CNN: "Retirement Scare"

[sandrark]

I believe it. I've been saving for 20+ years; DH has to be "tricked" into saving - he transfers funds to the joint account each month for all bills, including retirement, and I have it auto-deducted into his IRA for him.

My sister turns 50 this month, and is *proud* of having $10K in her retirement account.

DH's brother is 51, and has no retirement. He's on his third marriage, and his "plan" is to retire to the Phillipines when it comes time. He's also banking on a substantial inheritance.

My mom left her job with vesting and a pension when my step-dad got a new job 2.5 hours away - she was 6 months shy, and she could have worked 4 days a week and crashed at my grandmother's.

Depressing, really.

[disneysteve]

I have many patients in their 70s and even their 80s who still work full time because they have no savings and can't survive on SS alone. Occasionally the topic comes up in conversation and one common response is that they never expected to live this long.

Of course, I also know people who say they "have" to keep working for financial reasons but it is mainly to continue to support their weekly hair salon visit, their weekly manicure, going out to eat a few times/week, going to the movies every weekend, premium cable, etc. My MIL will be 73 this year and falls into that category. On the other hand, you have people like my almost 82 year old mother. She hasn't worked really since she was a young adult. My father died over 19 years ago and she lives comfortably on what they saved while he was alive. She occasionally works here and there. A couple of times she has been doing volunteer work and ended up getting hired for pay because she did such a good job, but she never went seeking a job.

[snshijuptr]

So looking at the methodology the sample was weighted to reflect the actual age distribution in the US. They also assumed that everyone they talked to who wasn't "retired" was a "worker" so this would have included those unemployed or in school as "workers". The sample only included those 25 or older though so there would be fewer people in school. Also, it's hard to tell who would actually answer the telephone and agree to do a survey, more or less successful savers.

I think the income graphs are the most interesting and telling. Of those earning >$75K, 93% have saved something for retirement. Of those earning <$35K, 35% have saved something for retirement.

Other interesting facts
42% of workers have tried calculating their retirement needs
10% of workers don't know what they needs, and 34% think they need < $250K to retire
68% of workers say they are behind in retirement savings

There also seems to be the same, if not more, confidence in Social Security and Medicare.

[LivingAlmostLarge]

$25k with only a Roth IRA is 5 years at $5k/year. And that's if you haven't lost money in the market. So 5-7 years, easily your 20s to get started in saving. It's easier to save with a 401k, but not everyone has that. Also some people may choose to focus on their student loans for a couple of years paying off substantial debt instead of saving. AT 6.8% I can't fault them for doing it.

Article says people 45+ have $250k in assets but people 25-34 are the lowest savers. Sorry that only makes sense because people are probably paying off student loans just starting to save, getting their first job out of college or graduate school.

[PetMom]

You have got to have a really good retirement plan plus a supplemental plan and a 'cushion' and emergency fund.

Amazing how many don't.

When some people change their work they cash in their retirement and spend on something - have known people who do this in their 40's.

They have nice thngs and paid off credit but no retirement savings and it does not bother them at all.

[snafu]

I don't think the majority of workers understand they will be responsible for their retirement. Recent graduates or those relatively new to the workforce can't imagine an event 35 years in the future when there are so many desirable things/toys to buy now. Folks in their 50's still don't understand that their employer does not have to provide a defined pension.

Can you imagine the chaos in Greece as people are finding their government is unable to fund pensions at the current level, government bonds are worth less than half face value and employment is being terminated at unprecedented levels.

Wasn't there a recent study that said most people couldn't come up with $ 1,000. cash if needed?

[disneysteve]

Wasn't there a recent study that said most people couldn't come up with $ 1,000. cash if needed?

Yep. We talked about that a while back. Even in this study, 60% had less than 25K saved. 30% had less than $1,000 saved. So 1 in every 3 people has less than $1,000 to their name. It is pretty scary. I don't care how old you are or how much you earn - you should have savings. My daughter is 16 and has a lot more than $1,000 in savings. There's no excuse for a gainfully employed adult not to have it.

[LivingAlmostLarge]

Greece will happen here soon enough. People here are still very dependent on pensions and it hasn't hit yet that pensions aren't the status quo even for state/government jobs. Another 10 years I predict before people start to retire in droves without pensions and realize that SS is not enough, nor $250k in retirement account when they burn $5k/month or something.

Steve, I can't believe how fast the years have passed on this board. I feel like it was yesterday you were paying for a bah mitzvah. Weird.

[disneysteve]

Steve, I can't believe how fast the years have passed on this board. I feel like it was yesterday you were paying for a bah mitzvah. Weird.

Tell me about it. Now 16 going on 17, driving and looking at colleges. Time flies.

[maat55]

Steve, I can't believe how fast the years have passed on this board. I feel like it was yesterday you were paying for a bah mitzvah. Weird.

I was thinking the same thing.

[kork13]

Steve, I can't believe how fast the years have passed on this board. I feel like it was yesterday you were paying for a bah mitzvah. Weird.

Tell me about it. Now 16 going on 17, driving and looking at colleges. Time flies.

Ditto. It's been some good years here on SA though.

[disneysteve]

Ditto. It's been some good years here on SA though.

It sure has. I love it here and really enjoy getting to "know" all of you.

[LivingAlmostLarge]

Like I should be surprised. I have a two year old and number 2 on the way. So I guess time has passed. I don't feel any richer or any more financial secure though I think we are. I feel the same.

[Like2Plan]

Steve, I can't believe how fast the years have passed on this board. I feel like it was yesterday you were paying for a bah mitzvah. Weird.

Agreed! I can't believe it's been that long, either.

[woodie96]

It really hurts when you start so late like I did.
Was married from '83 to '98 with practice wife #1, and really couldnt afford to save or do anything for retirement. We did do mutual funds for a couple of years in the early 90s, but ended up cashing in those to pay for the divorce.
Now with the awesome current wife, sold her house that she had with her ex, paid off all debt, minus the house we live in and put 20K into mutual funds back in 2008 or so. Started up a 401K at work in 2009 with a 100% match up to 4%.
So here I sit at age 48.....with 40K in mutual funds, and another 25K in my work 401K.
Still have around 5K in savings.
Owe 125K on the house that is appraised at around 375K.
200K in life insurance.

Luckily for me I am retired military, so as long as I live I will have a 3K monthly retirement check. The mutual funds and 401K are all JWROS, so if I do meet an untimely demise, all of that will help my wife survive and hopefully retire and quit working so hard.
Between the anticipated equity in the house, life insurance, and investments....I hope my wife will be happy and able to enjoy life without having to work too long.