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"Study after study shows that Americans are not saving for retirement like they should, and a new survey finds that nearly one third of people who have some sort of savings plan have amassed less than $1,000 for retirement. The survey titled “Preparing for Retirement in America,” by Employee Benefit Research Institute (EBRI) and Greenwald and Associates, finds that only 65 percent of workers have any savings for retirement, a number that fell below the 75 percent figure from 2009. But 28 percent of workers report that they have saved less than $1,000 for retirement, and almost 6 in 10 Americans say that their financial planning needs improvement. Additionally, 34 percent say they have made no effort at all to saving anything or make a retirement plan."
There is a link in the article to the actual study.
What do you predict the 62% (28% that saved less than $1,000 and 34% who say they have made no effort at all to save for retirement) will say when they reach retirement age?
Well let's see. If only 65% have started saving for retirement, I would guess they are generally over the age of 35. It is very hard for that 35% group (who are under 35-40) to start saving for retirement when they are trying to get their lives started, to invest in their future careers, and to start families. Frankly, this does not seem like a big deal to me, as long as folks try to 'catch up' the further along in thier careers they get.
The unfortunate part of this, of course, is that those few dollars that can be saved early are the ones that will grow the fastest, so saving anything as a young person is a huge benefit to retirement dollars down the line.
What bugs me is those who never intend to save anything, even when they could, then complain down the line that the 'government' isn't doing enough for them--as if that is the purpose of government.
Divorce and/or the downturn in the economy can have a big say in that.
Unexpected job loss at a critical age and most firms not hiring those who are in their 50s can wipe a person out. Maybe people should not stereotype or harshly criticize when they don't really know the details or can't relate to what many older Americans are now going through.
Perhaps I am belaboring the obvious, but the tacit implication of some of the quotes from the article is that if people have made no retirement plan and have no savings whatsoever, that they will have nothing in retirement and will be totally destitute. That thinking ignores Social Security. Someone with 35 years of earnings at more than minimal levels who is able to wait until full retirement age to draw SS retirement benefits will be able to live in reasonable, albeit rather frugal, comfort, even if there are no other savings.
Now I am not arguing that such total reliance on Social Security is a good idea, nor would I be personally satisfied with such a non-plan and its concomitant life style.
So while it is a bit scary and also puzzling that so many people have no plan and/or no savings at all, the picture is not totally bleak either. Excellent rationale for the mandatory nature of SS, which is a real life saver on a societal level.
The article is another alarmist article. When you look at the actual survey (which is linked in the article), the retirement picture is not nearly as gloomy as the article portrays it to be. The actual survey asked two separate questions pertaining to retirement and savings, which the article seemed to lump into a single one to support its alarmist conclusion:
was the individual or couple saving for retirement?
how much does the individual or couple in savings and investments excluding the value of the primary residence and any defined benefit (pension) plan value?
IMO, excluding the value of the primary residence and any pension benefits makes many respondents' situations appear much more dire than they may actually be. Secure, defined benefit pensions can easily have equivalent values of $1 million or more, and many people, especially those living in high COL areas, intend to use their equity in their paid off homes for some of their retirement funds.
I will also add that while the survey looked at income level, education, and health, it did not look at respondents' ages. Certainly younger workers in their 20s and 30s are going to be thinking less about retirement, especially if they don't have some kind of employer sponsored retirement plan, than older workers.
I agree completely that you need to know whether there is a pension, and the age of the person asking the question. If you have asked me that question when I was in my 20's I would have said I didn't have much, if anything, saved for retirement. Now that I am about to turn 60 the answer is very different.
The article is another alarmist article. When you look at the actual survey (which is linked in the article), the retirement picture is not nearly as gloomy as the article portrays it to be. The actual survey asked two separate questions pertaining to retirement and savings, which the article seemed to lump into a single one to support its alarmist conclusion:
was the individual or couple saving for retirement?
how much does the individual or couple in savings and investments excluding the value of the primary residence and any defined benefit (pension) plan value?
IMO, excluding the value of the primary residence and any pension benefits makes many respondents' situations appear much more dire than they may actually be. Secure, defined benefit pensions can easily have equivalent values of $1 million or more, and many people, especially those living in high COL areas, intend to use their equity in their paid off homes for some of their retirement funds.
I will also add that while the survey looked at income level, education, and health, it did not look at respondents' ages. Certainly younger workers in their 20s and 30s are going to be thinking less about retirement, especially if they don't have some kind of employer sponsored retirement plan, than older workers.
Home equity is usually fairly illiquid, which is why a lot of people exclude it. Still, it's not as if the home has no value, or that the equity can't be realized over a medium term.
I know a few people personally who moved from their rich states up north to somewhere cheap in the South or Midwest. They'd sell the house in the rich area then move to the low cost area, still living mortgage free, and possibly pocketing hundreds of thousands of dollars after all costs are accounted for. For people in low cost, poor areas, they can't count on this, but people from the rich, populous states often can.
IMO, the amount of money you can pocket at retirement from selling your home is one of the biggest arguments for being in a rich, coastal area.
I totally agree with the posts here criticizing the article. Again another alarmist article. Whenever I see figures like $7 million it just screams of writers trying to get attention and clicks. When I saw the figures the first thing I wondered was the age of the respondents.
No doubt Americans are not saving enough, and I have no doubt there is some validity to the $7 million figure. But it's not the entire story.
Well in order for the government to rush in and fix it we must have a crisis first.
Constant MSM articles on the "retirement crisis" will "create" that problem.
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