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Divorce, which has been so common among Babyboomers is a huge negative on people's finances, so that can certainly affect savings. The other one that has been left out is that a lot of boomers have also been helping support their children even after paying for their college and getting them started in life. Consider also the Boomers who are raising their grandchildren. That doesn't help one save for retirement. There's all kinds of stories out there that help explain why that graph is probably not too far off.
My sister is in her late 50's and lives paycheck to paycheck. She rents an apartment and works two jobs but spends it all and has no medical insurance. When she was younger, she waitressed at some very nice establishments in a large city and always had well to do boyfriends and partied a lot. But she did not claim much of the income so her social security will be low. At one time a wealthy boyfriend set her up with a small house but she did not like living in the suburbs or the maintenance so sold it and moved to Hawaii for a couple of years until she spent the equity. Recently she went through a small inheritance in a similar manner.
She was very attractive in her younger days and many men were gaga about her but she is high maintenance and never married. Now her glory days and the men are gone. But she has a good attitude and is charming and a hard worker. Unless there are some health problems, she might be able to work until an old age and perhaps find a guy who can support her or pool their resources.
I'm 69, and I'm still working full time in IT; next year I'll start collecting the max amount from social security. I'll have $100K+ in my 401k and plan on working a year or two more. By 72 I should be able to match about 70% of my current level of income and plan to make up the rest with some freelance work (if I live that long, of course). My focus has been on making sure everything's paid off, so I have a small buffer for immediate needs in checking and am looking to build up savings over the next couple of years so I have 6 mos. living expenses there. So for now, I fit into the "no savings" category but that doesn't mean I'm without resources.
What would totally screw things up for me is a major medical emergency. That's not something I'm prepared for; I'm having hernia surgery next week, and will probably have to finance it. I now wish I'd done a better job of planning for retirement 15-20 years ago, but it is what it is and I have to live with the consequences of my choices. For those who are past 60 and haven't prepared, I'd say it's never too late to start and you can recover from poor planning to some degree by being aggressive about saving and cutting back on expenses. Something put away is better than nothing.
If it wasn't for the fact that she's institutionalized with severe dementia and with SSDI and Medicaid paying for her placement, the ex would be in that boat. When we divorced she received what, at the time, was half my retirement/pension funds. Rather than letting them sit and roll-over into a pension account for herself she took them lump sum and promptly spent them all. She did precisely that when her second husband, also a government employee, was killed in a car accident.
Now at age 65 she'd be near destitute, social security reliant - mine or his - and likely bleeding our children dry.
I meant no disrespect regarding pensions. My grandparents, who moved to CA to work at Douglas in the 40s making airplanes, both worked hard, saved well, and earned every penny of their pensions. My point was that those kinds of pensions just aren't there in the private sector anymore, at least for the working and middle class (I'm sure there are exceptions, but not too many). I think that that security is not easy to find in today's economy, and a lot of people don't have the financial savvy to adapt and keep on top of their 401ks. I often wonder what will happen to all these retirement communities in the next generation, because I don't think many will be able to afford that lifestyle.
When this thread first started, and was slow in getting any responses, I was mighty curious. Then once the responses started coming in, I was starting to get discouraged and 'down in the dumps'. It is funny how emotions ebb and flow. Today, I am thankful that I'll most likely be "okay" in my retirement and will be able to do some of the things that are planned down the road.
I've worked all my life with no breaks (extended periods of time off) whatsoever. My SS will be enough for me to live on and I have large savings and investment funds.
Girlfriend A always made fun of me for "working for the man," working two jobs and never taking time off to "enjoy my money" while she worked jobs where she was paid under the table. She also took long periods (3 to 4 years) off at least six times in her life. Now she is 56 and having health problems. She could probably get SS disability, but since she did not have reported earnings, it's only $520 a month. Not enough to live on.
Girlfriend B (55) worked very low paying jobs and also took lots of time off -- one was five years off when she received an inheritance (and blew through it in that time). She has some serious health problems and may not be able to work much longer. Due to not working, her disability would only be $612 a month. Her rent is $900.
If it wasn't for the fact that she's institutionalized with severe dementia and with SSDI and Medicaid paying for her placement, the ex would be in that boat. When we divorced she received what, at the time, was half my retirement/pension funds. Rather than letting them sit and roll-over into a pension account for herself she took them lump sum and promptly spent them all. She did precisely that when her second husband, also a government employee, was killed in a car accident.
Now at age 65 she'd be near destitute, social security reliant - mine or his - and likely bleeding our children dry.
It is very common for people to want money up front, so they can live high on the hog and spend it quickly.
Exactly. There are lots of people who never had "careers", just a series of jobs. Life was focused on getting the next rent together, paying the next car insurance bill, buying food, etc. There was no time or money to think about some distant future. I myself have been in that situation, but fortunately I DID stick with one employer, and there was a pension plan involved. I never had the bucks to save much, though. I needed my paycheck for the bulk of my working years to support myself and my daughter.
I know a woman who has been married and divorced three times. Never made great choices, never made much money. She works in an office of a small electrical contractor, and on weekends she waitresses at a diner. She is 60 now. I bet she is going to be working that diner job till her legs give out.
One of the women in my condo complex just quit her supermarket cashier job. She is 80.
There are lots of people without savings or retirement funds. For every person worried about eating Ramen because they only have 1.7 million saved, as someone said in the other thread, there are many more who plan to live on SS alone. They are also people who already know how to live without some of the stuff that wealthier people consider essentials, so they will survive.
This is something the arrogant, smug people who criticize people for not saving or not saving enough never think about. Some people just don't have the wherewithal to save great deal of money like good paying jobs. So many Americans are just focusing on how to get by on their paychecks and do the best they can.
I live off SS and a tiny pension. It works because I make it work.
GuyinSD---that graph is sobering---but it does specify "savings account." The article seems to allude to retirement savings more generally, but I wonder if this graph is just limited to actual savings accounts people have at banks. I have a checking account, but not a savings account. I have investments at a brokerage firm, but none of it would be considered a savings account, so technically I would fall under the 22.8 of Boomers who don't have a savings account....
But your investments would be money available to you in your retirement, would they not? Thus taking you out of that 22.8%.
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