36% of all Americans have less than $1,000 saved for retirement

[tvguy]

This is shocking to me.
Even my 23 year old, who is still a full time student, never worked full time, and never made more than minimum wage has a little more than $1,000 in her ROTH IRA.


http://www.usatoday.com/story/money...retirement-confidence-survey-savings/6432241/

 

[Gumbo4x4]

These stories always make me feel a little better LOL

 

[dsneprincess]

These stories always make me feel a little better LOL

Or like an overachiever for a change!! LOL

 

[eliza61]

This is shocking to me.
Even my 23 year old, who is still a full time student, never worked full time, and never made more than minimum wage has a little more than $1,000 in her ROTH IRA.


http://www.usatoday.com/story/money...retirement-confidence-survey-savings/6432241/

Interesting article. I'm always take these articles with a grain of salt though.

I'm betting your 23 year old daughter does not have a mortgage, 3 kids to raise, car notes, food and clothing for said kids and no raise in 5 years.


Sure my son has a nice wad, he's living at home, going to school, riding in a car brought and paid by parents and a lousy 60 cell phone bill.

As I tell my sons, talked to me about how easy it is to save when you're independant and paying your own way. Then I'll be impressed.

Doesn't surprise me at all.

Philadelphia transit workers have been working without a contract for 6 years. no raise, while the price of their health care has risen twice the rate of inflation. kinda hard to save alot when your busy living.

Now the article says those over 40 should be putting 20% of their salaries in retirement. Really TV, how feasable is that for the average middle class person who at 40 probably has a few kids, a mortgage, health care and living to pay for? then to add insult to injury we also want them to save for college, along with not incurring debt.

 

[crisi]

These stories always make me feel a little better LOL

I'm a Mr. Money Mustache follower from time to time (I don't post there, but Mrs. Pete does under the same user name - or rather, there is a Mrs. Pete over there that sounds a lot like our Mrs. Pete ) And over there its easy to feel like a slacker - those guys are frugal savers all figuring out how to retire early when they only make $60k a year.

Then you read something like this and realize that WalMart had better open up a lot more stores to hire greeters at.

 

[eliza61]

I'm very leary of these studies. Primarily because they are usually done by financial planners. LOL. as a general rule, if you're struggling to make ends meet, you're not talking alot to a financial planner.


I do think one problem we have is that for most of our lives "retirement" is some thing that can be put on the "back" burner.

My kid has a regular savings account and one of the main problems I have with him at 22 is that he's not tying up his cash in some thing he says is going to happen 40 years down the road. And we're not talking about a kid who is a huge "partyer" or "flashy" guy. His car is my old 25 year old nissan with 300K miles on it.

His eyes glaze over whenever I point out that he will be my age, lord willing

Also many folks look at their house as a viable source of retirement income especially if it's paid off.

 

[jiminykrikkit]

About 15%-16% of our population is below the poverty line, so I'm sure that contributes to that 36%. Though the article does state 36% of workers, not Americans in general, so maybe that skews numbers? Bah, don't listen to me, I was a history major.

Interesting article though, thanks for sharing.

 

[wiigirl]

Interesting article.

 

[MaleficentRN]

yes but I'm betting your 23 year old daughter does not have a mortgage, 3 kids to raise, car notes, food and clothing for said kids and no raise in 5 years.

Workers should start saving for retirement from day one of their job, when most people don't have kids and mortgages. When budgeting money, the first thing you pay is yourself, even if it's only $5. You need to take that out first and put into your retirement vehicle of choice and then whatever is left is what you can pay for a mortgage, car, food, ect. Savings shouldn't be leftovers and that's why many have less that 1k for retirement.

 

[Lisa loves Pooh]

yes but I'm betting your 23 year old daughter does not have a mortgage, 3 kids to raise, car notes, food and clothing for said kids and no raise in 5 years.

Typically this is not a sudden onset reality but rather one that builds up over time. What it shows is that retirement was never a priority.

My payments my senior year of college included rent, car, insurance, and braces. I'm sure I could have prioritized and even put 1% of my pay towards retirement. I just chose not to. So I do think it is impressive that his daughter listened to someone's wisdom and opted to forgo something in order to invest.

 

[crisi]

I'm very leary of these studies. Primarily because they are usually done by financial planners. LOL. as a general rule, if you're struggling to make ends meet, you're not talking alot to a financial planner.


I do think one problem we have is that for most of our lives "retirement" is some thing that can be put on the "back" burner.

My kid has a regular savings account and one of the main problems I have with him at 22 is that he's not tying up his cash in some thing he says is going to happen 40 years down the road. And we're not talking about a kid who is a huge "partyer" or "flashy" guy. His car is my old 25 year old nissan with 300K miles on it.

His eyes glaze over whenever I point out that he will be my age, lord willing

Also many folks look at their house as a viable source of retirement income especially if it's paid off.

Yep, most 21 year old kids don't have a lot of foresight. 68 is SO FAR AWAY - its unimaginable. And you don't make that much money - and you have so many needs (a car, an apartment, nice clothes, Cabo....)

And then you are a little older and you get married - you realize all those needs you had a few years ago were childish - but your new needs - they are a big deal - a house, furniture, respectable cars......

And then you have kids - and the needs of the house and the furniture plus the diapers, safe cars, daycare, hockey fees.

And then you realize they need to go to college - and well, retirement will have to wait - but by now you realize that 68 is not so far away after all and you start to get nervous.

And they leave home - but now, you don't have time on your side.

But for the few that do - well, I put away a mere 3% of my piddly small income from my first job when I was 21. I got a match on 1/2 of that. That job lasted five years, and when I quit, I moved that money to an IRA - its $78k now.

 

[eliza61]

Workers should start saving for retirement from day one of their job, when most people don't have kids and mortgages. When budgeting money, the first thing you pay is yourself, even if it's only $5. You need to take that out first and put into your retirement vehicle of choice and then whatever is left is what you can pay for a mortgage, car, food, ect. Savings shouldn't be leftovers and that's why many have less that 1k for retirement.

I'm not saying it shouldn't be Male, but the reality is money is finite.

If I've got 500 and i'm putting 5 bucks away that's great but when health care goes up, food cost go up, car insurance goes up but all I still have is 500 bucks. Please tell me where the "leftovers" are?

You are absolutely right, choices are made and priorities set. If it's a choice between getting my kid medical help, getting my kid food or saving for retirement. Food will come first. If you lose your job, it's easy for us to say "pay yourself first" but if you have to pay the mortgage or keep your funds in your 401K MOST people (yes I know, no one on the dis would dare liquadate their 401k's) probably start spending their retirement savings.

So basically like I said, I'm leary of this so called "studies". they never tell you the circumstances around the people polled, as the article said many are aware they don't have enough to retire on. That tells you there are outside forces effecting their ability to save.

This winter has been brutal here in the Northeast. I know folks who's gas bills have tripled. There disaposable income hasn't trippled so where do they get the money from? So you tell them to pay themselves first or keep the heat on? (yes I know everyone here has 3 months living expenses in the bank, I'm talking about the guy with less than 1000 in the bank). My heating bill for the Dec, Jan, Feb and probably March is going to be double the normal. DOUBLE. for 4 months straight. My salary hasn't doubled so that's extra money going out. now I'm lucky that I have savings but with two kids in college, mortgage yada yada yada, not alot of "pay yourself first" room.

Not saying it's right or wrong, just saying I totally understand how some one can wake up at 48 and realize they don't have enough saved.

 

[eliza61]

Yep, most 21 year old kids don't have a lot of foresight. 68 is SO FAR AWAY - its unimaginable. And you don't make that much money - and you have so many needs (a car, an apartment, nice clothes, Cabo....)

And then you are a little older and you get married - you realize all those needs you had a few years ago were childish - but your new needs - they are a big deal - a house, furniture, respectable cars......

.

LOL I had zippo!! Now one of the problems with me and dh was all our first jobs had defined pensions. 401K's, IRA's were not even thoughts and even with no debt there would have been no way we could have saved 20% of our salary in our 40's. Not without cutting out little things like lights, gas and living in a neighborhood without gunfights.

So while we did not live beyond our means, we had an emergency savings and that's it. We absolutely knew our retirement was taken care of. One of the things you hear me say over and over is one of our regrets was that we didn't save earlier.

Heck, if some one would have told me the price of gas would have been over 3 bucks, I would have called the guys with the white suits on them.

So like I said, I totally understand how life gets in the way. I think back to when I was a stay at home mom. No way could my dh have saved 20% of his salary. then we had a fire in our first house, well not us, we lived in a row home and the unit 2 doors down caught fire. extensive damage. even with home insurance we had to borrow 15K from my dad. that was a good 5 years of not saving for retirement.

Dh diagnosed with cancer. 500 month extra in hospital parking fees, definitely not covered by insurance. Neuprogen shots once a day at 100 dollars a shot, 700 bucks extra. once again, not covered by insurance. wow, amazing how that savings account is eaten up. yep, stop contributions to the 401K because college tuition still needs to be paid, electric still needs to be paid, I still have to go to work so gas needs to be brought.

Don't even get me started on the 5000 bill because my dog came down with diabetes and had to get cataract surgery to reverse his blindness. Ok, so I'm a softie, I'm totally one of those who would give a kidney to her dog.

 

[SC Minnie]

DD is still in college but is working part time and is allowed to contribute to a 401K through the company. DH and I convinced her to put 10% of her income into the 401K now while she doesn't necessarily 'need' the money. One day when she does have bills she might not be able to contribute as much but whatever she's putting in now will keep growing.

We are trying to help her learn from our mistakes. DH and I have a nice amount in our 401K's but if we had started earlier well.....

 

[pjlla]

Think back to your younger years.... wasn't there ONE COFFEE a week, one NEW PAIR OF SHOES, one COCKTAIL per week you could have skipped to save that $5 for retirement??? I can say, for myself, that there sure was.... even during my LEANEST years... but at 23 or 25 or even 30 it is hard to be that disciplined.

We all at some point in time had SOMETHING we could have given up to save that little bit for retirement. It is a (somewhat) rare person who is TRULY living on the very edge with nothing to spare and no place to make cuts... most of us to could find a place to make a change in our budget in order to save a bit more for retirement, but we don't, either through neglect, ignorance, or apathy.

Heck, if I could just have the finance charges and interest back on all of the credit card mistakes I made in my youth, I could retire now!

Anyhow, I know that these numbers are put there to scare us into the warm embrace of a (compensated) financial planner, so I definitely take these figures with a grain of salt...........P

 

[jmartinez1895]

Once upon a time we had a nice sized nest egg, it was not enough to live off of for long, but we where getting there. Then we had a child with many medical needs, my ex started trouble and we had to go to court which cost a lot of money or attorneys. At one point we had to live off credit cards. We are no no longer in debt ( with the exception of the house and a car that will be paid off in a little over a year). We are now starting to build our savings back up, but for a while there is no way we could have even put $5 away and my husband makes a decent living.

 

[MaleficentRN]

Think back to your younger years.... wasn't there ONE COFFEE a week, one NEW PAIR OF SHOES, one COCKTAIL per week you could have skipped to save that $5 for retirement??? I can say, for myself, that there sure was.... even during my LEANEST years... but at 23 or 25 or even 30 it is hard to be that disciplined.

Exactly! Hind sight is 20/20. I could retire today if I had back all that money and invested it them in a good IRA.

 

[MrInfinity]

This is not really surprising or concerning. 36% "of workers". Well what's a worker? Is this everyone 18-65? I don't find that unreasonable then. Between 18 and 21, you're going to college. And 21-24, you're paying off college or going to more college. In one's late 20's, you're not going to have $100k in the bank, you're just starting to save. So the levels of savings the article indicates seem pretty reasonable.

One's early financial goals should involve buying that first car at less than the 5-year plan then paying it off to solidify cash flow for the prime working years (i.e. be able to weather periods of unemployment, job changes, etc). The next goal should be to buy a first time home as early in life as reasonably possible. This is the key to retirement. If you own your home by the time you retire, there is your #1 obligation paid for. The key here is this also helps your mid-life situation because your house payments are typically going to be less than equivalent rent payments - allowing you to deduct taxes and save even more. Roof over your head -- check. So initial savings in one's 20's should be to acquire $25k or whatever is needed for a starter home in the local area then buy a home.

$1000 in an IRA at 23 is fine, but that is not necessarily retirement savings -- that should be tapped for a first time home purchase, which a well-chosen IRA at 23 will let you do.

Once your home is secured and your car, credit cards, and school loans are paid off, it is time to start saving. Put away 5% of your check from 30 to 65 and you will accumulate a decent stash. Between the cash you accumulate like this and the value of owning your home, whether you choose to live in it or sell it and move to a condo, you will do fine.

 

[MaleficentRN]

I'm not saying it shouldn't be Male, but the reality is money is finite.

If I've got 500 and i'm putting 5 bucks away that's great but when health care goes up, food cost go up, car insurance goes up but all I still have is 500 bucks. Please tell me where the "leftovers" are?

You are absolutely right, choices are made and priorities set. If it's a choice between getting my kid medical help, getting my kid food or saving for retirement. Food will come first. If you lose your job, it's easy for us to say "pay yourself first" but if you have to pay the mortgage or keep your funds in your 401K MOST people (yes I know, no one on the dis would dare liquadate their 401k's) probably start spending their retirement savings.

So basically like I said, I'm leary of this so called "studies". they never tell you the circumstances around the people polled, as the article said many are aware they don't have enough to retire on. That tells you there are outside forces effecting their ability to save.

This winter has been brutal here in the Northeast. I know folks who's gas bills have tripled. There disaposable income hasn't trippled so where do they get the money from? So you tell them to pay themselves first or keep the heat on? (yes I know everyone here has 3 months living expenses in the bank, I'm talking about the guy with less than 1000 in the bank). My heating bill for the Dec, Jan, Feb and probably March is going to be double the normal. DOUBLE. for 4 months straight. My salary hasn't doubled so that's extra money going out. now I'm lucky that I have savings but with two kids in college, mortgage yada yada yada, not alot of "pay yourself first" room.

Not saying it's right or wrong, just saying I totally understand how some one can wake up at 48 and realize they don't have enough saved.

You're missing my point. Yes, there are extenuating circumstances,(job loss, unforeseen bills, illness) but is this really happening to 64% of working Americans? Or are many of us making our priorities houses and cars that our out of our price range rather than how we will live when we are 90?

 

[tvguy]

I'm betting your 23 year old daughter does not have a mortgage, 3 kids to raise, car notes, food and clothing for said kids and no raise in 5 years.
.

No, but DW and I did. We have never made 6 figures combined, but always managed to put 15% a year for the past 35 years into retirement.
But, at least with tax deferred retirement plans like 401k's and traditional IRA's we discovered the most of the money we put into retirement was money we would have paid in taxes if we had not had that as a writeoff.
So, if I can't have that money today, at least I will be able to use in when I retire. Far better than uncle sam getting it.

You don't have to watch too many shows with Suze Orman or Gail Vaz Oxlade and see them examine people's finances to see there is almost always money there to be saved.