29% of people age 55-No retirement savings.

[Jpg1717]

CNBC reports that 29% of people over age 55 have no retirement savings or pension.Of those that do, the average is only $104,000.Most of the people on this forum are in much better financial shape .

 

[Unpaintedhuffhines]

I read these type of statistics all the time. On one hand, it makes me uber proud of what I have accomplished in my life. On the other hand, it makes me sick to my stomach to think of those in that predicament. Yes, some of it (maybe a lot, I have no idea) could be their fault, but still, to be 55 and to have zero retirement savings...I just can't imagine how depressing that would be for me.

 

[Midpack]

Same article the OP linked to, different perspective?

Most [-]Many[/-] Americans are [-]not[/-] financially prepared for retirement, with [-]almost a third[/-] over two thirds of working adults with[-]out[/-] savings, or a pension, according to a Federal Reserve survey published on Wednesday. And 90% of Americans will receive Social Security.

The Fed's 2014 Survey of Household Economics and Decisionmaking found that about [-]38[/-] 62 percent of the more than 5,800 respondents plan to retire [-]have either no intention to retire or plan to keep working for as long as possible[/-].

"Sixty-nine [-]Thirty-one[/-] percent of non-retirees have [-]no[/-] retirement savings or pension," the Fed said, but 90% of Americans will receive Social Security.

Sixty-five percent of respondents viewed their families to be either "doing okay" or "living comfortably" financially, a 3 percentage points increase from the 2013 survey.

Twenty-nine percent expected their income to rise this year, up from 21 percent in the 2013 survey.

"Thirty-one percent of respondents report going without some form of medical care in the past year because they could not afford it," the Fed said.

Sounds OK to me.

Another slow news day, so the CNBC bozos trot out the same tired old stories for the umpteenth time...yawn. They should stick to spending hours/day explaining why the market goes up or down some trivial % on most days, that's their forte.

 

[Walt34]

Same article the OP linked to, different perspective?

True enough of course, but the fact remains that it is going to be a huge social issue. 29% is a significant portion of the population.

That 90% of the population will receive SS benefits doesn't solve much either; the average benefit is very close to the poverty level which means a significant number will be below it.

 

[nash031]

CNBC reports that 29% of people over age 55 have no retirement savings or pension.Of those that do, the average is only $104,000.Most of the people on this forum are in much better financial shape .

Here's the thing I notice about a lot of these retirement articles: they don't tell the whole story. Most of them cite the average 401(k) or 403(b) balances for the groups they're reporting on, and many don't include IRAs in their consideration. Further, they don't look into taxable investment accounts, and few of them consider rental properties and other alternative investments.

If you looked at my and DW's 403(b) retirement accounts, you'd say we have less than $300K saved for retirement, but that's underselling what we consider our retirement assets by more than 50%, and doesn't begin to consider my pension.

I'm sure that the overall health of American retirement is generally poor, but I wish some of these articles would think to look beyond 401(k)s and tell the whole story.

 

[Gumby]

True enough of course, but the fact remains that it is going to be a huge social issue. 29% is a significant portion of the population.

That 90% of the population will receive SS benefits doesn't solve much either; the average benefit is very close to the poverty level which means a significant number will be below it.

I'm wondering how many of that 29% are already on some sort of public assistance and whether their situation will actually change upon "retirement".

 

[aaronc879]

True enough of course, but the fact remains that it is going to be a huge social issue. 29% is a significant portion of the population.

That 90% of the population will receive SS benefits doesn't solve much either; the average benefit is very close to the poverty level which means a significant number will be below it.

I agree. 90% of the population receiving SS benefits doesn't solve the problem. I'm sure the majority of those people with no saving have no savings because they were low income workers and will get maybe $1000/mo from SS if that. If you made good money and still didn't save anything then I have no sympathy but if you worked hard for 40 years at near minimum wage and barely survived let alone saved money then I do have some sympathy for those people. Not everyone if capable of getting a college degree and getting a higher paying job. They work just as hard as people with large incomes but have nothing to show for it.

 

[Walt34]

Here's the thing I notice about a lot of these retirement articles: they don't tell the whole story. Most of them cite the average 401(k) or 403(b) balances for the groups they're reporting on, and many don't include IRAs in their consideration. Further, they don't look into taxable investment accounts, and few of them consider rental properties and other alternative investments.

That's what I wonder about too. Like you, if one looked only at our savings, IRA and TSP balances we'd be considered in bad shape for retirement. But we also have a COLA'd pension and heavily subsidized heath insurance.

That said, I know of several relatives who could be the subjects of articles like that. They'll be living on SS and whatever other assistance they qualify for.

A truly qualified and thorough report would probably be pretty expensive to undertake with all the variables.

 

[haha]

I'm sure that the overall health of American retirement is generally poor, but I wish some of these articles would think to look beyond 401(k)s and tell the whole story.

Telling the real story may be popular in journalism school. But elsewhere, the goal is selling media, and the way to do that is to pander to every fear and prejudice, and hate on the bad guys du jour.

Ha

 

[ulrichw]

That's what I wonder about too. Like you, if one looked only at our savings, IRA and TSP balances we'd be considered in bad shape for retirement. But we also have a COLA'd pension and heavily subsidized heath insurance.

That said, I know of several relatives who could be the subjects of articles like that. They'll be living on SS and whatever other assistance they qualify for.

A truly qualified and thorough report would probably be pretty expensive to undertake with all the variables.

Here's a link to the source report from the GAO (Government Accounting Office). CNBC was just re-reporting the results of a fairly decent report done using our tax dollars: http://www.gao.gov/assets/680/670153.pdf

Some key takeaways (I followed the link trying to poke holes in the original article, but was unable to do so):
- The 29% truly represents people with no retirement savings AND no defined benefit (i.e., pension) plans
- Another 23% have a DB plan and no savings, so if they wanted to slant the results, they could have said 52% of households above 55 years of age have no retirement savings.
- They explicitly state that IRAs are included. Here's the full definition of what "retirement savings" means in this survey:

Retirement Savings: Introduced over 30 years ago, two primary types
of retirement savings vehicles currently exist: employment-sponsored DC
plans (such as 401(k) plans) and IRAs. For both types, benefits accrue in
the form of account balances, which grow from contributions made by
workers (and sometimes by their employers) and investment returns.
Examples of employer-sponsored DC plans include 401(k) plans, 403(b)
plans, and similar plans for which employers can offer payroll deductions,
employer contributions to employee accounts, or both. Individuals can
also save for retirement through IRAs, which allow individuals to make
contributions for retirement without participating in an employmentsponsored
plan.
Workers and employers who contribute to retirement savings accounts
generally receive favorable federal tax treatment, such as tax deductions
for contributions and tax-deferred or even tax-free returns on
investment.
DC plans and IRAs provide tax advantages, portability
of savings, and transparency of known account balances. However, they
also place the primary responsibility on individuals to participate in,
contribute to, and manage their accounts throughout their working
careers, and to manage their savings throughout retirement in order to
keep from running out of money

The report also talks about net worth and sources of income of pre-retirement age and retirement age individuals - there's pretty good data there to support the premise that a lot of retirees and retirement-age people have a very limited security net.

 

[nash031]

Yes, this particular article mentioned IRAs. I've seen plenty of others linked here and not linked here on such - ahem - reputable sources as Yahoo finance, etc., where they talk about how dismal Americans' retirements look based on 401(k) balances at Fido, etc., and that's it. No mention of anything else. So while my complaint may not specifically apply here, it was simply an observation about these types of doomsday articles.

Some folks don't like the options available in their 401k and choose to invest in taxable accounts. While I wouldn't do that, I know quite a few folks in the military who don't put money in their TSP (foolishly, IMO) because they're convinced the funds aren't as good as what they can buy through E-Trade, tax benefits be damned.

So maybe good data in this particular article, but again, not telling the whole story.

 

[Midpack]

True enough of course, but the fact remains that it is going to be a huge social issue. 29% is a significant portion of the population.

That 90% of the population will receive SS benefits doesn't solve much either; the average benefit is very close to the poverty level which means a significant number will be below it.

Though he/she omitted a link http://www.cnbc.com/id/102729377, the OP highlights that '29% 55 or older have no retirement savings,' which many readers might misinterpret as no source of retirement income. But 90% have some (Soc Sec) income.

So 71% have savings and/or pensions (plus Soc Sec for some number of them), leaving somewhere between 0-10% with nothing at age 55. That gives the 0-10% 10-15 years to secure retirement income in some form, or keep working. Better?

Half full, or half empty?

 

[hnzw_rui]

Though he/she omitted a link Most older Americans fall short on retirement savings, the OP highlights that '29% 55 or older have no retirement savings,' which many readers might misinterpret as no source of retirement income. But 90% have some (Soc Sec) income.

So 71% have savings and/or pensions (plus Soc Sec for some number of them), leaving somewhere between 0-10% with nothing at age 55. That gives the 0-10% 10-15 years to secure retirement income in some form, or keep working. Better?

Actually, the other 10% without Social Security might have it better since they're likely the ones who'll get COLA'd pensions which could replace up to 90% of pre-retirement income. My mom has a bunch of co-workers not contributing to their deferred comp plan but can expect pensions of at least 50% of pre-retirement gross income (more like 58% after factoring pension deductions, Medicare, etc).

Most jobs are social security eligible and the ones that aren't tend to have pensions. Unless, you know, you're working under the table or you're not working at all which are quite probably not part of the study.

 

[daylatedollarshort]

there's pretty good data there to support the premise that a lot of retirees and retirement-age people have a very limited security net.

Factors like savings rates and number of households living paycheck to paycheck are pretty consistent among various studies. The picture is not rosy. I don't know what some of our friends and relatives are going to do.

I started getting books from the library and researching in general how to live on very low income just in case some of them need help.

 

[Greencheese]

That's a rather scary number of people with absolutely nothing. Keeping in mind that Obamacare has affected what... 10 million people according to CNBC the last couple of days and its such a huge part of the news since its inception.

 

[Winemaker]

I think the real eye opener to the story was the $104,000 average balance in retirement savings for those 55-64 age bracket and $148,000 avg. bal. of those 65-74 age bracket.

 

[MikeWillRetire]

CNBC reports that 29% of people over age 55 have no retirement savings or pension. .

This isn't so shocking when you consider that the bottom 29% of households have incomes less than $30,000.

 

[dallas27]

You know, I'm in my late thirties, and I'm noticing even my successful friends are making rock-stupid decisions that are going to leave them working until they die. It makes me think when I retire I will be pretty much the only one to do it, at least early.

So I'm expecting to have to find a whole new group of people to associate with. That's the part about these numbers that I find disturbing.

 

[athena53]

I agree. 90% of the population receiving SS benefits doesn't solve the problem. I'm sure the majority of those people with no saving have no savings because they were low income workers and will get maybe $1000/mo from SS if that.

My dentist (also a personal friend) told me that his widowed mother is living on $800/month. I'm assuming it's SS. He says she's got a small IRA but hasn't taken anything out yet so I guess she's too young for RMDs. House is paid for and she gets a break on the property taxes, but they're encouraging her to apply for other government benefits. It's really sad; I think that too many people have SS as their "retirement plan" and it's not enough by itself.

 

[H2ODude]

We and both kids are doing quite well, no problems now nor likely to be. However, MIL worked til 80 in retail until could no longer do it. So we took her by building an addition. Basically had zip diddly except for ~$1200 a month SS. I have no idea what would have become of her without our help. Meanwhile had lunch with former colleague who is also subsidizing his mother. He says it's what's keeping him from ER.

So I guess the point is that while some very low income retirees of today and tomorrow didn't raise children with much better financial outcomes, those that did have somewhat of a safety net. It's interesting though that my former colleague is one for which the elder subsidy is causing some internal family discord, as in his DW not too hep on it.

Caring for elderly retirees....we certainly have learned that we are so glad that we will not become a family friction/burden for the next ones coming along. It can be a real issue for many. Just the emotional toll this created for us was bad enough. The financial was tolerable.

 

[jcretire77]

Yep, My 80 year old mother receives around $700 of SS per month, I give another $600. Her condo and car are paid off. I pay for any big purchases, maybe another $1k a year. She actually lives a nice life and continues to play tennis, bridge, go to movies, etc.

 

[oldphd]

Here's the thing I notice about a lot of these retirement articles: they don't tell the whole story. Most of them cite the average 401(k) or 403(b) balances for the groups they're reporting on, and many don't include IRAs in their consideration. Further, they don't look into taxable investment accounts, and few of them consider rental properties and other alternative investments.

If you looked at my and DW's 403(b) retirement accounts, you'd say we have less than $300K saved for retirement, but that's underselling what we consider our retirement assets by more than 50%, and doesn't begin to consider my pension.

I'm sure that the overall health of American retirement is generally poor, but I wish some of these articles would think to look beyond 401(k)s and tell the whole story.

Count me as another who wouldn't look good on the averages paper... I have a 403b, 457, Roth IRA, SEP Ira, Traditional IRA, Rollover IRA, and After tax account in brokerage, plus checking and 3 savings accounts at different institutions. DW has the after tax, Roth, Traditional, and Rollover. The largest balance in any single account represents about 15% of our investable assets...

 

[Midpack]

So I'm expecting to have to find a whole new group of people to associate with. That's the part about these numbers that I find disturbing.

After 4 years (early) retired, I am finding ^ to be one of the biggest challenges. Not that I didn't know in advance, but I'm faced with hanging out with folks way older than me (not a fan) weekdays or not at all. I am sure a few are out there, but I haven't found another retiree even close to my age yet...

 

[athena53]

So I guess the point is that while some very low income retirees of today and tomorrow didn't raise children with much better financial outcomes, those that did have somewhat of a safety net.

The house we're buying (provided, please, God, the buyer of our current house gets financing) is lakefront and the downstairs, which also looks out onto the lake, has 2 bedrooms, a bath and a full kitchen. The previous owner said his in-laws lived there for 13 years. I'd say their in-laws did very well.

 

[Nords]

Some folks don't like the options available in their 401k and choose to invest in taxable accounts. While I wouldn't do that, I know quite a few folks in the military who don't put money in their TSP (foolishly, IMO) because they're convinced the funds aren't as good as what they can buy through E-Trade, tax benefits be damned.

So maybe good data in this particular article, but again, not telling the whole story.

More than half of the comments I get on my TSP posts say something like "Well, yeah, my sergeant pushes the TSP awfully hard, but I don't want to lock up MY money for over 30 years. I'm getting out next year, and I can't even take my TSP account with me when I leave the military!"

So I exhale a mental sigh and start with the explanations on how to tap the TSP through transfers, rollovers, and conversions. And somewhere in there I have to explain why they can't buy gold or real estate in their TSP (like their brother-in-law is doing with his 401(k)) but yet it's still a better value than whatever investments their (civilian) friends are talking about at parties.

It's been a while since I've seen a recent study, but only about 47% of the military's servicemembers (including Guard & Reserve) have TSP accounts.

Over 80% of the federal civil service has a TSP account, thanks to mandatory enrollment and matching. But over half of those accounts have a pitifully small balance made up of only the minimum mandatory-enrollment contribution. And you know it's in the "G" fund...