High housing costs, low wages and lousy retirement planning make South Florida one of the nation’s worst places to save money, according to a new study from financial website Bankrate.com.
The study ranked the nation’s largest 21 metro areas based on how easily residents can build wealth.
It found that in Miami-Dade, Broward, and Palm Beach counties, average household expenses are actually $3,600 more than average household incomes. That’s well behind top-performing cities such as San Francisco, Minneapolis, Washington, D.C. and St. Louis, where after-tax incomes exceed expenses.
“In Miami, people’s expenses appear to be out of whack with what they’re making,” said Claes Bell, an analyst for Bankrate.com.
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Only San Bernadino offers a harder environment to save.
Bell cautioned that South Florida’s high population of retirees — who generally spend more than they make — skewed the gap between earnings and expenses. But Miami didn’t perform well in other measures, either.
The local home ownership rate (58 percent) is below the national average (62 percent), meaning many locals don’t have access to the traditional American mechanism for building wealth. Non-mortgage debts such as student loans are high. And only 37 percent of Miamians have access to employer-based retirement plans, reflecting the sizable chunk of workers who are self-employed, work for small businesses, or are kept off-the-books. The lack of mass transit doesn’t help, either.
Without the ability to save for college or retirement, families struggle to be upwardly mobile or deal with emergencies like job loss, car problems and illness.
“Being able to access relatively small amounts of wealth at key times helps families from slipping through the cracks financially,” he said.