Posted on 06/15/2016 8:50:24 AM PDT by Lorianne
When American companies began switching from traditional pensions to self-directed 401(k)-like plans in the 1980s and 1990s, it was supposed to lead to a golden age of retirement security. No longer would workers be at the mercy of the company’s generosity or of Social Security’s solvency; workers themselves would be responsible for saving enough for a comfortable retirement.
Some 30 years later, the results are in: The median working-age couple has saved only $5,000 for their retirement, according to an analysis of the Federal Reserve’s 2013 Survey of Consumer Finances by economist Monique Morrissey of the Economic Policy Institute.
chart at source
(Excerpt) Read more at marketwatch.com ...
And you’d better hope that the illegals who built your house didn’t cut corners, or you’re going to be in for a lot of unpleasant surprises down the road.
I would think these results are highly suspect due to retirements, people who gave up job hunting, etc. It seems to me that if you want to measure the success of the program, you would look at balances at retirement and provide a further subgroup detailing results by amount of contribution. Further, some allowance should also be made for emergency withdrawals.
My wife and I were both forced into early retirement some 8 years earlier than planned. Thankfully we had contributed the maximum amount into our 401 K plans and had resources to draw upon. For us the 401 has been a life saver. Being able to convert these plans into self directed IRAs has also been a benefit.
My husband and I were both let go in August of 2008. We were out of work for 2 years. 401ks are gone. I *hope* to be able to retire when I’m 70 (about 9 years from now) but if I can’t, I hope I can still work.
Thank you for stating this! I’m sick and tired of hearing this crap and frankly it’s mostly bull shit from these smart people who made average income but somehow have their house payed for and five million dollars in the bank. I call bullshit. About ten years ago I bought a nice vehicle, not new but nice I financed it for five years at a very favorable rate. Every year that vehicle was financed I paid more than the entire price of the vehicle every year in taxes. One for me, five for government. Now tell me where the problem is again?
Google “Theresa Ghilarducci”. That’s what they’re gonna do.
Another factor which most people fail to account for is that when you are drawing social security, only 50% of it is counted as taxable income. When it is being confiscated from your paycheck, even the confiscated amount is counted as taxable income. I would really like to have a $500K nest egg when I retire. We are socking away 26% of every paycheck now, but with poor earnings from all but high risk investments, we will be lucky to have $300K.
CALLING UNCLE BERNIE! can you give us all the free money others pay taxes with to support us in the lifestyle we want to have. We are entitled people.
Add up all the fees and taxes plus increase of costs because of regulations. If I could save 20% of that........
The problem is it screws people who have already done exactly that.
Heh — I’m not surprised; this economy sucks, and you’d better believe that unemployment is high.
(I’d wager it’s closer to 45% than the official rate 5%.)
The "FairTax" isn't. We'd be much, much better off with a flat-rate tax w/ no exemptions, no credits, no write-offs, no exceptions.
Remember, the more complicated the system is, the more the government can screw you over.
Part of the reason is the lack of encouragement due to interest rates.
I had a money market account that was paying a moderate 8% in the mid-1990s. Now, similar money market accounts pay 0.75% or less.
In the mid-2000s I had 3 year, 18 month, and 1 year CDs paying around 4%. On renewal each had dropped to about 2%. Then 1%. Then 0.5%
I forgot about the tax on a tax.
I'd argue that my retirement is likely already funded (love that compounding!!), but I'm not so cocky as to give up contributing to it. :-) Amazing what just a little bit at a time adds up to over the long haul.
And what's particularly strange is that I never missed what was contributed. Mrs WBill and I aren't rich - not by any means - but we just made the decision to skip the $5 lattes at Starbucks, and eating out 3 -4 -5 nights a week, and put that cash into savings, mostly retirement. And here we are.
Is that the answer for everyone? Hardly. But it worked for us and it was really easy.
I always wonder about people who absolutely, positively cannot do anything to help themselves in this regard, or more specifically, think that they can't. Mom put away $5/week - she called it her "mad money". Every week, up or down, flush or thin, $5 went into the account that she'd set up with the bank. It wasn't a standard account, maybe an IRA of some sort? No matter, by the time that she retired, it was worth over $80 grand.
Not a fortune, but not bad in comparison. And for less than the cost of a burger-and-fries at McDonalds, once a week. Or, a pack of smokes. Or, a couple of bags of potato chips. Or....you get the point.
It’s really nice if you can put the money away for retirement but when living gets so expensive, what choice is there? Yes, you can do with an older car, do with less cable, do with a cheaper phone, scrimp here and scrimp there.
But there’s also a chance Democrats will just seize your IRAs and 401Ks to fund their next spending splurge too so maybe it is just easier to max out your credit cards and not worry about it.
“And they will cash that in as soon as possible because “an emergency”.”
$5 grand is about half the obamacare deductible, isn’t it?
They were not building much in 1936.
My problem is, if property taxes continue increasing at the same rate for another 20 years, I will not be able to afford the house even without the mortgage. As is they have gone from $1500 to north of $7000.
I buy my sneakers from Wally World for 20-30 bucks not the latest LaBrone or Air Jordan at 2-3 hundred.
My smart phone was so old it went senile. (4 plus years)before I upgraded. We cut out the eating out, vacations, even an occasional movie.
When the wages stagnated we cut back on our spending to keep our savings where we wanted and needed it to be. My take home wages are less than they were in 2008 due to added health Insurance costs.
Instead I chose to save my money.
That is how you save for retirement. You make choices with the money you earn. Some have chosen “poorly”.
This is all the beginning of taking from those that made sacrafices and saved to give to those that didntt.
If Hitlary gets elected expect the personal retirement accounts to be either taxed to death or confiscated for a nation wide socialist type pension fund.
It will be great... /s With all the benefits of Obamacare.
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