Many Americans over 55 have zero retirement savings

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tsptalk

tsptalk

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Same old story. Get ready to spread the wealth...

Most older Americans fall short on retirement savings

"A new GAO analysis finds that among households with members aged 55 or older, nearly 29 percent have neither retirement savings nor a traditional pension plan."

http://www.cnbc.com/id/102729377
 
Yeah, wages have been down, but you'd be surprised how many people I talk to or get introduced to - outside the gov't - who find out what I do (with this site) and say, yeah I should really start doing something. I'm talking 40 and 50 years olds who spend the weekend snowmobiling and playing golf. They are just ignorant. They say they are going to contact me and ask about it, but they never (rarely) do.

Retirement planning should be a mandatory class in high school.
 
tsptalk said:
Yeah, wages have been down, but you'd be surprised how many people I talk to or get introduced to - outside the gov't - who find out what I do (with this site) and say, yeah I should really start doing something. I'm talking 40 and 50 years olds who spend the weekend snowmobiling and playing golf. They are just ignorant. They say they are going to contact me and ask about it, but they never (rarely) do.

Retirement planning should be a mandatory class in high school.
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40/50 is the new 20/30 year old.
 
tsptalk said:
Retirement planning should be a mandatory class in high school.
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I couldn't agree more! I can't stand watching my daughter and her husband "struggle" while throwing money away stupidly! I constantly tell them. "you need to save for their retirement, even if it is only 1%, you can keep building on that." But WTH to I know, I'm only 54, and couldn't possibly have a clue!
 
Life choices. Obviously earning a low wage makes retirement savings growth a slow process, especially if you wait until later in life. However making a good salary does not guarantee anything.

I know lots of folks who make a better than average living and at around my age have nothing but good times to show for it.
 
WorkFE said:
Life choices. Obviously earning a low wage makes retirement savings growth a slow process, especially if you wait until later in life. However making a good salary does not guarantee anything.

I know lots of folks who make a better than average living and at around my age have nothing but good times to show for it.
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Exactly. But those making a good salary are more likely to have only themselves to blame for a lack of savings than those making minimum wages.
 
It takes discipline to save regardless of your financial make-up.

We are talking over 55 and ZERO savings. Of course there are variables that are not described in the article. Numerous job losses, poor extended family counting on you for support, tragedy etc.
 
WorkFE said:
It takes discipline to save regardless of your financial make-up.

We are talking over 55 and ZERO savings. Of course there are variables that are not described in the article. Numerous job losses, poor extended family counting on you for support, tragedy etc.
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Right...and one of the main ones probably being health issues. But we can only speculate.

Even so, I agree with you in speculating that the majority of these cases are due to ignorance. Like Tom mentioned, it should be taught in High School.

(I just wanted to be fair and note for the record that there are possibly 'legitimate' reasons a 55 year old can be in this scenario--however unlikely.)
 
No question the amount you earn has a lot to do with a capability to save. Its the mindset/ability that makes it difficult for most along with all those variables that could possibly have something to do with them having ZERO saved.
 
WorkFE said:
No question the amount you earn has a lot to do with a capability to save. Its the mindset/ability that makes it difficult for most along with all those variables that could possibly have something to do with them having ZERO saved.
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Yep...I remember those paycheck-to-paycheck days well.
 
Interesting article, I've noticed this for some time and know quite a few people who make good salaries and are in a similar position.

A lot can be blamed on the 2008-09 meltdown. Not only did some nest-eggs go from healthy amounts to near nothing, but then cash strapped families in bad mortgages as well as the millions who lost their jobs (there were millions of jobs lost) had to dip into their 401K'a to survive, many totally depleting them.

Another longer term symptom...401K's are not what they used to be. Back in the 90's they had much more generous matching than TSP...I knew a few folks who had 8% matching.
Today, nearly a third of companies who offer 401K offer NO Matching. For those who match, average matching is much lower than the 1990s also, near 4%.

And lets face it...we are poor savers, Its the human condition. Especially in our consumer economy where every commercial urges you to use your credit card to keep up with the Jones's.

Make no mistake, this is a huge crisis. And a big part of wage stagnation and no inflation. With an ever increasing senior population, we have a bigger and bigger portion of America that can't afford to pay higher prices for anything. That affects the costs of products, which stays the same, and the salaries/wages that produce those products then stay the same. In the very short term, I guess that is good for us. But not for long.

We need 401K laws like other nations have. Mandatory contributions from your paycheck of at least 3%. Mandatory matching of at least 5%.
And a lockbox...no dipping into your fund is allowed. Australia has this. Some might say this is too much Big Gov't, but we as a nation have proven we can't save for our retirement without the nanny to spank us once in a while. And the crisis they are creating is affecting as all.
 
I honestly think the root cause of this is lack of education / ignorance when it comes to the importance of investing.

When I first joined the military, the TSP was there, but I didn't enroll basically because I barely heard anything about it. It wasn't until I started working my current job 6 years ago, and talking to some of the old timers that I got into investing. Nothing really changed other than just being informed about the importance of putting money aside for retirement (and a little bit of the know-how).

I agree with Tom, there should be a mandatory course in high school dealing with financial /retirement planning / investing.
 
Well, in order to really figure this out, you have to remove 29% of the population of 55-65 year olds as they never saved a dime because the other 71% of them averaged $104k into 100%

Their average retirement account is probably much higher once you remove that 29%

Still its scary.

I have been a saver for so long, I don't think I know how to overspend.
 
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