Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Question for someone smarter than I
Old 07-18-2006, 11:14 AM   #1
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
mickeyd's Avatar
 
Join Date: Apr 2004
Location: South Texas~29N/98W
Posts: 5,884
Question for someone smarter than I

Occasionally I run across an article that indicates that we Americans (generally baby boomers) are not saviing enough $$ for retirement. I don't recall the exact details but as I recall the article may state that the average American (or boomer) has $49,450 saved up for retirement.

Then I run across an article like this which makes me scratch my head.




Retirement assets hit $14.5 trillion

By Kathie O'Donnell
July 17, 2006
The nation's retirement assets reached a record $14.5 trillion in 2005, marking a 7% increase over the prior year and a 40% jump since 2002, according to research published today by the Investment Company Institute.

Retirement assets now account for more than one-third of household financial assets, up from about 23% in 1985, ICI, the mutual fund industry's national trade association, said.


"Clearly, Americans are focused on saving for retirement as a top priority," said ICI senior economist Sarah Holden, who co-authored the study with ICI senior economist Peter Brady, in a statement.

"Our research continues to indicate that individuals are building retirement nest eggs by using employer-sponsored plans and IRAs."

The move toward individual control of retirement assets continued, ICI said.

The majority of retirement savings, 51%, is now invested in defined-contribution plans and individual retirement accounts, in which investors make the investment choices.

During the past two decades, defined contribution plans and IRAs have grown faster than other retirement accounts.

In 2005, defined contribution and IRA assets grew nearly 9% while other retirement vehicles grew less than 5%, Washington, D.C.-based ICI said.

Mutual funds remained important vehicles for retirement assets, representing about $3.4 trillion of the total.

Mutual funds' share of the retirement market continued to increase given their prevalence in rapidly-growing defined contribution plans and IRAs.

Funds now manage 48% of assets in defined contribution plans and 45% of IRA assets, ICI said.


http://www.investmentnews.com/news.cms?newsId=1544~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

$14,500,000,000,000 is a bunch of savings. I am confused.* If few folks are saving for retirement, who the heck is stashing away all of these zeros?
__________________

__________________
Part-Owner of Texas

Outside of a dog, a book is man's best friend. Inside of a dog, it's too dark to read. Groucho Marx

In dire need of: faster horses, younger woman, older whiskey, more money.
mickeyd is online now   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!

Re: Question for someone smarter than I
Old 07-18-2006, 11:26 AM   #2
Dryer sheet aficionado
 
Join Date: Nov 2005
Posts: 38
Re: Question for someone smarter than I

Two things come to mind. First, most of those zeros belong to the very rich. Second, I wouldn't be surprised if most of the remaining increase is due to the housing bubble. IMHO boomers are still ill-prepared for retirement.
__________________

__________________
GMueller is offline   Reply With Quote
Re: Question for someone smarter than I
Old 07-18-2006, 11:29 AM   #3
Thinks s/he gets paid by the post
 
Join Date: Aug 2005
Posts: 2,056
Re: Question for someone smarter than I

Interestingly, if you take $14.5 Trillion and divide by 290 million people, which is about the population of the USA, you get $50,000 per person. So in simple terms, there's $50K in retirement per person in this country. However, then you have to take into account that many of those are children, teens, and young adults, who would most likely have nothing saved. Not to mention countless others in their 20's, 30's, 40's, etc who have nothing saved. But then at the other end you have Bill Gates, Warren Buffet, etc. And then everyone in between.

I'd imagine that, in general, that while retirement assets are hitting new records, it's mainly because of a very small percentage at the head of the pack amassing all these assets. As for the rest of the masses, most of them are probably no better off than in previous years, or in some cases, worse.

At least, that's my guess on it. But I don't know if I'm smarter than you or not? :P
__________________
Andre1969 is online now   Reply With Quote
Re: Question for someone smarter than I
Old 07-18-2006, 11:31 AM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
TromboneAl's Avatar
 
Join Date: Jun 2006
Posts: 11,202
Re: Question for someone smarter than I

Thinking out loud here...

$14.5 trillion / 100 million households = $145,000 per household -- did I get all the zeros right??

Then subtract the amount in pensions, and the figure isn't so far off from the $49,450 figure. *Also, it figures in the amounts saved by all the 70 somethings who are already retired.



__________________
Al
TromboneAl is offline   Reply With Quote
Re: Question for someone smarter than I
Old 07-18-2006, 11:53 AM   #5
Recycles dryer sheets
 
Join Date: Jun 2006
Posts: 473
Re: Question for someone smarter than I

Quote:
Originally Posted by GMueller
Two things come to mind.* First, most of those zeros belong to the very rich.
I can't access the article since it apparently requires you to sign in, but it looks like they are talking about traditional Defined Benefits (company provided pensions) and Defined Contributions (e.g. 401k) retirement plans. With the latter, your contributions are limited to $15K/y plus Roth in most cases. In the former case, hm, I am not sure what the limits on Defined Benefits plans for higher income employees are as set by PBGC. Probably something to look up in Title 29.

Quote:
Second, I wouldn't be surprised if most of the remaining increase is due to the housing bubble.*
Is the article counting primary residences and other real estate?
__________________
Scrooge is offline   Reply With Quote
Re: Question for someone smarter than I
Old 07-18-2006, 12:11 PM   #6
Thinks s/he gets paid by the post
SteveR's Avatar
 
Join Date: Jul 2005
Posts: 2,803
Re: Question for someone smarter than I

Here is an article from the IRs on how much $$ has been invested in IRAs and 401k account from 1990 to 2002. The title is

ACCUMULATION AND DISTRIBUTIONS OF RETIREMENT ASSETS, 1996-2000
RESULTS FROM A MATCHED FILE OF TAX RETURNS AND INFORMATION RETURNS


link
http://www.irs.gov/pub/irs-soi/03pete.pdf

__________________
Work? I don't have time to work....I'm retired.
SteveR is offline   Reply With Quote
Re: Question for someone smarter than I
Old 07-18-2006, 12:29 PM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
mickeyd's Avatar
 
Join Date: Apr 2004
Location: South Texas~29N/98W
Posts: 5,884
Re: Question for someone smarter than I

Quote:
First, most of those zeros belong to the very rich.
Maybe so GMueler, but Gates and Buffet, for instance, are worth about $100 billion, however I doubt much of that stash is in retirement funds. There are limits on how much even the very wealthy can place in a tax sheltered fund.
__________________
Part-Owner of Texas

Outside of a dog, a book is man's best friend. Inside of a dog, it's too dark to read. Groucho Marx

In dire need of: faster horses, younger woman, older whiskey, more money.
mickeyd is online now   Reply With Quote
Re: Question for someone smarter than I
Old 07-18-2006, 12:51 PM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 13,295
Re: Question for someone smarter than I

Like others have said... statistics can lie...

I remember when Microsoft was flying high and Gates was close to $100 billion... there was an article that said he has as much wealth as the lowest half (145 million) of the population... so Gates = 145 million people in net worth..

Since we will assume that most of those people want to retire someday, they are a bit behind in savings... as they have ON AVERAGE less than $700 net worth...

And how many of those people are actually under water Negative net worth??
__________________
Texas Proud is offline   Reply With Quote
Re: Question for someone smarter than I
Old 07-18-2006, 06:46 PM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
mickeyd's Avatar
 
Join Date: Apr 2004
Location: South Texas~29N/98W
Posts: 5,884
Re: Question for someone smarter than I

Quote:
as they have ON AVERAGE less than $700 net worth...
AWW come on. *They gotta have at least a grand. No?
__________________
Part-Owner of Texas

Outside of a dog, a book is man's best friend. Inside of a dog, it's too dark to read. Groucho Marx

In dire need of: faster horses, younger woman, older whiskey, more money.
mickeyd is online now   Reply With Quote
Re: Question for someone smarter than I
Old 07-18-2006, 10:56 PM   #10
Recycles dryer sheets
 
Join Date: Apr 2005
Posts: 184
Re: Question for someone smarter than I

Quote:
Originally Posted by mickeyd
Mutual funds remained important vehicles for retirement assets, representing about $3.4 trillion of the total.
Also, I don't understand how only 3.4 trillion of the 14.5 is in mutual funds ?* Where's the rest of the money invested ?

I wonder if the bulk of this total is goverment worker defined benefit plans.

__________________
Delawaredave is offline   Reply With Quote
Re: Question for someone smarter than I
Old 07-18-2006, 11:08 PM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 8,627
Re: Question for someone smarter than I

Quote:
Originally Posted by Delawaredave
Also, I don't understand how only 3.4 trillion of the 14.5 is in mutual funds ?* Where's the rest of the money invested ?
It's all in variable annuities.* They don't really count as mutual funds.*
__________________

__________________
LOL! 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
Maternity coverage question skyline Health and Early Retirement 12 05-02-2007 07:31 PM
How to answer questions. ???With a question or assignment????? dex Forum Admin 2 02-25-2007 08:56 AM
Question on Wills............ Cut-Throat FIRE and Money 31 08-31-2006 11:18 AM
Social Security and Pension question guest FIRE and Money 31 06-24-2004 06:19 PM

 

 
All times are GMT -6. The time now is 02:55 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.