by House Financial Services Committee Chairman Michael Oxley, R-Ohio.
Retirement savings experts such as Dallas Salisbury, president of the Employee Benefit Research Institute, Washington, talked about American workers’ low savings rate and penchant for investing in money market accounts that generate little or no return.
Sheryl Garrett, a financial planner from Mission, Kan., also talked about clients’ debts.
Today, some mortgage lenders “are in the foreclosure business, rather than the lending business,” Garrett said, according to a written version of her remarks. “Not long ago, one could only qualify for a mortgage if their total housing expenses did not exceed 28 to 31% of their gross income. Now, I am hearing about people taking out mortgages 8 to 10 times their annual salary. They CAN NOT afford this mortgage, yet they have ?qualified’ for it. Nearly all of their paycheck will go to pay this debt.”
Garrett also talked about the need for Americans who can continue to work past age 65 to do so.