For many years, $1 million seems to be the standard when it comes to the amount of money you should set aside for retirement. However, even if it seems impossible to achieve for some, the truth is that it might not actually be enough to cater to your care during retirement. Inflation, the uncertainty of Social Security benefits, and longer life span all contribute to make the long-touted savings target inadequate.

Recently, there was a survey conducted among 226 investment advisers. Around 71% stated that $1 million is no longer sufficient for the needs of a regular American family. Many advisers recommend doubling or even tripling the amount. Younger generations are seen to be most vulnerable to the economic problems. When they grow older, they will inherit the problems caused today. The recommended savings (based on generation) are as follows:

• Generation Y (18-26 years old): should have to save at least $2 million. Some advisers even stated the figure at $3 million to remain on the safe side.
• Generation X (27-42 years old): should set a goal of $1 million. Around forty percent of the respondents believe that they should save $3 million.
• Boomers (43-64 years old): the recommendations for baby boomers seem to be mixed. 35% said $2-$3 million is important. Meanwhile, 30% said $1.5-$2 million may be enough.

Based on the survey, it seems that the only generation that comes close to living comfortably for $1 million are seniors. Experts say that $500,000 to $1.5 million is enough for many families under that age bracket.

It is true that in general, people tend to spend less during retirement. However, unforeseen circumstances like inflation or illness can easily wipe out savings. It is important to get appropriate financial protection against these risks.

Under normal circumstances, many people struggle to make ends meet.  But during the recession, the situation becomes even more desperate. As a result, many people are increasingly looking for ways to boost their income. Tighter credit, job loss, and the increasingly popularity of saving has forced many ordinary Americans to be innovative and tap into their networks, skills, and even hobbies.

Jennifer Winslow used to work part-time. While she needed to increase her income, she also didn’t want to give up the flexibility of part-time work. She turned to baking. Around five years later, her thriving bakery in Winslow, Maine has become an inspiration to people who want the same flexibility. Fortunately for individuals who have limited baking skills, there are many other ways to make extra money.

According to Gail Cunningham from the National Foundation for Credit Counseling, the key is to discover your skill or “what you think would be fun to do.” For example someone familiar with web development can offer courses that teach people how to build basic websites. Meanwhile, renting out a room in your house, getting paid for your opinion, or selling extra furniture can provide much-needed cash.

Selling It – this is probably the fastest way to generate cash. If you have unused or unwanted stuff in your home, you can make hundreds or even thousands of dollars from selling them. Set up a garage sale, auction things on eBay, or join flea markets. Some people have discovered astounding success on eBay. In fact, their products became so in-demand, they turned it into a business.

Renting It – real estate is the biggest asset of majority of people. Rent out a room, grab a roommate, or even rent your entire apartment. It is a good and almost hassle-free way to generate cash when you feel strapped. In the same way, cars can also be rented. Just be sure to complete all legal requirements before you get started.

Doing It – that means using your talent, capability, and interest. It can be as simple as teaching a class, working as a caddy, or cooking for small businesses. A lot of people also earn extra income by watching their child friend after all. One lucrative area to get into is to be a tutor. Pay ranges from $30 to $100 an hour.

Already, America’s dept will reach $13 trillion this year. By 2020, this will increase to $22 trillion. If this figure isn’t disturbing enough, consider the hidden cost of debt. There are potential debt bombs that aren’t included within the budget analysis of the US economy.

When talking about US debt, it typically includes two figures including the debt held by the public and what the federal government owes to trust funds such as Social Security and Medicare. Revenues from those programs were used to cover other outlay. Debt to these establishments is approaching $5 billion.

These figures may be big but what’s even more worrying is the debts that are not included in the books. Among these are:

Fannie Mae & Freddie Mac Losses

As giant mortgage lenders, these companies have enjoyed implicit government backing for years. As a result, investors were falsely assured that if anything went wrong, Uncle Sam would step in. Something did go wrong, and it went wrong in a big way.

The Congressional Budget Office (CBO) did an account for both companies. Though the figure isn’t clear what the total impact of the companies will have on the congressional budget, Amherst Securities said that it can reach $448 billion – with some portions covered by outside parties. Total loss to the government may reach $370 billion in 2020.

Unfunded Promises

The accrued debt of the government to Social Security and Medicare won’t be easy to pay, especially given the increase in government spending and drop in revenue. Len Burman from the Syracuse University said that “Lawmakers need to acknowledge they have no way of funding them right now.”

But this future entitlement was not included in the current budget. Within the next decade for Medicare and by 2037 for Social Security, these organizations won’t be able to collect enough to cover the benefits promised. The government will need to make up for the difference by borrowing.

Cost of Tax Breaks

People love tax breaks. However, for the government, this means lower revenue. While no one wants to abolish tax breaks, the government budget should treat it as discretionary spending to reflect to true cost of tax breaks. Through this, lawmakers can look at figures and recognize the cost associated with their decision.

The severance package is supposed to shoulder the financial shock of unemployment. However, for many laid-off workers, it also provides a false sense of security. Take the example of Paul Joegriner. Since he was laid-off as CEO of a small bank in March 2008 and with it his $200,000 pay was gone, he hasn’t worked since. His lifestyle including that of his family remains in comfort though due to savings and the severance pay.

He has been offered several jobs, all below what he used to earn. He decided to decline in the hope of landing something better. Mr. Joegriner, along with countless others in the US, may be classified as members of what is described as the “severance economy”. These are the individuals who used their severance pay to maintain their old lifestyles. Most lost their jobs in 2007 and 2008. Up to now, many remain unemployed.

Michelle Patterson was working for a publishing company when she was laid-off in January. However, she wasn’t concerned at the start because she has $20,000 from savings and severance combined. Eating out, drinking coffee at Starbucks, and paying for beauty treatments inevitably took a tool on her finances. A few months later, there still wasn’t any work, her condo already in the market for six months had no buyer, and her money is almost gone.

Like Mr. Joegriner, she had to take drastic cuts on her spending. Ms. Patterson doesn’t go to fancy salons anymore neither does she go to Starbucks every day. Similar to others in her situation, she doesn’t find it easy to adjust from a $140,000 to unemployment. However, Ms. Patterson muses that she should have cut her spending earlier.

Lawmakers have extended unemployment benefit for up to 20 weeks but t is expected to run out by the end of the year. 1.3 million Individuals are still depending on it. In addition, companies have trimmed severance packages from 21.8 weeks to 12.5 weeks salary. Some are even eliminating it altogether. Certain sectors including the auto and the financial industry have borne the brunt of the damage. Changes in the industry may mean that the eliminated jobs will not come back; the standard of living of its workers might take a permanent hit.