|
|
The "Retirement Crisis" is worse than we thought
02-23-2017, 05:24 AM
|
#1
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,000
|
The "Retirement Crisis" is worse than we thought
Saving for retirement is apparently far less popular than all those dismal surveys have been telling us:
Quote:
More than 66 percent of workers with access to 401(k)s and other defined-contribution retirement saving plans aren’t using them. That’s according to recent research from the Census Bureau, which analyzed tax records to estimate how workers are actually participating in these plans. On top of that, only 14 percent of companies offer these types of retirement plans, far lower than previous estimates...
|
Why most Americans may face an ugly retirement - CBS News
The article points out this data should be more accurate than previous surveys as it...
Quote:
...is based on tax records from almost 155 million individual workers and 6.2 million companies filed in 2012. Most earlier estimates of retirement plan participation rely on survey data, which can be less accurate because people can misreport data given faulty memories or lack of knowledge.
|
If my math is correct (see my sig line), this is saying fewer than 5% of workers (1/3 of 14%) are putting money in a 401k or other defined-contribution plan. That's scary... (See post #4 below)
__________________
Numbers is hard
|
|
|
|
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!
|
02-23-2017, 05:30 AM
|
#2
|
Full time employment: Posting here.
Join Date: Mar 2008
Posts: 979
|
EDIT: Numbers is hard.
Holy crap, that's insane if only 5% of the workforce is thinking ahead in life.
But that can't be the whole picture, right? There are some places that still offer pensions, and then there's the military with retirement.
__________________
I'm free and I like it!
|
|
|
02-23-2017, 05:36 AM
|
#3
|
Recycles dryer sheets
Join Date: Oct 2013
Posts: 265
|
And this is why social security will never go away or be diminished, the tax rates for it will just keep climbing because too many people will have nothing else to retire on.
|
|
|
02-23-2017, 05:45 AM
|
#4
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,000
|
Quote:
Originally Posted by REWahoo
If my math is correct (see my sig line), this is saying fewer than 5% of workers (1/3 of 14%) are putting money in a 401k or other defined-contribution plan. That's scary...
|
Just as I suspected, my math is suspect.
From another source:
Quote:
Bigger companies are the likeliest to offer 401(k) plans, and since they employ more people than small firms, skew the overall number of U.S. workers who have the option. Gideon and Mitchell estimate 79 percent of Americans work at places that sponsor a 401(k)-style plan. The good news is that’s more than 20 points higher than previous estimates. The bad news is that just 41 percent of workers at those employers are making contributions to such a plan—more than 20 points lower than previous estimates.
The combined result of those two numbers is that just 32 percent of American workers are saving anything in a workplace retirement account.
|
https://www.bloomberg.com/news/artic...in-their-401-k
So it isn't 5% catastrophic, only 32% semi-catastrophic.
__________________
Numbers is hard
|
|
|
02-23-2017, 05:50 AM
|
#5
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2008
Posts: 12,566
|
I wonder how many people don't save for retirement because what they make barely covers their living expenses.
I have been using Uber a good deal lately, and the drivers like to chat. I always end up wondering how on earth they make any money. One lady had a nice new Camry with 30,000 miles on it already. She told me she leased the car from Uber and essentially, was driving for them to earn enough to pay the lease on the car she was using for them. I got the impression she hadn't really looked at it that way until after discussing it with me, which probably means I wasn't her favorite fare that day.
__________________
If you understood everything I say, you'd be me ~ Miles Davis
'There is only one success – to be able to spend your life in your own way.’ Christopher Morley.
Even a blind clock finds an acorn twice a day.
|
|
|
02-23-2017, 05:52 AM
|
#6
|
Thinks s/he gets paid by the post
Join Date: Sep 2016
Location: Acworth
Posts: 1,214
|
Quote:
Originally Posted by REWahoo
|
According to this report, 63% of people report currently saving for retirement in some form or another as of last year. The overall picture it paints is still pretty dismal though.
|
|
|
02-23-2017, 06:06 AM
|
#7
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,000
|
Quote:
Originally Posted by exnavynuke
...63% of people report...
|
One thing I thought interesting was the information in the thread article came from an analysis of tax records from 155 million workers and 6.2 million companies. Most other retirement savings information, like this 63% report, comes from surveys which are susceptible to the human trait of trying to look better than you might actually be.
__________________
Numbers is hard
|
|
|
02-23-2017, 06:11 AM
|
#8
|
Full time employment: Posting here.
Join Date: Mar 2008
Posts: 979
|
They say they looked at businesses, but I wonder how many colleges they looked at too. They have some pretty sweet retirement plans (403Bs if I remember right), at least the ones where people I've known worked.
Then there's the Thrift Savings Plan.
So maybe the numbers are slightly better.
__________________
I'm free and I like it!
|
|
|
02-23-2017, 06:13 AM
|
#9
|
Thinks s/he gets paid by the post
Join Date: Mar 2014
Location: Apex and Bradenton
Posts: 1,762
|
Here's some data from Fidelity thru my midicorp chemical company's internal website:
"1 in 6 people contributing to a 401(k) aren't saving enough to get their full company match."
And in the fine print, "Fidelity analysis of 772,000 participants contributing to 401(k) plans that offer an employer matching contribution as of March 31, 2015. "
That was from a campaign to get people to save more, but if you re-arrange the message to 5 in 6 are getting the full company match, it has a more hopeful ring to it. As the old accountant said, "what do you want the numbers to say?"
|
|
|
02-23-2017, 06:20 AM
|
#10
|
Thinks s/he gets paid by the post
Join Date: Sep 2016
Location: Acworth
Posts: 1,214
|
Quote:
Originally Posted by RetiredGypsy
They say they looked at businesses, but I wonder how many colleges they looked at too. They have some pretty sweet retirement plans (403Bs if I remember right), at least the ones where people I've known worked.
Then there's the Thrift Savings Plan.
So maybe the numbers are slightly better.
|
There's also IRA's, defined benefit plans, etc as it seems that report only accounted for workplace 401k's.
|
|
|
02-23-2017, 06:28 AM
|
#11
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2008
Posts: 12,566
|
I always thought that the mandatory OASDI deduction constituted a mandatory "retirement savings." Is that not the case?
Quote:
Originally Posted by Greencheese
And this is why social security will never go away or be diminished, the tax rates for it will just keep climbing because too many people will have nothing else to retire on.
|
__________________
If you understood everything I say, you'd be me ~ Miles Davis
'There is only one success – to be able to spend your life in your own way.’ Christopher Morley.
Even a blind clock finds an acorn twice a day.
|
|
|
02-23-2017, 06:29 AM
|
#12
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2013
Location: Texas
Posts: 10,836
|
Quote:
Originally Posted by Greencheese
And this is why social security will never go away or be diminished,
|
I wouldn't bet on that.
Quote:
Originally Posted by Greencheese
the tax rates for it will just keep climbing because
|
I would bet on that.
|
|
|
02-23-2017, 06:31 AM
|
#13
|
Full time employment: Posting here.
Join Date: Mar 2008
Posts: 979
|
I would feel confident definitively stating that somewhere between 0 and 100% of people are saving for retirement.
I bet I could be a professional analyst with that kind of precision.
__________________
I'm free and I like it!
|
|
|
02-23-2017, 06:37 AM
|
#14
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2013
Location: Texas
Posts: 10,836
|
Quote:
Originally Posted by RetiredGypsy
I would feel confident definitively stating that somewhere between 0 and 100% of people are saving for retirement.
I bet I could be a professional analyst with that kind of precision.
|
I suspect you are well within the margin of error. Most of us are born with nothing, so if we retire with something, I guess technically we have saved. I guess what matters is, how much.
|
|
|
02-23-2017, 06:55 AM
|
#15
|
Recycles dryer sheets
Join Date: May 2016
Location: Finger Lakes of NY
Posts: 136
|
I think that Amethyst has hit the nail on the head. Many people, especially those in rural areas and inner cities, just make enough to get by. There could be a little 'extra' but it is many times spent on unnecessary things as they see no way out...
|
|
|
02-23-2017, 07:09 AM
|
#16
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2005
Posts: 10,252
|
Why should many people even bother with saving in a 401(k) plan at all?
Where does that kind of thinking come from anyways?
There are many other ways to save for retirement for most people that don't lock up their money. There is quite a lot of confusion about what constitutes "saving for retirement" anyways.
Many people don't pay income taxes at all, so unless the 401(k) has a company match, then those folks should just save in a Roth IRA if they can. And since they don't pay income taxes, they don't have high incomes. A single person can contribute up to $5,500 and a married couple can do twice that. What families can afford to put $11,000 a year into retirement savings to begin with? With US median family income of about $52K, that suggests that Roth IRAs could be used to invest 20% of family income annually.
Unfortunately, financial sales reps get their vulture claws into these people and cost them a lot of money whether they use 401(k), IRAs, variable annuities, or whole life insurance.
Perhaps more distressing are the questions that are sometimes asked, such as, "I don't have a retirement plan at work, so how can I save for retirement?" Do you think an insurance agent is going to tell them about a low-expense-ratio, passively-managed Roth IRA when they can sell them whole life insurance?
And the first linked article does people no great favors. It does NOT EVEN MENTION IRAs and things like the Savers Credit.
|
|
|
02-23-2017, 07:14 AM
|
#17
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 37,931
|
Quote:
Originally Posted by Amethyst
I wonder how many people don't save for retirement because what they make barely covers their living expenses.
|
Of course.
__________________
Retired since summer 1999.
|
|
|
02-23-2017, 07:16 AM
|
#18
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2013
Location: Texas
Posts: 10,836
|
Quote:
Originally Posted by LOL!
Why should many people even bother with saving in a 401(k) plan at all?
so unless the 401(k) has a company match,
|
The company 6% matching is what did it for me. In ~25 years my 401k was worth well over 1m.
|
|
|
02-23-2017, 07:37 AM
|
#20
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2008
Location: On a hill in the Pine Barrens
Posts: 9,669
|
Quote:
Originally Posted by Amethyst
I wonder how many people don't save for retirement because what they make barely covers their living expenses.
|
The rising tide has not lifted all boats...
|
|
|
|
|
Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
|
|
Thread Tools |
|
Display Modes |
Linear Mode
|
Posting Rules
|
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts
HTML code is Off
|
|
|
|
» Recent Threads
|
|
|
|
|
|
|
|
|
|
|
|
|
» Quick Links
|
|
|