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The average Near-Retirement American Household has 12k saved for its retirement

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Piecake

Member
New NIRS research finds retirement savings are dangerously low, and the U.S. retirement savings deficit is between $6.8 and $14.0 trillion

The average working household has virtually no retirement savings. When all households are included— not just households with retirement accounts—the median retirement account balance is $3,000 for all working-age households and $12,000 for near-retirement households.

figure9.jpg
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http://www.nirsonline.org/index.php?option=com_content&task=view&id=768&Itemid=48

And we might be cutting social security benefits soon? Good god, it sure is going to be fun when we have to bail out all of the baby boomers who will be living in poverty pretty soon.

Retirement accounts sure as fuck werent a good solution.
 
K

kswiston

Member
This is part of the reason why a lot of 20-30 somethings have difficulty finding work. The baby boomers never bothered saving for retirement (or lost their investments) and cannot afford to retire from their jobs, even if they are in their 60s.
 
S

Sorian

Banned
I have just as much saved and I'm in my "inbetween" years of taking a break between undergraduate and graduate school. Geez.
 
R

ronito

Member
It's gonna get worse. I have a friend whom I consider to be one of the best in his field. He was recently unemployed and it took him nearly 2 years to find a job mainly because everyone wanted someone younger.
 
S

Stinkles

Clothed, sober, cooperative
Sorian said:
I have just as much saved and I'm in my "inbetween" years of taking a break between undergraduate and graduate school. Geez.
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the fact that you are going to graduate school with no debt means you are wealthy in this context and not relevant.
 
T

The Librarian

Banned
Stinkles said:
the fact that you are going to graduate school with no debt means you are wealthy in this context and not relevant.
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Ayup. I'm very lucky that I didn't have to rely on financial aid for college (graduating May 2014!). Rather than having to divert some of my earnings to pay back the government when I get a job after school, I can immediately start investing or saving it.
 
J

Jeels

Member
Yup, unfortunately our generation is going to have to take care of them. And then we'll have no money of our own.

And the cycle continues.
 
X

XiaNaphryz

LATIN, MATRIPEDICABUS, DO YOU SPEAK IT
Yikes. I suddenly feel a lot better about my 401k hitting 6 figures.

Just rolled it over to a deferred annuity after being laid off since it'll be a good 25+ years before I need to worry about using it.
 
P

PhoenixDark

Banned
This is why the best way to fix America is to institute a 5 trillion dollar stimulus plan to create a giant self sustaining spaceship, put every American over the age of 55 on it, and send it into space
 
F

Foghorn Leghorn

Unconfirmed Member
I moved my wifes 401k to some low yield bonds before the crash in 2008, then rebought company stock after it had bottomed out. The whole time while her company stock was bottomed out she did max contributions, which was tough. She has close to 3/4 million in there now after the stock recovered and sits at an all time high. She started the account in 1998, has company match to 5,000 and earns 45-50 per year.

While it wouldn't be as high without the crash, it would still be higher then 3000 the article quotes. We live kind if frugal lives though, no credit cards, live within our means and have always planned for the future. We've both seen elderly relatives with no money for retirement and at that age you're kind of trapped.
 
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huxley00

Member
I can't really blame them...they worked in an era of pensions, they expected to work for a company most of their life and to be paid back with a retirement fund.

Regardless, it does go to show that people can't be responsible with their money. I'm glad that social security exists as people simply don't plan for their future. The only way to get them to save money is to force them to for the most part.
 
R

robochimp

Member
HovaHovito said:
Lel
Very responsible
Keep that up
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In an economy where wages are stagnant or declining, are people really supposed to be "responsible" and sequester away large chunks of money with which they need to function in the economy?

If we want that to happen compensation needs to rise again.

In the last 5 years I've lost $8500/year in total compensation with my pension being frozen and ever increasing health insurance premiums. Luckily my wife and I can afford to maximize our retirement savings but not everyone can.
 
P

Pyrokai

Member
Fucking hell. Is there ever any good news when it comes to policy and finances for this country? I'm very rarely ever a pessimist when it comes to this stuff, but man it sure feels like we're totally screwed as a country more and more each day. And then I think that it's just going to get worse with the push to strip more Social Security and crap.

What's a positive thing to happen? Anything ever?
 
P

Piecake

Member
Whitechocolatekrispies said:
I'm confused ... Do Americans not have pensions?
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Nope, but we do have social security. The problem is is that the average benefit is 1200 bucks a month.

So the average near-retirement household has to live on 1,200 bucks a month and 12k in savings for the rest of his life.

It is usually less for low income people because they are more often forced to take it sooner and cannot wait till they are 65+ (get more money if you wait)

That sounds rather impossible to me.
 
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pje122

Member
Piecake said:
Nope, but we do have social security. The problem is is that the average benefit is 1200 bucks a month.

So the average near-retirement household has to live on 1,200 bucks a month and 12k in savings for the rest of his life.

It is usually less for low income people because they are more often forced to take it sooner and cannot wait till they are 65+ (get more money if you wait)

That sounds rather impossible to me.
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Speak for yourself. Some of us have pensions. Private pensions, in fact.
 
P

Piecake

Member
pje122 said:
Speak for yourself. Some of us have pensions. Private pensions, in fact.
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I was talking about the average American, and the average American doesnt have a pension.

Well, I should amend that if that person is married they will have 2,400 bucks a month and 12k to live on. So that might be possible so long as you have your house paid off... Would really suck though.
 
C

Chichikov

Member
Pyrokai said:
Fucking hell. Is there ever any good news when it comes to policy and finances for this country? I'm very rarely ever a pessimist when it comes to this stuff, but man it sure feels like we're totally screwed as a country more and more each day. And then I think that it's just going to get worse with the push to strip more Social Security and crap.

What's a positive thing to happen? Anything ever?
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When the people demand it.
Nikolay Chernyshevsky said "the worse, the better", meaning that the worse things get, the more likely it is to get a change.
And while I certainly hope that we can get things better without going through the whole worse phase, I have no doubt that when the shit hit the retirement fan in the US people will demand and get change.
The evil genius of the 401k model is that most people don't really know how fucked up they are.
 
MidgarBlowedUp

MidgarBlowedUp

Member
robochimp said:
In an economy where wages are stagnant or declining, are people really supposed to be "responsible" and sequester away large chunks of money with which they need to function in the economy?
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We have a winner.

Severe Wealth/Income Inequality can not support itself in the long term. In other words, people can't spend money to buy your products if they don't have any money to spend on those products.

In other words

Mr. Richy Rich Business Owner pays his workers $7.25 an hour and offers no benefits. He also raked in 600 million in pure profit over the 10 years the company has been in business.

Richy Rich DoughBoy Production sells DoughBoys for $25 a pop.

None of the workers at the company can afford to spend $25 on DoughBoys because they barely make enough money to pay for the basic necessities to survive in the current economy.

This could have been avoided if Richy Rich DoughBoy Production simply paid the workers 3 or 4 more dollars per hour. And RRDB would have still generated 500+ million in profits.
 
D

Deleted member 13876

Unconfirmed Member
I'm European, but when the bank called me to discuss pension savings a few years back and showed me a bunch of numbers simulating the amount I would get if I started NOW vs later, I was highly skeptical of their claims. With the current climate it seems not to make much sense to sign up for something like this. Even with the fiscal benefits I'm very weary of it.
 
M

mandiller

Member
We've got compulsory superannuation in Australia, which your employer pays and goes into your super fund for when you retire. Does America have that or is it only optional?

$12,000 to retire on sounds awful :(
 
P

Piecake

Member
Nils said:
I'm European, but when the bank called me to discuss pension savings a few years back and showed me a bunch of numbers simulating the amount I would get if I started NOW vs later, I was highly skeptical of their claims. With the current climate it seems not to make much sense to sign up for something like this. Even with the fiscal benefits I'm very weary of it.
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Starting NOW is always a good thing due to the magic of compound interest. Trust me, you'll be kicking yourself if you put it off too late since that means you'll just have to save a shit ton more. (no idea what system you have, but I am assuming its something that you earn interest in)

mandiller said:
We've got compulsory superannuation in Australia, which your employer pays and goes into your super fund for when you retire. Does America have that or is it only optional?

$12,000 to retire on sounds awful :(
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401k and IRAs are voluntary (these are retirement investment vehicles). Only about 50% of people are even offered to a 401k though. Social security is mandatory, but like i said, thats 1,200 bucks a month when you retire, and likely less if those benefits get cut
 
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huxley00

Member
ThisWreckage said:
When people are forced to live paycheck to paycheck the concept of "saving for the future" becomes a foreign one.
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I disagree with this, most of us just buy a lot of stuff we don't need. I just moved last weekend, the sheer amount of purchases that I made that were completely unnecessary is comical. The problem is people buy things that don't need...actually the problem is people buy things they can't afford.
 
R

robochimp

Member
mandiller said:
We've got compulsory superannuation in Australia, which your employer pays and goes into your super fund for when you retire. Does America have that or is it only optional?

$12,000 to retire on sounds awful :(
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We have Social Security which pays you monthly. You and your employer "pay in" while you're working.

The 12,000 figure is just what people have saved outside of social programs.
 
P

pje122

Member
velociraptor said:
How did you do that? What job?
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It's between my fiancee and myself, through our respective employers' company savings plans.
During our last meeting, our financial adviser projected us at between $4 and 5M by the time we retire, not including pension or Roth IRAs.
 
T

ThisWreckage

Banned
huxley00 said:
I disagree with this, most of us just buy a lot of stuff we don't need. I just moved last weekend, the sheer amount of purchases that I made that were completely unnecessary is comical. The problem is people buy things that don't need...actually the problem is people buy things they can't afford.
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Many people barely make enough money to pay for housing, food, insurance, and utilities. What can they possibly cut back on? This sounds like more of the bootstrap comments coming from the Republicans. You are not everyone else. A lot of Americans live paycheck to paycheck. It is a huge problem and there is no money to put back.
 
O

Oracle Dragon

Member
This shit is terrifying. I'm in Canada but I'm sure its no better here. I didn't even get into a position where I could start saving money in retirement funds until my early 30's, and other people don't even get that kind of chance. I make a decent living now, but we run our lives like we made much less and pack away as much as we can into savings, because who knows, I may lose my job tomorrow. I never used to worry too much about those kind of things but then you reach a tipping point where you realize you have less working years in front of you than you had behind.

I feel sure that for my generation and the next you'll see a return to the past where your family was your retirement investment... you take care of the kids at the start, they take care of you at the end.
 
P

Piecake

Member
huxley00 said:
I disagree with this, most of us just buy a lot of stuff we don't need. I just moved last weekend, the sheer amount of purchases that I made that were completely unnecessary is comical. The problem is people buy things that don't need...actually the problem is people buy things they can't afford.
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The median family income is 50,000. Thats a family of 4. that means 49% of households make less than that. How much buying of useless shit is going on in those households?

I think your view is skewed because you sound like you are not supporting 2 children
 
R

robochimp

Member
huxley00 said:
I disagree with this, most of us just buy a lot of stuff we don't need. I just moved last weekend, the sheer amount of purchases that I made that were completely unnecessary is comical. The problem is people buy things that don't need...actually the problem is people buy things they can't afford.
Click to expand...

The problem is not that people buy things they don't need. Our only function in our economy is to buy a bunch of stuff.

The problem is how do you compensate someone now for their "unproductive" years?
 
O

Oracle Dragon

Member
robochimp said:
The problem is not that people buy things they don't need. Our only function in our economy is to buy a bunch of stuff.

The problem is how do you compensate someone now for their "unproductive" years?
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Well, after spending their lifetime making the top 700 families in the country richer, they are supposed to have the good decency to die off ;)
 
P

Pyrokai

Member
huxley00 said:
I disagree with this, most of us just buy a lot of stuff we don't need. I just moved last weekend, the sheer amount of purchases that I made that were completely unnecessary is comical. The problem is people buy things that don't need...actually the problem is people buy things they can't afford.
Click to expand...

The irony of this statement is that if we don't cosume, consume, consume to the point where we can't save, the economy tanks.
 
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