Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Most Americans unprepared for retirement
Old 04-28-2012, 08:34 AM   #1
Thinks s/he gets paid by the post
 
Join Date: Mar 2004
Posts: 1,988
Most Americans unprepared for retirement

From today's NYT article http://www.nytimes.com/2012/04/28/op....html?src=recg

"According to the Employee Benefit Research Institute, for instance, only 22 percent of workers 55 or older have more than $250,000 put away for retirement. Stunningly, 60 percent of workers in that same age bracket have less than $100,000 in a retirement account. Ghilarducci told me that the average savings for someone near retirement in America right now is $100,000."

omni
__________________

__________________
omni550 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 04-28-2012, 08:45 AM   #2
Recycles dryer sheets
 
Join Date: Aug 2010
Posts: 321
I'm shocked, shocked I tell you............
__________________

__________________
"Time wounds all heels...." - Groucho Marx
LRDave is offline   Reply With Quote
Old 04-28-2012, 08:47 AM   #3
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,412
A recent thread on the same study Boomer Retirement Market
__________________
MichaelB is offline   Reply With Quote
Old 04-28-2012, 08:54 AM   #4
Recycles dryer sheets
 
Join Date: Apr 2012
Location: Oswego
Posts: 76
What is interesting about the article is the belief that pensions are inherently better. I do not think this is true. Considering how many pensions get clobbered when the firm in question goes belly up. I dont have a pension at all, and Im very glad that I dont. I do not trust corporations to be there when I need them.

Steel
__________________
Steel Rain is offline   Reply With Quote
Old 04-28-2012, 09:46 AM   #5
Thinks s/he gets paid by the post
 
Join Date: Oct 2006
Posts: 3,812
This is an interesting stat from the EBRI study that I haven't seen before:

Quote:
Regardless of those retirement age expectations ... half of current retirees surveyed say they left the work force unexpectedly due to health problems, disability, or changes at their employer, such as downsizing or closure.
Here's the original:

Quote:
The RCS has consistently found that a large percentage of retirees
leave the work force earlier than planned (50 percent in 2012) (Figure 33). Many retirees who retired earlier than
planned cite negative reasons for leaving the work force, including
health problems or disability (51 percent);
changes at their company, such as downsizing or closure (21 percent); and
having to care for a spouse or another family member (19 percent).
Others say changes in the
skills required for their job (11 percent) or
other work-related reasons (23 percent) played a role.
Some retirees mention positive reasons for retiring early, such as being able to afford an
earlier retirement (33 percent) or wanting to do something else (28 percent), but just 8 percent offer only positive
reasons.
http://www.ebri.org/pdf/briefspdf/EB...No369_RCS2.pdf
__________________
Independent is offline   Reply With Quote
Old 04-28-2012, 10:09 AM   #6
Full time employment: Posting here.
Dog's Avatar
 
Join Date: Apr 2006
Posts: 781
Read the comments following the article. Interesting the blame being tossed around about a failed society, 401k being a failed experiment, etecetera. Only one person commented on the fact that the guy raided his 401k (STUPID) and the impact of the divorce. Add to that his failure to plan. Easier to blame everything else rather than take responsibility.
__________________
Dog is offline   Reply With Quote
Old 04-28-2012, 10:24 AM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Chuckanut's Avatar
 
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 6,318
The author admits have a "tech-laden" portfolio. He seems an intelligent fellow. Had he never heard of diversification? This seems like a self inflicted wound to me.

And taking money out of his 401K to fix up a house he bought knowing it needed work? Another self-infliced wound.

As for the divorce, that may or may not be his fault. In most states your spouse can divorce you for no reason whatsover and there is nothing you can do about it. There is a 50% chance he had no choice in the matter.
__________________
The worst decisions are usually made in times of anger and impatience.
Chuckanut is online now   Reply With Quote
Old 04-28-2012, 10:58 AM   #8
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,412
The EBRI study is quite interesting. After reading it my conclusions are different. Note - it is sponsored by companies that provide financial products and services.

The study is done annually. A comparison with recent years shows that attitudes and expectations are improving. They fell dramatically as a result of the recession and are not yet back to pre-'08 levels , but they definitely are improving.
__________________
MichaelB is offline   Reply With Quote
Old 04-28-2012, 11:06 AM   #9
Thinks s/he gets paid by the post
photoguy's Avatar
 
Join Date: Jun 2010
Posts: 2,301
Is retiring on mostly SS so bad? I'm not sure what the average payout would be for a couple but if it is $2 - $3k per month that's seems like quite a bit. I'm sure many on this board have lower expenses than that.
__________________
photoguy is offline   Reply With Quote
Old 04-28-2012, 11:18 AM   #10
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,827
Quote:
Originally Posted by photoguy View Post
Is retiring on mostly SS so bad? I'm not sure what the average payout would be for a couple but if it is $2 - $3k per month that's seems like quite a bit. I'm sure many on this board have lower expenses than that.
The average monthly SS retirement check in March, 2012 was $1232.

Monthly Statistical Snapshot, March 2012
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is offline   Reply With Quote
Old 04-28-2012, 11:38 AM   #11
Thinks s/he gets paid by the post
DFW_M5's Avatar
 
Join Date: Sep 2003
Posts: 4,980
I am pretty skeptical of some of the stats thrown out the past few years about how few $s folks have saved for retirement. Where is this data coming from (survey, investment firms, ??). I suspect the picture is a bit better than made out to be.
__________________
DFW_M5 is offline   Reply With Quote
Old 04-28-2012, 12:07 PM   #12
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,612
Quote:
Originally Posted by DFW_M5 View Post
I am pretty skeptical of some of the stats thrown out the past few years about how few $s folks have saved for retirement. Where is this data coming from (survey, investment firms, ??). I suspect the picture is a bit better than made out to be.
Not to mention that they don't really take whether or not you have a DB pension into account. A 60-year-old with only $100K in retirement savings with a $50K annual pension is a far cry from a 60-year-old with $100K and no pension at all.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Old 04-28-2012, 12:13 PM   #13
Thinks s/he gets paid by the post
powerplay's Avatar
 
Join Date: Oct 2008
Posts: 1,380
Quote:
Originally Posted by ziggy29 View Post
Not to mention that they don't really take whether or not you have a DB pension into account. A 60-year-old with only $100K in retirement savings with a $50K annual pension is a far cry from a 60-year-old with $100K and no pension at all.
Very true, I think the article tries to focus on 'the sky is falling' to get people excited about the issue. The person with a fairly secure pension and especially one with a COLA is in a far better position with the smaller savings.
__________________
powerplay is offline   Reply With Quote
Old 04-28-2012, 12:38 PM   #14
Full time employment: Posting here.
Silver's Avatar
 
Join Date: Sep 2010
Location: Orlando, Fl
Posts: 580
These articles seem to assume that the only retirement savings people have are in work-related retirement accounts such as 401K's. I always invested enough to get the company match, but because there were other options that offered better return on investment I had less then half of my total retirement savings in my companies' 403b. Assuming that the only retirement monies available are in a company sponsored plan seems short-sighted, and just an easy statistic to obtain.
__________________
Silver is offline   Reply With Quote
Old 04-28-2012, 12:42 PM   #15
Thinks s/he gets paid by the post
nun's Avatar
 
Join Date: Feb 2006
Posts: 4,835
Quote:
Originally Posted by Steel Rain
What is interesting about the article is the belief that pensions are inherently better. I do not think this is true. Considering how many pensions get clobbered when the firm in question goes belly up. I dont have a pension at all, and Im very glad that I dont. I do not trust corporations to be there when I need them.

Steel
Many on this forum will agree with you. I also like 401k, 403b etc because I have enough in them to easily fund my retirement. I earn far more than I spend and I'm single and don't have children so I can save lots and the flexibility of the a DC plan will let me ER. However, many 401k participants are disappointed with them. They might not have contributed enough and/or they invested recklessly so that their balances are low. So for them the 401k has not been a success. Also the shift of retirement saving from DB employer funded pensions to DC plans, where the employee pays most of the contributions, without a proportional increase in employee salaries is one of the main reasons the middle class have seen their debt load increase and their retirement assets decrease. They have only been able to keep their standard of living by taking on debt.

Of course you can cry "caveat emptor", but that doesn't solve the problem of providing for retirement income. If the numbers in the article are correct the last 30 years of retirement funding have been a stunning failure. It might be interesting to look at what the UK is doing in the DC retirement field . The UK Government has just introduced the National Employment Savings Trust, NEST. This is a mandatory DC plan. If an employer doesn't offer a DB plan or a DC plan that is at least as good as NEST then the employee is automatically enrolled in NEST. There are mandatory employee AND employer contributions. If the employee does not want to participate they can opt out.

Also the UK has recently changed its state pension benefits and removed the dependence of the amount of the pension on your salary history. Instead it's just calculated on how long you've worked and the pension has been set so that most people will see an increase in their pension. Thus the low paid get a big pension increase and those that make the most will see a reduction in their state pension. These reforms have been brought in by a Conservative Government.
__________________
“So we beat on, boats against the current, borne back ceaselessly into the past.”

Current AA: 65% Equity Funds / 20% Bonds / 7% Stable Value /3% Cash / 5% TIAA Traditional
Retired Mar 2014 at age 52, target WR: 0.0%,
Income from pension and rent
nun is offline   Reply With Quote
Old 04-28-2012, 12:58 PM   #16
Thinks s/he gets paid by the post
73ss454's Avatar
 
Join Date: Oct 2004
Location: LaLa Land
Posts: 4,378
Quote:
Originally Posted by photoguy View Post
Is retiring on mostly SS so bad? I'm not sure what the average payout would be for a couple but if it is $2 - $3k per month that's seems like quite a bit. I'm sure many on this board have lower expenses than that.
I'm not one of them. We seem to be spending about 6K+ a month. If we both take SS in Dec of this year when DW turns 62, I should get about 2050 and DW about 850 or a little less. I'll be 63 and 8 months at that point. So we still have to come up with 3K or so a month to live the way we want.

The whole thing comes down to how much you want to spend and DW is good at it.
__________________
Work is something you do to get enough $ so you don't have to....Me.
73ss454 is offline   Reply With Quote
Old 04-28-2012, 01:19 PM   #17
Recycles dryer sheets
 
Join Date: Sep 2008
Posts: 353
"companies that provide financial products and services"
That's a big part of it. No matter how much you have someone is just waiting to tell you its not enough. And to allow them to handle your entire retirement for you.
BTW, do they mention how much a person needs? Or throw out the old plan to live to 110! people are living longer these days...... LOL LOL

Added
Maybe folks were not paying attention when most megacorps cut pensions in half or all together in the late 90's? Fewer and fewer folks will be talking pensions on this forum going forward. At least not as a major part of their retirement portfolio. Aside from Gov. workers, most seem to take the lump sum for long term safety anyway.
__________________
almost there is offline   Reply With Quote
Old 04-28-2012, 01:36 PM   #18
Thinks s/he gets paid by the post
 
Join Date: Oct 2006
Posts: 3,812
Quote:
Originally Posted by DFW_M5 View Post
I am pretty skeptical of some of the stats thrown out the past few years about how few $s folks have saved for retirement. Where is this data coming from (survey, investment firms, ??). I suspect the picture is a bit better than made out to be.
Quote:
Originally Posted by ziggy29 View Post
Not to mention that they don't really take whether or not you have a DB pension into account. A 60-year-old with only $100K in retirement savings with a $50K annual pension is a far cry from a 60-year-old with $100K and no pension at all.
Quote:
Originally Posted by powerplay View Post
Very true, I think the article tries to focus on 'the sky is falling' to get people excited about the issue. The person with a fairly secure pension and especially one with a COLA is in a far better position with the smaller savings.
Yes to all.

It seems obvious that the EBRI or some similar group could interview people turning 62 and get a better picture of finances.

What is your:
SS benefit at at 66?
Total of stocks, bonds, CDs, etc?
Pension (COLA and non-COLA separately)?
House, equity, mortgage balance, payment?

(Note that if you've got the SS benefit at 66, then you also know the average of the top 35 years of income.)

I'd like to see the detail for 100 or so US families. I'm sure that some are in bad shape, but I'd like to see the distribution.

Maybe somebody here has a source.
__________________
Independent is offline   Reply With Quote
Old 04-28-2012, 02:01 PM   #19
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 8,616
OK, most are unprepared for retirement, yet folks still keep retiring somehow just like they always have. How is that possible? (That's a rhetorical question, but fill free to answer.)
__________________
LOL! is offline   Reply With Quote
Old 04-28-2012, 02:18 PM   #20
Thinks s/he gets paid by the post
Koolau's Avatar
 
Join Date: Jul 2008
Location: Leeward Oahu
Posts: 3,240
Quote:
Originally Posted by Steel Rain View Post
What is interesting about the article is the belief that pensions are inherently better. I do not think this is true. Considering how many pensions get clobbered when the firm in question goes belly up. I dont have a pension at all, and Im very glad that I dont. I do not trust corporations to be there when I need them.

Steel
Steel, I don't disagree about the various negative issues with pensions, but typically, in the USA at least, they are covered (to some extent) by the Pension Benefit Guarantee corp. Welcome to PBGC Admittedly, the PBGC doesn't keep a corp. from freezing pensions and either providing a DC type plan (or not providing a replacement plan). So, you are correct that one should never totally depend upon a pension for all of one's retirement. Having said that, one can have at least some confidence in them if provided. Having the choice of a pension or not, I'd go with having a pension (and I do, thank God and Megacorp.) YMMV
__________________

__________________
Ko'olau's Law -

Anything which can be used can be misused. Anything which can be misused will be.
Koolau 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


 

 
All times are GMT -6. The time now is 01:12 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.