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Study: 43% won't have enough in retirement
Old 06-21-2006, 06:09 AM   #1
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Study: 43% won't have enough in retirement



http://money.cnn.com/2006/06/06/reti...ndex/index.htm


http://www.bc.edu/centers/crr/index.shtml
When you do a search for The Center for Retirement Research you find there are other such organizations. I haven't had a chance to look into the site. Maybe the center should contact some of the people on this board.

http://www.bls.gov/cex/csxann04.pdf
This is an interesting study on spending.
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Re: Study: 43% won't have enough in retirement
Old 06-21-2006, 05:59 PM   #2
 
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Re: Study: 43% won't have enough in retirement

Good! - They'll work. Continue to pay into Social Security. I think that program is solvent, with no need for any modifications.

Hopefully the next president will concentrate on real issues.
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Re: Study: 43% won't have enough in retirement
Old 06-21-2006, 06:21 PM   #3
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Re: Study: 43% won't have enough in retirement

Quote:
Most workers don't save for retirement outside of their 401(k)s.
Part of the reason is that society does not encourage savings. For example, Harvard and many Ivy League colleges have admission policy that is finanical blind. That is, they will admit students regardless of financial status and will provide aid based solely on needs. If you do not have any savings and your household income is less than $60K, you will not have to pay at all. Even if your income is above $100K, you will still be eligible for finanical aid. It's amazing that over 70% of the students at Harvard are receiving an average aid of $32K per year. That indicates most household do not have substantial savings since the college requires a parent contribution of 6% from assets. If you have an asset (excluding primary residence, retirement funds) of $500K, your contribution from asset is $30K per year and additional amount from your after-tax income. The expense (tuition, books, room and board, fee) is about $46K. Let's suppose that you have no income. Your financial aid will only be $16K - which is far from the average of $32K.
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Re: Study: 43% won't have enough in retirement
Old 06-21-2006, 06:50 PM   #4
 
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Re: Study: 43% won't have enough in retirement

Quote:
Part of the reason is that society does not encourage savings.
After 9/11, with sales slumping. Bush told America to go 'Shopping'.

hard as this is to believe, it was the most intelligent thing he said in his presidency.
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Re: Study: 43% won't have enough in retirement
Old 06-21-2006, 07:06 PM   #5
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Re: Study: 43% won't have enough in retirement

Quote:
Originally Posted by Cut-Throat
After 9/11, with sales slumping. Bush told America to go 'Shopping'.
hard as this is to believe, it was the most intelligent thing he said in his presidency.
Not much of an achievement. Remember how impressed his dad was by the checkout bar-code scanner when he bought socks?
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Re: Study: 43% won't have enough in retirement
Old 06-21-2006, 07:20 PM   #6
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Re: Study: 43% won't have enough in retirement

I remember that.

Not surprising for a guy who hadnt been in a store in 20 years, and whose credit cards were in a vault in the white house for quite a while...
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Re: Study: 43% won't have enough in retirement
Old 06-21-2006, 08:18 PM   #7
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Re: Study: 43% won't have enough in retirement

Quote:
Originally Posted by Nords
Not much of an achievement. Remember how impressed his dad was by the checkout bar-code scanner when he bought socks?
This was not reported properly by the media. Bush Sr. was impressed that the bar code was mutilated but the bar code reader could still read it properly. Something, apx 17 years later we take for granted.
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Re: Study: 43% won't have enough in retirement
Old 06-21-2006, 09:28 PM   #8
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Re: Study: 43% won't have enough in retirement

Of course they won't have enough!! the estimate is based on:
Quote:
the organization assumed a base target of 73 percent of one's pre-retirement income for all households. In other words, a household with $100,000 in annual income before retirement should be able to generate $73,000 from all sources, including savings, Social Security and pensions. Targets, however, vary according to marital status, gender and income.
I will be FIRE'd and living large on about 30% of my pre-retirement income!!! So I guess it depends on what you expect. I thinks its just more fear mongering designed to sell advice.....
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Re: Study: 43% won't have enough in retirement
Old 06-21-2006, 10:01 PM   #9
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Re: Study: 43% won't have enough in retirement

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Originally Posted by Alex

I will be FIRE'd and living large on about 30% of my pre-retirement income!!! So I guess it depends on what you expect. I thinks its just more fear mongering designed to sell advice.....
Right, but a large number of folks are spending everything they make each month, and couldn't/don't think they could live on 73%, much less 30% of that. Still, I think expectations and spending will moderate as they age, and 73% of present earnings is likely high.
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Re: Study: 43% won't have enough in retirement
Old 06-21-2006, 11:14 PM   #10
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Re: Study: 43% won't have enough in retirement

I don't think spending will moderate as they age. Look at baby boomers still spending everything they make. Many of them aren't ready for retirement and feel entitled to everything.
Also - I don't think most people could live on 30% of what they make. Well, maybe they COULD, but can't - I think most people are overcommitted on the big expenses, namely cars and everything that goes with them. It's the big expenses that get people IMO - not all of the coffees as every money guru claims.
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Re: Study: 43% won't have enough in retirement
Old 06-21-2006, 11:41 PM   #11
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Re: Study: 43% won't have enough in retirement

Quote:
Originally Posted by virginia
...most people are overcommitted on the big expenses, namely cars and everything that goes with them. It's the big expenses that get people IMO - not all of the coffees as every money guru claims.
So true. The gurus say this because it is happy talk. We all would like to think that by making our coffee at home we can save lots of money and retire to a yacht. In reality, most people are pretty well committed financially with little left for savings. And in many cases there isn't much that can be done about it.

Some brag about their cheap 1992 Honda or whatever, but old cars are not as safe, let alone not as nice. More than we might like to admit, you get what you pay for.

Some “cheap living” is not necessarily cheap if actuarially adjusted.

Ha
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Re: Study: 43% won't have enough in retirement
Old 06-22-2006, 12:15 AM   #12
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Re: Study: 43% won't have enough in retirement

I suspect 43% of the people working don't have enough while they are working either...
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Re: Study: 43% won't have enough in retirement
Old 06-22-2006, 07:57 AM   #13
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Re: Study: 43% won't have enough in retirement

12 - 33% from 1993 - 2005, 100 to 110% 2005 and 2006 due to Katrina and remodeling. Expect to crank it down ala Bernicke method in future years although may continue* variable 5% of portfolio if it starts to be too much fun.

Cheap in the LA swamp, getting settled in the burbs(MO) - may change again in a couple years if it gets boring.

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Re: Study: 43% won't have enough in retirement
Old 06-22-2006, 08:59 AM   #14
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Re: Study: 43% won't have enough in retirement

Quote:
Originally Posted by dex
This was not reported properly by the media. Bush Sr. was impressed that the bar code was mutilated but the bar code reader could still read it properly. Something, apx 17 years later we take for granted.
And he wasnt under oath!
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Re: Study: 43% won't have enough in retirement
Old 06-22-2006, 09:23 AM   #15
 
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Re: Study: 43% won't have enough in retirement

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Originally Posted by OldMcDonald
I suspect 43% of the people working don't have enough while they are working either...
I agree. And this number will be growing as more of the middle class downsizes.
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Re: Study: 43% won't have enough in retirement
Old 06-22-2006, 09:58 AM   #16
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Re: Study: 43% won't have enough in retirement

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Originally Posted by HaHa
Some brag about their cheap1992 Honda or whatever, but old cars are not as safe, let alone not as nice. More than we might like to admit, you get what you pay for.
Huh?* My 1996 and 1997 Saturns have airbags and cost $2k and $3k.* Why aren't they safe?* And the 1976 Argosy motorhome with the new brake job seems okay to us...what am I missing?* I don't mind them not being "nice", I guess.*
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Re: Study: 43% won't have enough in retirement
Old 06-22-2006, 11:14 AM   #17
 
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Re: Study: 43% won't have enough in retirement

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Originally Posted by mclesters
Huh? My 1996 and 1997 Saturns have airbags and cost $2k and $3k. Why aren't they safe? And the 1976 Argosy motorhome with the new brake job seems okay to us...what am I missing? I don't mind them not being "nice", I guess.
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Re: Study: 43% won't have enough in retirement
Old 06-22-2006, 02:39 PM   #18
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Re: Study: 43% won't have enough in retirement

Quote:
Originally Posted by virginia
I don't think spending will moderate as they age. Look at baby boomers still spending everything they make. Many of them aren't ready for retirement and feel entitled to everything.
Also - I don't think most people could live on 30% of what they make. Well, maybe they COULD, but can't - I think most people are overcommitted on the big expenses, namely cars and everything that goes with them. It's the big expenses that get people IMO - not all of the coffees as every money guru claims.
I agreee with you about the cars. My neighbor drives a brand new Porsche Cayenne SUV that costs around 70K and a two yr old H-1 Hummer. He bought both new. His house has not been painted in 8 years and the last time he cut his lawn the entire neighborhood went into cardiac arrest due to being so surprised! this guy LOVES his friggin cars! Now, to be fair, I drive some nice cars too, but I buy them 3 years old and I keep them for at least 10 years.
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Re: Study: 43% won't have enough in retirement
Old 06-24-2006, 07:26 AM   #19
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Re: Study: 43% won't have enough in retirement

The 43% number is interesting - and lower than I expected.

I suspect the overall averages are "propped up" by early baby-boomers that are 55-65 now that have "good old days" financial circumstances:
- Defined benefit pensions
- Savings mentality
- Inheritances from depression-era parents

The general public "behind them" is the opposite:
- No pensions
- No saving mentality
- No generational wealth transfer

It will be interesting to see how this all evolves. I read a book "The Upcoming Generational Storm" - which suggests some really scary dynamics over the next 20 years.
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Re: Study: 43% won't have enough in retirement
Old 06-24-2006, 08:09 AM   #20
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Re: Study: 43% won't have enough in retirement

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Originally Posted by Delawaredave
The 43% number is interesting - and lower than I expected.

I suspect the overall averages are "propped up" by early baby-boomers that are 55-65 now that have "good old days" financial circumstances:
* * - Defined benefit pensions
* * - Savings mentality
* * - Inheritances from depression-era parents

The general public "behind them" is the opposite:
* * - No pensions
* * - No saving mentality
* * - No generational wealth transfer

It will be interesting to see how this all evolves.* *I read a book "The Upcoming Generational Storm" - which suggests some really scary dynamics over the next 20 years.
I'm 57 with no pension and no inheritances.

The "general public" behind me IMHO will have the greatest generational wealth transfer ever. I think that we as Boomers have 50 to 100 % or more than our parents. At least in my case.
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