Another retirement horror story

[nun]

Here's an article that basically says that 50% of the population is going to run out of money in retirement. Kind of old news given the level of saving and debt in the US. There is just a major disconnect with retirement and personal finances, we've done away with DB plans and expect a family to save $1M to retire while most have significant debt. Factor in that many people have lost equity in their homes and dont even have the option to downsize to access some of the equity.

Many Americans will run short in retirement: study - Yahoo! Finance=

 

[Purron]

It is sad. Sad for the people who won't have enough money and sad for those of us who will have to support them.

 

[Westernskies]

It is sad. Sad for the people who won't have enough money and sad for those of us who will have to support them.

Aren't you just the bluebird of happiness?

 

[LOL!]

Those are the same 50% of the retired population that ran out of money 10, 20, 30, 40, ... years ago. They always existed. They will always exist.

 

[traineeinvestor]

The more stories I read like this, the more I favour the Australian model with its comparatively high level of mandatory contributions by employer and employee and its flexibility.

 

[Sparky]

What about those of us who did the best they could and HAD $1M and now don't. Those of us who are screwed are just waiting around to not be.

 

[Pete]

The game just wouldn't be as fun or interesting if victory was guaranteed.

 

[Walt34]

I see this happening for a lot of relatives. One airhead SIL says "Oh, we'll have DH's National Guard pension".

Yeah, right. That might buy groceries if they live off rice and beans with a little Alpo thrown in for flavoring.

This is the same one who has bought three new cars in the last five years.

This is one of the reasons I feel soooo lucky I picked the career that I did, with an employer that is one of the few with zero unfunded pension liability.

 

[NW-Bound]

I have had engineer friends making $150K whose wives expect to maintain the same lifestyle on SS.

 

[Major Tom]

This Yahoo Finance article could almost be an Onion article. It is stating the obvious. Many people do find a way to manage though. One of my co-workers in the last job I worked at retired from a modestly paid retail job recently at the age of 62. He had worked the majority of his life in modestly paid jobs and was now existing on SS alone.

I saw him a couple of times in the year or so after he retired and although he said that money was tight, he was very happy because he had all the time in the world to do what he wanted. He had started creating pieces of art again.
He was the same guy, just a little more relaxed and happy looking.

So how did he survive on what must have been a fairly low SS check? He was living in a room with the same room-mates he'd shared with for years in a city with rent control. He had a long-term partner, so they were probably sharing the rent on that one room between them. He was as happy as a bug in a rug.

I'm a little envious of those who are good at sharing living spaces. If I were that good, I could fully retire today.

 

[Independent]

I'm not sure that this is just a future issue.

In 2007, ... Social Security was the major source of income (providing at least 50% of total income) for 53% of aged beneficiary couples and 73% of aged nonmarried beneficiaries. It was 90% or more of income for 21% of aged beneficiary couples and 44% of aged nonmarried beneficiaries. Total income excludes withdrawals from savings and nonannuitized IRAs or 401(k) plans; it also excludes in-kind support, such as food stamps and housing and energy assistance.

The "excludes 401k" sounds like a big deal, but remember the people over 65 in 2007 were more likely to have DB pensions than 401k during their working lives.

Skimming the paper here http://www.ebri.org/pdf/briefspdf/EBRI_IB_07-2010_No344_RRR-RSPM.pdf it looks like they are doing a lot more than a simplistic "everyone should have $1 million", but I still wonder about their assumptions. It does not appear that they actually sit down with people and look at their entire family and financial situations. IIRC, there are some researchers at the Un of Wisconsin who did a pretty careful look and came up with a more optimistic result.