Posted on 03/12/2010 2:18:46 PM PST by Pontiac
Is it too late to save your retirement?
For many, the answer is surely yes. News out this week shows that 29% of those who have already retired have saved nothing at all to support themselves, while only a third have saved at least $50,000.
To put this in context: A retirement account of $50,000 will provide a 65-year-old man with an annuity of just $4,000 a year.
Yet according to the latest annual retirement survey from the Employee Benefit Research Institute, a nonprofit think tank in Washington, two-thirds of those in retirement don't even have that much set aside.
It's true that many will still be okay. That's because they will have a good benefit pension, or a lot of equity in their home, or both. Neither is counted in the survey, and both can be very important.
But neither pensions nor home values are what they once were. And many won't even have them.
Overall, this is a pitiful state of affairs at the tail end of the biggest financial boom in history. Today's retirees lived through the incredible bull market that began in 1982. Bonds as well as shares skyrocketed. Most of them should be rolling in money.
Instead they were relying on ... what? Santa Claus?
The picture is no better for those still working, either—including millions of baby boomers nearing retirement. According to EBRI, just a third of workers have saved $50,000 or more, and nearly a third haven't saved a dime. The numbers got worse, not better, in the last year. Forty percent of workers aren't saving at the moment.
(Excerpt) Read more at online.wsj.com ...
That’s also my experience as well, both in my family and those I know about.
It’s interesting that articles which cite the lack of savings for retirement fiasco don’t mention numbers by groups. Those numbers may or may not reflect huge differences within race, but for sure would reflect huge variances within political affiliation or simply views of life that are included within conservative or liberal thinking.
It’s sort of ironic in that this is one more area of life that has liberals bringing the numbers down, making all of us look like fools, at least on paper and within articles on this subject. I know people that fit into the ‘not much’ numbers and all of them are liberals.
The only conservatives I know that don’t have much are those with liberal children and grandchildren that are liberals with tough love not being practiced. No matter how much money one has, if there are entire clans of liberals to feed and house, its not sufficient.
Of course, the best course to take is - don’t lend funds to family members and don’t co-sign for family members.
I offer this up for discussion. What will any of us do (realistically) if the feds just issue orders for the banks, mutual funds, etc. to transfer one's 401K and other retirement savings/investments from your account to the U.S. Treasury? The financial institutions, accustomeed as they are to complying with Uncle Sam's marching instructions, will undoubtedly comply.
What will any of us do?
The article doesn’t address the home equity of my contemporaries but it slams them for not investing in the gambling pits of the 80s stock markets?
I believe the numbers,but I don’t think they tell the whole story. Lots of people have pensions from the government or their employers that they’re counting on. These folks haven’t been irresponsible, although they have perhaps been naive. The pension plans are in big trouble and we’ll all end up bailing out the folks who haven’t prepared on their own.
shoot.
The gov’t gave people the idea that they didn’t have to save for retirement because SSI would be there for them and that all that money that was being taken from each paycheck was being tucked away in some safe place... HA!
Instead of encouraging thrift and responsibility, the gov’t encourages consuming... they even encourage playing the lottery! They know the average lottery ticket is bought by someone with zero dollars in savings, but they encourage it anyway. How shameful is that?!
Most Americans are completely illiterate when it comes to finances and the gov’t has done nothing to change that. You could even make the case that they have made financial illiteracy much, much worse. They force people to sit through 12 years of gov’t run schools and instead of teaching them the power of compound interest (”the most powerful force in the universe” said Albert Einstein) , no instead of teaching them that, they taught them to demand social justice.
They teach kids that money earned from a for-profit business is dirty and that “rich” is a four-letter word and that anyone who wants to make a lot of money through hard work and sacrifice is a very bad person. The only acceptable way to make money (in a liberal’s eyes) is to work in Hollywood, professional sports or to make billions by selling carbon tax credits.
The government’s propaganda arm, aka Hollywood, churns out shows non-stop, such as Lifestyles of the Rich and Famous, MTV Cribs, Sweet 16... shows that glorify gorging on instant gratification through debt... over-consuming became the norm in the last decade and was something to be admired. People who didn’t have a dime in savings actually paid $1,000 for a pair of high heels and $2,000 for a purse if the girls on Sex and the City wore them. Ridiculous!!
But as for the people who worked hard, saved their money and now have enough to live comfortably or even leave money to their kids? Those people are vilified by politicians as greedy and selfish.
Washington is already planning how to confiscate people’s 401K money and force them to take guaranteed future payments from the gov’t instead (as if they can guarantee anything!). They cannot stand the idea that trillions of dollars are in people’s private savings accounts and they are not free to spend it on more vote-buying entitlements!
You watch, they will swoop in after passing legislation in the middle of the night and hiding it in a 1,000 page bill and say “we need this money and we were the ones who “allowed” you to save it tax-free, we have a right to “borrow” it in this time of crisis”.
It’s sad. It’s evil. And it could have turned out so differently if politicians had the best interest of citizens and the country at heart. They could have actually taught them something in school. They could have rewarded hard work and savings. They could have praised those who made something of themselves.
If they had done that, everyone from the top to the bottom of the income ladder would be more secure. Instead, they were more interested in finding the easiest way to buy votes by promising more goodies and mortgaging the country.
Yep, retirees are broke and although I believe that ultimately it comes down to personal responsibility, the gov’t is without a doubt largely to blame.
cute.
I am not all that worried about it. There has been some level noise from kooky professors and communists at the treasury department. They think we are too stupid to manage our own money and think IRA's ought to be converted to annuities.
If they want to get to the money without triggering a revolution, all they have to do is raise taxes and force people to take it out at an earlier age. They could also just end the programs.
Thank you for your intelligent reply.
Your second paragraph struck me as means around the sure-to-be controversial collection of Americans’ savings and investments. Increasing taxes and forcing people to cash in their money instructments earlier than before would do it. In addition, ending the 401k-type programs would be a means of gathering cash from the American people, i.e., the latter lose the tax savings and the government gathers the taxes previously lost.
It certainly is bleak. What drives me insane are liberal acquaintances who genuinely believe “Oh, there’s no big problem with Social Security,” believing what Media Matters tells them.
What I learned as a small child:
Mr. Dawes Sr, Mr. Banks and Bankers:-PJ
If you invest your tuppence
Wisely in the bank
Safe and sound
Soon that tuppence,
Safely invested in the bank,
Will compoundAnd you'll achieve that sense of conquest
As your affluence expands
In the hands of the directors
Who invest as propriety demandsYou see, Michael, you'll be part of
Railways through Africa
Dams across the Nile
Fleets of ocean greyhounds
Majestic, self-amortizing canals
Plantations of ripening teaAll from tuppence, prudently
Fruitfully, frugally invested
In the, to be specific,
In the Dawes, Tomes
Mousely, Grubbs
Fidelity Fiduciary Bank!Now, Michael,
When you deposit tuppence in a bank account
Soon you'll see
That it blooms into credit of a generous amount
Semiannually
And you'll achieve that sense of stature
As your influence expands
To the high financial strata
That established credit now commandsYou can purchase first and second trust deeds
Think of the foreclosures!
Bonds! Chattels! Dividends! Shares!
Bankruptcies! Debtor sales!Opportunities!
All manner of private enterprise!
Shipyards! The mercantile!
Collieries! Tanneries!
Incorporations! Amalgamations! Banks!Tuppence, patiently, cautiously trustingly invested
In the, to be specific,
In the Dawes, Tomes
Mousely, Grubbs
Fidelity Fiduciary Bank!
Dave Ramsey Ping List Worthy?
A very timely article. Thanks for posting!
If I keep working for another 5 years, between real estate, various other investments, gold, silver and lead I should have a pretty comfortable retirement ahead of me.
People think I’m nuts to be as ‘thrifty’ as I’ve been (when I haven’t necessarily needed to be) but you know what? I’m going to be an old woman sooner than I can snap my fingers and statistically I’ll be ALONE in my Golden Years. I’m not going to be alone and BROKE at the same time, that’s for d@mn sure!
Cabana Boys don’t come cheap, LOL!
Ammo isn't so much for accumulation of wealth, as it is for putting food on the table and taking out the freeloaders and poachers that try to take what remains of your belongings.
I know what I'll do, and it won't be pretty.
"Being necessary for the security of a free state, the right of the people to keep and bear arms shall not be infringed."
Those of us who saved could find our savings snatched away from us by this rapacious government, or devalued by their monetizing of the debt and thereby reducing the buying power of the dollar. And it is possible to live a joyful, fulfilled life without a lot of money--in fact, money has nothing to do with it.
A good friend of mine lost his job, has no pension, is still several years away from Social Security, has zero savings, and will soon run out of unemployment benefits, yet he keeps going to rock concerts and sports events as if there were no tomorrow. I think he is the smart one.
Stop worrying and enjoy this beautiful planet and this beautiful life. God is good.
There are also people who paid into pension plans for years, saw the company hand the pension fund to the government, and then see the pension slashed in half. They saw no need to save on their own, they already had the pension and social security, both already paid for.
I could see a growth business in “community housing” for the elderly. A bed, three meals, a spot on the couch to watch TV - think a rooming house for the elderly. Charge something under the Social Security payout per month, minus taxes, Medicare, and a little for out of pocket expenses. It would be a tight financial game, but there will likely be a lot of old folks too poor to live otherwise and don’t have family to take care of them. And will need such accommodations for years before the nursing home is appropriate.
“All day care for adults”, as compared to “daycare”?
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