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AARP Statistics on Saving
Old 06-05-2007, 11:04 AM   #1
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AARP Statistics on Saving

According to the latest AARP newsletter, "55+ savers have not saved much":

less than 10,000 26%
10,000 to $24,999 5%
25,000 to $49,999 9%
50,000 to $99,999 11%
100,000 to $249,000 20%
$250,000 or more 28%

So, while it's encouraging that the highest percentage is those that saved $250,000 or more, an almost equal amount have saved $10,000 or less!
72% have saved less than $250,000. This doesn't seem possible to me, but I guess it's the truth (based on a January '07 Employee Benefit Research Institute survey. And while I don't mean to denigrate anyone because everyone has their own circumstances, I tend to think that much of this is due to unnecessary/discretionary spending, either below or exactly at own's means. As a fairly low wage earner myself (DH and I never earned more than $50,000 each, and many years much less),
I was still able to save a bundle.

And the percentage of US households saving and investing for retirement has dropped from 78% in 2000 to 66% in 2007.

They say that more than 75 million workers will join one out of three beneficiaries depending on a SS monthly payment for 90% or more of their income and one out of five relying on it entirely.

This is scary stuff for many Americans...
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Old 06-05-2007, 11:51 AM   #2
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It is indeed disheartening to see those numbers. My brother who just turned 55 has something like $100,000 in his 401-k plan and only has that much because my 85-year old father continues to bail him out of financial emergencies every two or three years. Both he and his wife work but they are more concerned with impressing their neighbors than they are with saving for the future. I suspect that my father has coughed up over $50,000 in the last decade...largely explaining how my brother has managed to save even what he's saved.

Of course, it depresses him to think that he will still be working when he's 70 years old, and his wife resents the fact that my wife and me are retired already (it REALLY bugs her). But neither are willing to do what it takes to achieve it for themselves.
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Old 06-05-2007, 01:48 PM   #3
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My MIL passed away with an estate of less than $5K (and $5K in funeral expenses). The only reason she had money in her account was that she stayed with us the last 18 months of her life and we paid for everything but her meds.

The amazing thing is that at least one SIL wanted to fight over the money.
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Old 06-05-2007, 02:45 PM   #4
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Some people continue to live paycheck to paycheck and plan on working well into their 70's.

Which would be a step up from some folks I know who are neck deep in debt, no savings, and are well into their 60's.
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Old 06-05-2007, 05:43 PM   #5
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My ex "one of the all time great spendthrifts" just turned 50. Her new husband is 63 and she just cashed in his 401k to pay off her HEL. She traded in her 5 year old car (5 mile commute to work) for a new leased Acura with a 10k annual mileage cut off. Now she is redoing her kitchen hard wood floors, new cabinets, appliances, granite countertop etc.. Of course it is going back on the HEL. When she took over the house from our divorce it had $146k owing on it. Now with all the loans she is over 350k.
No retirement for her.
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Old 06-05-2007, 05:52 PM   #6
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Maybe this is reflective of the fact that AARP always seems to be so actively involved with each SS debate. If I had saved/invested less than $250,000 I would probably be a big AARP fan also. As it is, I'm not.
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Old 06-05-2007, 06:11 PM   #7
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Originally Posted by crispus View Post
My ex "one of the all time great spendthrifts" just turned 50. Her new husband is 63 and she just cashed in his 401k to pay off her HEL. She traded in her 5 year old car (5 mile commute to work) for a new leased Acura with a 10k annual mileage cut off. Now she is redoing her kitchen hard wood floors, new cabinets, appliances, granite countertop etc.. Of course it is going back on the HEL. When she took over the house from our divorce it had $146k owing on it. Now with all the loans she is over 350k.
No retirement for her.
hmmmm seems like you got out before you got dug into a bigger and bigger hole. Congrats.

We need more people like her to get the US economy kick started again.
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Old 06-05-2007, 06:44 PM   #8
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Originally Posted by cute fuzzy bunny View Post
Some people continue to live paycheck to paycheck and plan on working well into their 70's.

Which would be a step up from some folks I know who are neck deep in debt, no savings, and are well into their 60's.
That fits almost all of the guys I used to w*rk with. They don't have a pot to pee in, or a window to throw it out.....but they have big screen plasma TV's and all the other expensive toys.....and the CC debt and HEL to go along with them!!

Paycheck to paycheck, and estimated retirement date in their late 60's to early 70's! Suckers!
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Old 06-05-2007, 06:55 PM   #9
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I always wonder what they mean by savings.

Maybe they they are subtracting out the 401K, Roth, and other retirement account balances when computing the person's savings (?).

A lot of people are pouring every cent possible into retirement accounts, which sometimes means putting very little elsewhere.

Also, some of these people are very elderly and may have spent most of their nestegg.

I'm not congratulating myself for doing better than most, quite yet. OK, maybe now. My social security should be about 35% of my retirement income, not 90%.
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Old 06-05-2007, 09:28 PM   #10
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Tangomonster,

This is very much possible. Where do I begin:

lottery tickets, booze, cigarettes, electronics, new cars every few years, frequent trips to the mall, really nice vacations

I have known people who spend more on a cruise than the entire cost. They subsidize everyone else's vacation. If you look around you and everyone seems rich, the vast majority are not. They are merely spending much, if not more, than what they have.

Credit card interest alone could kill them.
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Old 06-05-2007, 09:30 PM   #11
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According to the latest AARP newsletter, "55+ savers have not saved much":
Savings are less important to people who have pensions. Some even have cola'ed pensions (almost exclusively government or municipal employees). Savings are nice to have but not necessary to a successful retirement depending on your other sources of income. Add SS to a nice fat pension and you are doing as well as someone with a million or more.
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Old 06-06-2007, 09:41 AM   #12
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I think necessity will rule most people. Many current inhabitants of mobile home parks in the south moved there because it made their retirement work financially. Down there, their new neighbor Joneses do not impose the same costs of keeping up. People are amazing at how they can adapt to changing situations. If they choose to work longer, it is because they are enjoying that lifestyle.

My cousin (much older) worked all his life as a salesman with no pension or savings. He loved his life. When he died at 74, 650 people showed up for the funeral! A bit of life insurance (plus SS) helped his widow live a frugal life until she died 8 years later.
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