Boomer Savings etc.

[mickeyd]

Most reading that I've done seem to indicate that boomers are not saving enough. This one says we're doing ok. I guess it all depends on who you talk to.

That's not necessarily reason to panic about retirement savings. Contrary to “common knowledge” baby boomers have done a much better job at saving for retirement than previous generations, due to two major factors: 1) Boomers’ parents were raising so many children they couldn’t afford to save like their children can. 2) The huge number of boomer women in the workforce, whereas prior generations didn't have women as earners.

Another “common knowledge” myth: American are lousy savers. In fact, a recent global survey by insurance giant AXA found that “the U.S. leads the world in saving for retirement.” On average, American workers save almost $700/month — more than twice the amount saved by workers in Germany, Italy, and France.

Nonetheless, increased longevity means that for many, “retirement” will last nearly as long as their careers. The obvious problem is that you’ll have to finance it without being able to count on a paycheck coming every two weeks.

http://www.foxnews.com/story/0,2933,264544,00.html

 

[virginia]

I find it really hard to believe that the average American worker save $700 a month - that would be $1400 for married families. That's could be the average of savings, but there's no way the average Joe is saving that much.

I really suspect that the folks who are bringing in the really big bucks are seriously skewing the average.

 

[UncleHoney]

The AXA numbers on savings, see page 55.

http://www.retirement-scope.axa.com/country/download/2007/retirement_scope_us_en.pdf

 

[chinaco]

I suspect that most people have not saved enough to preserve their lifestyle (or an acceptable lifestyle) in retirement without working to supplement their retirement.

This seems to be the consensus from multiple studies that I have read. The only bit of paranoia about the information is that many of those studies are created by the very finanacial institutions that want to sell me a product or service.

My take: The majority of boomers were caught flat footed in an era where the rules are changing. They did not prepare early enough because they assumed they would have a pension (like dad's). What this means is that except for highly paid people, it is difficult to catchup.

At the same time there are some of us... probably a number on this board that have over saved and could have retired earlier. But we are in the minority.

 

[samclem]

Looking at the data (thanks for the link uncleHoney), the data came from questionaire. Question: "How much do you save for retirement?" So it is self-reported.

 

[Tadpole]

This boomer savings thing is being spun from nowhere to everywhere. I have been wondering/suspecting if the very same spinners that were spinning that those good-for-nothing greedy boomers were not saving suddenly woke up and realized that didn't play well to the privatize social security argument. So now the boomers have excess savings so they don't need that social security check.

What I believe? If you are a boomer and are a good saver, you will need to save enough for yourself and one neighbor who is not a good saver, who lost much of their promised pension or who lost their jobs before retirement age.

It would be interesting to know the actual numbers on the lost potential of pensions and how many over 45 years old that this will effect. I suspect that the savings rate of people between 45-65 has risen but many will never be able to catch up.

 

[lazygood4nothinbum]

i never made more than $40somethingk plus maybe another $10-15k in bennies. and for most of my "career" i was making in the 20s & 30s yet--granted with home equity by purchasing in a rehab area--i managed to put together a net worth of about 1/2mm by the time i was 47. that without even trying nor without retirement as a goal, simply by living life as i normally do. so while early retirement came courtesy of inheritance, even at my low wage, i would have been in good shape by normal retirement age.

of my closest friends. one is winding down now for early retirement at 50. one will be retiring soon at about 53, one could retire if he didn't spend so much. two will be in pretty good shape at normal retirement age. one is in good shape and still launching a new career. two scare me (one using house as atm machine and the other never even put enough money together for a house & neither will come into significant inheritance).

 

[JPatrick]

The "median" savings numer of $352 is a bit easier to swallow. Still I'd bet there are plenty of folks putting up goose egg numbers 00.00

 

[samclem]

The "median" savings numer of $352 is a bit easier to swallow. Still I'd bet there are plenty of folks putting up goose egg numbers 00.00

The small note on the median chart indicates they disregarded any answers that were zero (e.g. not saving at all). So, the median number should be even smaller. Also note that the "mean number" does not "include answers from housewives." (or something like that). I didn't think we could even SAY the word "housewife" anymore!

 

[pedorrero]

The picture may be considerably worse if you are to count future liabilities (e.g. Medicare, social security). Lots of people (not in government, of course) claim that, on the whole, not much is being saved. Buy gold, silver, and other assets while the money's still worth something.