I read until I reached the comment about “perverse” federal policies that make it easy for the rich to save while penalizing the rest of us, blah, blah, blah.
My late father never made more than $40K a year, but he paid cash for a house and socked away enough to leave a $500K nest egg, even after raising two sons, spending 30 years in retirement (he lived to the age of 100) and living in a nursing home for the last year of his life—paid for out of his own pocket; as an “achiever” he received no help from government programs. Dad always put away 15% of his income, and it paid off. It’s a lesson my brother and I learned first hand, and we’re both on track for a secure retirement.
Compare that to my brother-in-law who passed away last week. High school grad, but never tried to get any additional education. Got fired from two jobs for theft and then bounced from one dead-end factory job to another until retirement, and lived off his social security check. When his health began to fail, he was placed in a nursing home, with Medicaid paying most of the bill. If my wife and her sister hadn’t taken out a burial policy, it would have been “pass the hat” time at his funeral.
Most of us don’t plan to fail at retirement, we fail to plan—and too many are more concerned about having it all now, with no concern for what lies ahead.
I know people the same as our father. It is more about personal discipline than anything.
However, for people lacking that in degree or totally, incentives and disincentives do matter. Low interest rates have had a devastating effect on savings.
I have family members who saved a great deal on modest salaries ... but it helped that they could get 8% on CDs etc. Granted you should save anyway, but when there is less incentive to do so it makes a huge difference.
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.