Recession leaves families' net worth static -- or worse
(CBS News) EMMAUS, Pa. - The great recession lasted 18 months but it wiped out two decades of financial gains.
The Federal Reserve said the median net worth of American families, adjusted for inflation, fell back to where it was in 1992, the biggest drop in wealth since the Great Depression.
Rick Snyder has proudly watched his sons grow -- while he's watched his own future, his nest egg, shrink.Weekly Jobless claims rise to 386,000
"I gain, I lose, I gain, I lose... and I really thought I'd be a lot better off by this point than I am now," said Snyder.
The divorced 54-year-old sells holiday decorations and makes $80,000 a year, which puts him above average for Lehigh County Pennsylvania where he lives.
His 401(k) dropped 40 percent during the economic crisis. It is up, a bit, to a total of $150,000 dollars but his investments are not keeping up with inflation.
"I'm planning (to retire) and hoping but, financially, will I be able to? I don't know," said Snyder.
He worries retirement might not come until he's 67 and maybe later.
"I'm not getting ahead," he explained. "I like to use the term - I 'flatlined'... From a decade ago, I'm really no better off from where I was then."
A family's net worth is everything they own minus their debts. The average net worth today is $77,000, about the same as 20 years ago. The biggest reason is the collapse in home values.
Rick Snyder's home is worth less than he paid.
"It hasn't taken as bad of a hit as it has in some other areas but it's still probably down 15-20 percent from what it was at it's high point," he explained.
Near the high point 2007, the average homeowner had $95,300 of equity in their home. That is the part they own free and clear. But in 2010, average equity dropped to $55,000.
Tim Watters is a certified financial planner. He said the middle class is getting squeezed.
"There is a lot of disillusionment out there and there's a lot of feelings that it will never get better," said Watters. It often brings people to the point of very sad emotions - people are in tears sometimes."
Many people think of America as a place where the next generation does better.
"I question that now," said Snyder.
Americans at almost every economic level have lost income and just 52 percent are able to save, the lowest level in two decades. Leaving the next generation to wonder how - or if - they'll ever catch up.
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