Millions Unprepared For Retirement

[aaronc879]

You must have been very frugal. Most 20 somethings cannot save like that. I couldn't.

No one else I worked with saved anywhere near what I did even though they made as much or more than me. I wasn't even as frugal back then as I am now. Seems most people just spend whatever they make, my Brother is one of them. He makes more than I ever did but spends it all.

 

[MC Rider]

I spent ~$14K in 2021 and 2022 not counting the $24K I spent on a new car in 2022 and will likely end up around $12K in 2023. Yes, it does suck to be me and money absolutely would buy happiness for me but a person CAN live on $15K/yr if needed.

My comment wasn't aimed at you. It just seems a tight budget. I wish you well and good luck. And, always look on the bright side of life. I guess you have it sorted out.

 

[flyingaway]

I do not see many homeless retirees on the streets. Those standing at the traffic intersections asking for money are usually in their 20s or 30s.

 

[Sunset]

Not surprising. You can see the 2022 wage statistics here: https://www.ssa.gov/cgi-bin/netcomp.cgi?year=2022
The bottom 22% of workers made less than $15,000 annually in 2022 as recorded by their employers on Form W-2. Good luck building significant savings at that income.

This over counts the people who have more than 1 job as it comes from employers, the employer only knows about the job they pay.

Some employers like to have a bunch of part-timers, so they are flexible with work, some of those employees knowing they can't make it on 25 hours per week, get a second job.

 

[DrRoy]

There is nothing that one can do about others. Some cannot afford to save. Others cannot delay the gratification.

 

[LateToFIRE]

Not surprising. You can see the 2022 wage statistics here: https://www.ssa.gov/cgi-bin/netcomp.cgi?year=2022
The bottom 22% of workers made less than $15,000 annually in 2022 as recorded by their employers on Form W-2. Good luck building significant savings at that income.

Not disputing the notion that it's difficult to build savings from the bottom quartile, but also worth noting those stats do not capture income from the "cash" economy. Many at the bottom quartile paid in hard cold unreported untaxed CASH.

 

[LateToFIRE]

I do not see many homeless retirees on the streets. Those standing at the traffic intersections asking for money are usually in their 20s or 30s.

Where do you live? I have seen plenty of older homeless in most of the U.S. cities I have visited and/or lived in.

 

[Badger]

They don't count home ownership in savings, which is where all/most of my money went when really young...

A few short years after beginning work in 1973 I bought a small house and most of my paycheck went to the mortgage payments after food, insurance, and utilities. Nothing left for savings. Then a few years later went through a divorce and gave her everything so I could keep the empty house. Couldn't start saving to a 401k until I was in my mid 40s.

I generally don't pay any attention to Motley Fool.

Cheers!

 

[marko]

This is supposed to be some sort of revelation? Same as it ever was, IMO.

 

[Rianne]

We were in debt at age 30. Student loans, car payments, and we rented apartments while getting jobs. The tidal wave in the stock market got us where we are today. And of course, pouring every extra dollar we had into it. We bought our first house with a 9% interest rate mortgage.

 

[LateToFIRE]

We were in debt at age 30. Student loans, car payments, and we rented apartments while getting jobs. The tidal wave in the stock market got us where we are today. And of course, pouring every extra dollar we had into it. We bought our first house with a 9% interest rate mortgage.

We must be twins separated at birth! Pretty much same story - at age 30 was just digging out from under massive student loans, starting career, getting married, basically negative NW. I think our starter home mortgage was 8.5%.

Fast forward 10-15 years and the financial picture would have looked unrecognizable by comparison.

 

[Rianne]

We must be twins separated at birth! Pretty much same story - at age 30 was just digging out from under massive student loans, starting career, getting married, basically negative NW. I think our starter home mortgage was 8.5%.

Fast forward 10-15 years and the financial picture would have looked unrecognizable by comparison.

Would have been nice to buy long-term treasuries or CDs back then as well. Just think if you bought a long-term treasury in June 1981. Interest was ~ 20%

 

[LateToFIRE]

Would have been nice to buy long-term treasuries or CDs back then as well. Just think if you bought a long-term treasury in June 1981. Interest was ~ 20%

OH wow

 

[Rianne]

OH wow

Take a look at this historical chart. We've had free money for too long.
https://www.macrotrends.net/2015/fed-funds-rate-historical-chart

 

[LateToFIRE]

Take a look at this historical chart. We've had free money for too long.
https://www.macrotrends.net/2015/fed-funds-rate-historical-chart

Well ok, yeh, I have kind of enjoyed that whole borrow at 2%, invest at whatever, free money thing. Was nice while it lasted.

 

[Gumby]

If you weren't a borrower, the ZIRP era was not a particularly good one. Maybe it is a character defect, but I have never bought on margin or otherwise borrowed money to invest. Nor have I sold short or traded options or futures.

 

[athena53]

They don't count home ownership in savings, which is where all/most of my money went when really young...

That's one part of it but as we know, "sell the house and make a killing" doesn't always work out as a retirement plan. I know a few widows "stuck" in their small houses because they're fully paid for and selling and moving would result in higher costs for whatever they rent. Of course, they can't afford to maintain them, either.

Not disputing the notion that it's difficult to build savings from the bottom quartile, but also worth noting those stats do not capture income from the "cash" economy. Many at the bottom quartile paid in hard cold unreported untaxed CASH.

Which also means they get less from SS.

No one else I worked with saved anywhere near what I did even though they made as much or more than me. I wasn't even as frugal back then as I am now. Seems most people just spend whatever they make, my Brother is one of them. He makes more than I ever did but spends it all.

And the rest of us end up subsidizing them. See Gumby's list. I understand the great needs among people who have worked minimum wage their whole lives, dropped out of the workforce early to care for elderly parents or special needs children or whose bodies broke down after years of hard physical work. Too bad there's no clear line between those who could have saved and didn't, and those who needed all their earnings to put a roof over their heads and food on the table.

 

[LateToFIRE]

If you weren't a borrower, the ZIRP era was not a particularly good one. Maybe it is a character defect, but I have never bought on margin or otherwise borrowed money to invest. Nor have I sold short or traded options or futures.

When I said invest, I meant real property, long-term hold, [mostly] not speculative.

 

[CardsFan]

Not surprising. You can see the 2022 wage statistics here: https://www.ssa.gov/cgi-bin/netcomp.cgi?year=2022
The bottom 22% of workers made less than $15,000 annually in 2022 as recorded by their employers on Form W-2. Good luck building significant savings at that income.

That is a disturbing number. Assuming that's full time employment that would seem like slave wages these days.

This over counts the people who have more than 1 job as it comes from employers, the employer only knows about the job they pay.

Some employers like to have a bunch of part-timers, so they are flexible with work, some of those employees knowing they can't make it on 25 hours per week, get a second job.

I would wager that the majority of the folks with W-2 income less than $15k/yr are casual part-time workers and/or hold down 2-3 of these jobs.

This cohort also includes folks like my 70+ retired secretary. She ushers at Busch Stadium in the summer, mostly to see the games for free, but she makes about $60/game. She is also a greeter at Sam's club (just to get out and do something but makes about $15 and hour), and usher at a few local theaters (some of these are volunteer gigs she does to see the event free). She probably accounts for 3 of the lowest W-2 earners, but she is happily earning a few bucks in retirement while doing things she wants to do.

 

[LateToFIRE]

Which also means they get less from SS...

Yup.

And the rest of us end up subsidizing them...

Yup

Too bad there's no clear line between those who could have saved and didn't, and those who needed all their earnings to put a roof over their heads and food on the table.

Yup, too bad.

 

[LateToFIRE]

I'm convinced that most people [meaning people not on this forum] form an image of the lifestyle they believe they deserve, whether based on how they were raised, who they hang out with or went to school with or work with, what they saw on TV or social media, or some imaginary universe they made up in their head. But, they have a picture of what they should have, and they [irrationally] spend to meet that image.

Admittedly, that's the base I started from. Fortunately, I both met a spouse with other ideas about saving, and was fortunate enough (and worked hard enough) to earn the dough needed to eventually attain the lifestyle I envisioned. The most important lesson I learned, and try to impart to others, is to not put the cart before the horse. There is nothing wrong with wanting to live large - you just shouldn't do that until you've formed a solid financial base to do it from.

 

[Surewhitey]

I didn't know how to save until I was 26-7. Fast forward to 33-4, we were maxing the 401ks and paid for house. ~20 years later, couple mil... Even when taking 3-4 years sabbatical.

We've won the game to this point and still healthy...

 

[Gumby]

... The most important lesson I learned, and try to impart to others, is to not put the cart before the horse. There is nothing wrong with wanting to live large - you just shouldn't do that until you've formed a solid financial base to do it from.

Simpler formulation: "Don't live rich until you are rich."

 

[LateToFIRE]

I'm convinced that most people [meaning people not on this forum] form an image of the lifestyle they believe they deserve, whether based on how they were raised, who they hang out with or went to school with or work with, what they saw on TV or social media, or some imaginary universe they made up in their head. But, they have a picture of what they should have, and they [irrationally] spend to meet that image.

Admittedly, that's the base I started from. Fortunately, I both met a spouse with other ideas about saving, and was fortunate enough (and worked hard enough) to earn the dough needed to eventually attain the lifestyle I envisioned. The most important lesson I learned, and try to impart to others, is to not put the cart before the horse. There is nothing wrong with wanting to live large - you just shouldn't do that until you've formed a solid financial base to do it from.

Simpler formulation: "Don't live rich until you are rich."

+1

TLDR version

 

[Car-Guy]

Maybe it is a character defect, but I have never bought on margin or otherwise borrowed money to invest. Nor have I sold short or traded options or futures.

Simpler formulation: "Don't live rich until you are rich."

+1
Dang, I agree with you twice on one thread. Never thought I'd live to see the day.