Could a Life of Crime Ease the Cost of Living?

Matthew Carr By Matthew Carr
Emerging Trends Strategist

Market Trends

Managing Editor’s Note: With U.S. consumer debt at an all-time high, we know Americans are spending rather than saving. Senior citizens are no exception. Roughly 65% of those 55 and older are carrying debt into retirement, and the average baby boomer has just $50,000 stashed away.

But this trend isn’t unique to the United States. The article below sheds light on an East Asian country where the dangerous combination of a savings decline and massive demographic shifts has birthed a startling phenomenon within the country’s elderly population. If you think this could never happen in America, think again…

Japan is in crisis.

The very fabric of the country’s society is changing. And the impact is being felt across industries… and across the global economy.

It’s something American retirees – and American citizens in general – need to sit up and take notice of.

Because in Japan, the elderly are on a crime spree… And they won’t stop.

At first glance, it may seem funny. But it’s not.

In 2005, 5.8% of criminal arrests in Japan were of people 65 years old and older…

Today, it’s 20%.

That’s not a typo.It’s a disturbing reality…

One-fifth of all criminal arrests in Japan are of elderly individuals.

Even worse, the chance of them becoming repeat offenders is 70% within five years.

Part of the problem is they’re lonely and bored. And they simply don’t fear the legal ramifications.

But the biggest part of the problem – the part the rest of us must pay attention to – is that prison is an upgrade.

Most seniors in Japan work low-skill, low-wage jobs. The average salary for workers 65 and older in Japan is less than $29,000 a year. That’s 19% lower than the average for American seniors.

In addition to that, they have nothing saved.

The sad truth is many find their situation so unpleasant, prison is a step up.

Because, once arrested, you’re guaranteed a roof over your head, you’re fed three times per day, and you receive health checkups and treatment.

In Japan, prisons are becoming government-run nursing homes.

And it’s going to get worse. Japan’s demographics are unenviable. The country’s population peaked in 2009 and will be declining for the foreseeable future. Currently, 27% of the country’s population is over 65.

For comparison, by 2060, the percentage of the U.S. population that will be 65 and older will jump from 15% to 24%.

But by then, 60% of Japan’s population will be over 65.

Here’s the main reason so many Japanese seniors are resorting to crime…

They aren’t saving.

In the mid-1950s, Japan’s household savings rate was a robust 12%. That grew and peaked at 23% in the mid-1970s.

But due to the Asian financial crisis and a rapidly aging population, the savings rate has since declined. Today, it’s just 5%.

Sadly, the U.S. is experiencing something similar. Our savings rate has been in decline since the 1970s.

Currently, it’s around 5%. But for the top 10% of U.S. households, it’s 12%. And for the top 1% of earners, it’s 38%. So the more you earn, the more you’re putting away.

Now, the general rule is as follows…

By the time you’re 35, you should have at least one year’s salary tucked away. By 40, you should have two times your annual salary saved… By 50, you should have squirreled away four times your annual salary.

And by 67, you should have eight times your annual salary in reserve.

Of course, reality is different from the ideal…

And in countries like Japan, it’s causing crime among seniors to surge.

The dire straits facing Japan’s seniors are something we should all learn from. They should be a warning. Too many Americans are falling behind in their retirement planning and investing.

We want to spend our golden years with our children and grandchildren. Not sitting in prison just so we can be fed.

Good investing,