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Earlier this week a plant nearby announced it was permanently closing down and all 110 salary and hourly employees would be out of jobs within 60 days.
For the deep south the plant paid pretty well with most factory workers earning between $20 and $30 hourly plus benefits that were pretty good for the area.
On a personal level this has to be a very hard hit for very few have college or what might be called special skill sets. This has to be devastating for near all of these people with the exception of those few that were very close to FRA of 66, If you were 65 1/2 and planning to retire in six months you'd probably be just fine once over the shock of just missing the bullet but what about the 58 year old worker who might have less than six figures in retirement savings? $100,000 won't last someone 58 years old very long.
Most don't have college degrees or what I would call special skill sets and what are the chances of a 54 year old factory worker landing a $28/hr job with benefits in today's reality? Many came to the factory straight out of high school and chances of finding a job that pays their old rate are between slim and non. The reality is it just ain't going to happen.
Many of those in their middle 50's have minimal savings having just paid off the mortgage and sending the last of the kids off to adulthood.
For someone with 58 they might be able to barely limp by for four years if they had $100,000 and a Wal Mart Greeter job but they would barely make it... no fringes and hopefully no debt for them.
But once the money ran out then what? The only option would be to collect early social security with all the penalties that come with it.
41 percent of men and 46 percent of women retire at age 62 . Only 14.3 percent of men and 9.7 percent of women wait to collect their full check at age 66. Even fewer wait until they are 70.
That goes a long way towards explaining what appears to be extremely low benefits for the "average" retiree.
So the average retired worker receives $1,261 while a retired couple, both receiving benefits, receive but a combined benefit of $2,048.
I suppose $2,048 for a retired couple is adequate if the couple has $400,000 to $500,000 in retirement savings to draw upon but this is the case for the vast majority.
The average working household has virtually no retirement savings. When all households are included— not just households with retirement accounts—the median retirement account balance is $3,000 for all working-age households and $12,000 for near-retirement households.
How can an aged widow make it on $1,214 even if she does own her own home and doesn't have debt? And those are average benefits?
Thank you, Nicet4. The final link near the bottom of your post far exceeds the quality and sophistication of the average news article, as it is a 30-page academic study by a Ph.D.
Indeed, the thought of a widow existing on $1,214 a month is sobering. No room for any luxuries there, not even car ownership in many cases, I would think.
41 percent of men and 46 percent of women retire at age 62 . Only 14.3 percent of men and 9.7 percent of women wait to collect their full check at age 66. Even fewer wait until they are 70
That's simply incredible! I almost cannot believe it. Maybe I'm the stupid one to keep on working.
NICET4 quote"
The average working household has virtually no retirement savings. When all households are included— not just households with retirement accounts—the median retirement account balance is $3,000 for all working-age households and $12,000 for near-retirement households."
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is the savings crises worse than we think?
not sure , the data out there is very conflicting.
the 2010 census study shows far different numbers as far as net worth for our older population and keep in mind how much investments as well as homes have gone up since 2010.
a 65 year old shows a median net worth of 207k BACK IN 2010. that is a far cry from the pre retirement "savings " number that is supposed to be as low as 12k.
pre drop levels in 2007 for those 65 or older were a median 250k and today we may have exceeded those levels. i know we did.
the 55-64 age group had a whopping 266k net worth in 2007.
if they are looking at just savings numbers they can paint a very skewed number about the wealth of a group.
i can have 250k in savings today and pay cash for a house tomorrow and have zero savings. if i have 500k in savings and buy a 500k annuity i would have zero savings.
given how many billions in annuities were purchased by seniors and do not count as savings i would say savings numbers are very skewed.
same holds true for a life insurance cash value that a senior may be drawing from, it is not savings.
as mark tawain said there are lies,damn lies , and statistics.
it shows you depending on if you want to show how well baby boomers did or how poor it is all in how you mix the numbers and the criteria you select with.
this is the 2010 census results
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Last edited by mathjak107; 01-17-2014 at 03:58 AM..
This is a heartbreaking story for sure, I often worry about people in small towns so dependent on a single plant, this is the situation in so many places.
With that said $30/hour is well over $60,000 a year. That is way over the median income which is under $40,000 annually. So that means the average SS benefit for those workers will be higher than the figures posted in this thread. And not to sound cold but if you are in your late 50's living in a very low cost of living area such as the deep south and have not saved even 5100,000 for retirement while making $60,000/year well that's kind of on you.
The metric quoted is "near retirement" which is further clarified as "age 55-64", so the census data says $179K, not $207K. The disparity between $12K and $179K is probably accounted for by the fact that the former is "retirement account balances" while the latter is family net worth. Owning a home, with only a small amount left on the mortgage, if any, by itself, could account for a $167K difference in many places. Selling one's home raises cash, but leaves one with a new expense for housing, so generally isn't going to do as much as it may seem to help one make ends meet in retirement. Beyond that, non-retirement savings, such as for a child's education, count for net worth but not for retirement account balance.
But: Holy moley. Look at the difference between median and mean!!! That's incredible.
THAT 12K savings number does not include billions in annuity products seniors hold. it doesn't include collectables or insurance cash values, rental and investment properties ,home equity . in fact we don't really know what they did include
Financial sophistication varies by regions. Housing cost varies by regions as does overall COL. It is darn hard to compare apples and oranges. My current experiences would suggest that many of these folks don't have annuities or a lot more in investments. There tends to be in all the areas I have lived those who do and those who don't and the haves are often haves in most areas. Sorta like a venn diagram where those with investments are the same ones with annuities and the same ones with retirement plans etc etc. venn diagram - Bing Images
Sorta like pensions and the average non taxable investment account balances. There are those with large balances and those with little if any invested in non tax accounts. Those invested with large balances have plans, diversification, taxable accounts etc etc. Those with little balances may have one mutual fund and have tapped it early on. Yet put them together and you have both a mean and median.
MathJk: Absolutely correct. 1. Anyone with a bit of common sense knows nobody can count on working full time at a high paying job till 66. Disability, weakness, a closing factory, or just getting forced out of jobs is very common for all kinds of employed folks. The reason so many collect at 62 vs.66 is they need the money.
That being said, most folks this age also know, you don't put all your eggs in one basket. Many own their home and cars. They have stock investments, bonds, gold, annuities, etc. These studies pretty much useless. Besides, you'd be surprised at how well some folks live on that 1200 SS payment. Take advantage of a few govt. programs, work a little on the side, and you're in pretty good shape. Besides that, I've been shocked to see how little some folks do in retirement, and they're perfectly content and happy not to get up and go to work every day.
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