Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Most Americans Can't Retire...
Old 03-13-2015, 10:37 AM   #1
Recycles dryer sheets
 
Join Date: Aug 2012
Posts: 138
Most Americans Can't Retire...

I know there are threads about this and it has been discussed a lot. But in looking at this latest report, well, I guess I never really absorbed how bad it is going to be for a lot of our fellow Americans.

45% of all working households have no retirement plans at all and half of those are headed by someone 45 to 65 years old! That is a hard situation to fix.

From the report:

"Account ownership rates are closely correlated with income and wealth. Nearly 40 million working-age households (45 percent) do not own any retirement account assets, whether in an employer-sponsored 401(k) type plan or an IRA. Half of these households with no retirement savings are headed by someone between age 45 and 65, and may have too few year to catch up.

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 $2,500 for all working-age households and $14,500 for near-retirement households. Furthermore, 62 percent of working households age 55-64 have retirement savings less than one times their annual income, which is far below what they will need to maintain their standard of living in retirement."

Link to report: http://www.nirsonline.org/storage/ni...l_rsc_2015.pdf

I know that many on here will say that it is their own fault for not saving for retirement. But I have to agree with this report that public policy must change to make it easier for Americans to save.

Given that half of workers that could contribute to a retirement plan DON"T contribute, I wonder if we have to go to something mandatory - like SS contributions. I don't have all the answers, but this is so sad.
__________________

__________________
Live Free is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 03-13-2015, 10:45 AM   #2
Thinks s/he gets paid by the post
ExFlyBoy5's Avatar
 
Join Date: May 2013
Posts: 1,977
I won't read the report because they will glean numbers that will support their hypothesis.


It's pretty tough to go out and NOT spend money when there is NOTHING but a constant barrage of advertisements telling you to GO BUY THIS NOW!!! KEEP UP WITH THE JONES'!!!" It starts younger and younger and never stops. When the message is always to SPEND, SPEND, SPEND...then there will be no savings. We are seeing that now.


As far as mandatory contributions, well, that's what SS is for. [mod edit]
__________________

__________________
Founder and Head Lounger @ The Life of Leisure Institute
Retired in 2014 at the Ripe Age of 40.
ExFlyBoy5 is offline   Reply With Quote
Old 03-13-2015, 01:22 PM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2013
Posts: 5,328
Delayed gratification as the most important factor for success? Here is a reboot of the marshmallow experiment. Two out of three always eat the marshmallow.



Advertisers understand how to exploit this.
__________________
Even clouds seem bright and breezy, 'Cause the livin' is free and easy, See the rat race in a new way, Like you're wakin' up to a new day (Dr. Tarr and Professor Fether lyrics, Alan Parsons Project, based on an EA Poe story)
daylatedollarshort is offline   Reply With Quote
Old 03-13-2015, 01:28 PM   #4
Full time employment: Posting here.
Dog's Avatar
 
Join Date: Apr 2006
Posts: 782
Major lifestyle creep.


Sent from my iPhone using Early Retirement Forum
__________________
"Tell me, what is it you plan to do with your one wild and precious life?" - Mary Oliver
Dog is offline   Reply With Quote
Old 03-13-2015, 01:42 PM   #5
Thinks s/he gets paid by the post
2B's Avatar
 
Join Date: Mar 2006
Location: Houston
Posts: 4,330
When I was growing up, my parents raised 5 kids in a nominal 1500 ft2 house with 1 1/2 bathrooms and 3 bedrooms. Now if you put 2 kids in the same room, it's almost considered child abuse.

Culturally, we've raised everyone's expectations; but even with both parents working, there is always "more" needed.
__________________
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
2B is offline   Reply With Quote
Old 03-13-2015, 02:51 PM   #6
Thinks s/he gets paid by the post
timo2's Avatar
 
Join Date: Jul 2011
Location: Rio Rancho
Posts: 1,438
Everyone will get to the point where they can no longer work, ready or not.
__________________
"We live the lives we lead because of the thoughts we think" Michael O’Neill
timo2 is offline   Reply With Quote
Old 03-13-2015, 03:06 PM   #7
Thinks s/he gets paid by the post
Lakewood90712's Avatar
 
Join Date: Jul 2005
Posts: 1,316
Quote:
Originally Posted by timo2 View Post
Everyone will get to the point where they can no longer work, ready or not.
My dad would have worked full time till death , if he was still able. Some chose to as a purpose for life , Grandfather was of the same mindset.
__________________
“The finance industry is 5% rational people and 95% shamans and faith healers.” - Charlie Munger
Lakewood90712 is offline   Reply With Quote
Old 03-13-2015, 03:53 PM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,487
Quote:
Originally Posted by Live Free View Post
.....Given that half of workers that could contribute to a retirement plan DON"T contribute, I wonder if we have to go to something mandatory - like SS contributions. ....
If you are suggesting this, perhaps you need to revisit your screen name.

I struggle with this as well, but IMO if we value freedom then we need to allow people to screw up their lives if they decide to do so. At least they will have SS as a safety net.

I think/hope that subsequent generations will see how ill prepared many are for retirement and will start saving.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is online now   Reply With Quote
Old 03-13-2015, 04:00 PM   #9
Moderator
Walt34's Avatar
 
Join Date: Dec 2007
Location: Eastern WV Panhandle
Posts: 16,579
Quote:
Originally Posted by Live Free View Post
I know there are threads about this and it has been discussed a lot. But in looking at this latest report, well, I guess I never really absorbed how bad it is going to be for a lot of our fellow Americans.
While I have little doubt that many will have to take a serious hit on their standard of living I wonder how many will be really living under bridges given all the other social services available. Besides, there are only so many bridges available.

And "retirement" as we understand it now is a historical aberration except for the truly very wealthy so I expect to see more of what was done in the past - multiple generations under one roof, the return of a "use it up, wear it out, or do without" lifestyle, a lot more home cooking and veggie gardens and not because they want to, and the like. Not a return to the 1930's Depression lifestyle but one taking a lot of the lessons learned during that time.

One SIL and BIL are having to deal with going from a 200+k/year income to ~$60k/year income in retirement. They are not adjusting well and did not plan well, but they'll hardly starve.

And it is possible to live on SS. Not comfortably, but possible. Obviously if one lives in San Fransisco when that happens a move is quickly approaching.
__________________
I heard the call to do nothing. So I answered it.
Walt34 is offline   Reply With Quote
Old 03-13-2015, 04:21 PM   #10
Thinks s/he gets paid by the post
mpeirce's Avatar
 
Join Date: Feb 2012
Location: Columbus area
Posts: 1,597
National Institute on Retirement Security - Wikipedia, the free encyclopedia
"NIRS seeks to "contribute to informed policy making in the area of retirement security by fostering a deep understanding of the value of traditional pension systems to employees..."

"Long-standing members include the AARP/NRTA and a number of the country’s largest state and local public employee pension plans."
Just so you know who financed the study - the folks who want to kill off 401(k)s and any alternative to traditional pensions...
__________________
mpeirce is offline   Reply With Quote
Old 03-13-2015, 04:26 PM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2005
Posts: 5,414
americans are retiring and have been . that is bull. everyone finds a way to make do with what they have.

__________________
mathjak107 is offline   Reply With Quote
Old 03-13-2015, 04:27 PM   #12
Recycles dryer sheets
Earl E Retyre's Avatar
 
Join Date: Jan 2010
Posts: 260
I believe part of the answer (as a long term/future solution) is that schools should teach children about finances including and stressing the value of LBYM starting at a young age. I am not a teacher and know little about the school systems, so maybe this is a naïve concept. But I do not understand why there are not fun programs that focus on this throughout a child's education (elementary through high school).
__________________
Earl E Retyre is offline   Reply With Quote
Old 03-13-2015, 04:29 PM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,487
Agree. Here is a place to start. Feed the Pig
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is online now   Reply With Quote
Old 03-13-2015, 04:52 PM   #14
Thinks s/he gets paid by the post
 
Join Date: May 2014
Posts: 3,008
Years ago a local newspaper financial columnist was asked by a reader why he kept featuring people who retired with $500K, $1 million and more, and didn't write instead about those like him who were "blessed to have $50,000 or $100,000 for retirement". His response to the reader: "Keep working".


I think people figure SS will cover everything and they'll take a little out of savings every year and when reality hits (needing to replace the car, hearing aids not covered by Medicare, high prescription co-pays) that's when they realize they needed more savings. One of my HS classmates, a retired nurse, posted a reference to "our meager savings" on FB and I wanted to ask her why she didn't go back to work. (She would have been 61 when she posted that.) Then she posts asking questions about how her ihone works and what kind of case to get for her new iPad. Sigh.
__________________
athena53 is offline   Reply With Quote
Old 03-14-2015, 06:57 AM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
donheff's Avatar
 
Join Date: Feb 2006
Location: Washington, DC
Posts: 8,650
I'm with Walt on this one. As Mathjack's chart shows people continue to retire at about 62 despite the downturn and the lack of savings. They either burn out, can't find work, or have physical problems limiting work. They find a way to get by. It is true that there are many fewer retirees now who can maintain their pre-retirement living style due to the decline in defined benefit pensions but that just dumps them into the dire circumstances that significant portions of the population have always been in. It does seem to me that this situation is a good reason to maintain social security at its present or higher levels so the increasing numbers of the unprepared can have at least a marginal floor.
__________________
Every man is, or hopes to be, an Idler. -- Samuel Johnson
donheff is online now   Reply With Quote
Old 03-14-2015, 07:03 AM   #16
Thinks s/he gets paid by the post
 
Join Date: Feb 2014
Posts: 1,475
Quote:
Originally Posted by Earl E Retyre View Post
I believe part of the answer (as a long term/future solution) is that schools should teach children about finances including and stressing the value of LBYM starting at a young age. I am not a teacher and know little about the school systems, so maybe this is a naïve concept. But I do not understand why there are not fun programs that focus on this throughout a child's education (elementary through high school).

An often discussed topic between me and my son. School teachers don't know much about this topic either and are not educated to do this. But just showing LBYM and the power of compounding would be helpful. Interest rates have been low for such a long time it's hard to talk about them in a meaningful way.


Sent from my iPhone using Early Retirement Forum
__________________
EastWest Gal is offline   Reply With Quote
Old 03-14-2015, 07:30 AM   #17
Recycles dryer sheets
Mo Money's Avatar
 
Join Date: Mar 2014
Location: .
Posts: 269
I'm with Earl, pb4 and EWG on this one. While PF habits should be taught at an early age, the emphasis should be particularly at the HS and college level. In my day, we were taught how to cook (home ec), build stuff (shop) and in college I had to prove I could swim (or be forced to take a swimming class). Why on earth were we all not taught to cook up a savings plan, build a future, and keep our financial heads above water?
__________________
“We always may be what we might have been.” -- Adelaide Anne Procter
Mo Money is offline   Reply With Quote
Old 03-14-2015, 07:43 AM   #18
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 16,537
I know the US society is a very consumerist society.

But I never had any trouble ignoring the ads.

You'd think most folks would become inured to them.
__________________
Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
audreyh1 is online now   Reply With Quote
Old 03-14-2015, 07:47 AM   #19
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 16,537
Quote:
Originally Posted by mathjak107 View Post
americans are retiring and have been . that is bull. everyone finds a way to make do with what they have.

The top line is not surprising as it sort of corresponds to the expected Social Security FRA for workers which has gone up a year.

People born in 1937 (would have been 65 in 2002) reached FRA in 2002, and qualified for 80% of benefits when they reached 62.

By 2009, everyone under 66 (born in 1943 or later) had a SS FRA of 66 and didn't reach 80% of benefits until 63. I expect by then many folks were aware that 66 was the SS full retirement age, not 65.

But it is notable that fewer expected to take SS benefits early. And apparently there has been a drop in people taking benefits at age 62. Of course the benefit itself has dropped to 75% from 80% of FRA benefits.

The bottom line is a bit surprising. It's trending up recently, yet well after the 2008 financial crisis.
__________________
Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
audreyh1 is online now   Reply With Quote
Old 03-14-2015, 08:00 AM   #20
Recycles dryer sheets
GreenER's Avatar
 
Join Date: Nov 2014
Location: Pastures
Posts: 135
It is truly amazing in our culture that finance is such a taboo subject. You would think it would be a core skill. Even having been raised by financially savvy, serious LBYM, super savers there was no talk about the mechanics of finances in our household growing up.. The one thing they did have us do as kids was to put 10% of all gift money or earnings into a college/big venture fund. They did plenty of modeling of LBYM but it seemed more instinctual (depression fostered) and environmentally driven than done for financial reasons. They are in their mid eighties now and bought their downsized house with cash before selling their previous house. I know they are very comfortably set and are still saving. But to this day they don't talk about it other than to disparage spendthrifts. I guess they still rubbed off on us, as all four of us LBYM and 3 out of four are super savers and will retire in our fifties with well above average networth. The fourth one will be working as long as possible and will likely be the recipient of the majority of my parent's estate. But even she is a saver and is very frugal she has just been marginally employed her whole life and has had several periods of unemployment. Even she will get by okay once she hits social security as she is used to getting by on very little and she still has a pretty decent lifestyle.
__________________

__________________
"One's destination is never a place, but a new way of seeing things" Henry Miller
GreenER is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
10 things most Americans don't know about America BigNick Other topics 71 07-29-2013 11:55 PM
Most Americans unprepared for retirement omni550 FIRE and Money 62 05-02-2012 10:43 AM
Most Americans In the Dark About Their Pensions mickeyd FIRE and Money 55 08-02-2011 07:52 PM
Most Americans are unprepared for retirement JustCurious FIRE and Money 10 04-12-2008 05:51 PM
Chinese Factory Worker Can't Believe the **** He Makes For Americans NYC Guy Other topics 10 06-19-2005 01:11 PM

 

 
All times are GMT -6. The time now is 07:12 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.