About one-quarter of U.S. adults age 50 and older who are not yet retired say they expect to never retire and 70% are concerned about prices rising faster than their income, an AARP survey finds.
About 1 in 4 have no retirement savings, according to research released Wednesday by the organization that shows how a graying America is worrying more and more about how to make ends meet even as economists and policymakers say the U.S. economy has all but achieved a soft landing after two years of record inflation.
Everyday expenses and housing costs, including rent and mortgage payments, are the biggest reasons why people are unable to save for retirement.
I won’t be retiring. Not particularly good with money, plus a divorce, I’m 60, and have about 200K in retirement. It’s my own fault, I could have been far smarter. Now was always far more important than then.
It’s my own fault, I could have been far smarter.
No. No it isn’t. It’s the country’s fault for not giving you enough to retire on even though you didn’t make the best financial decisions over the years. People should not be punished in their old age because they didn’t follow all the right rules of capitalism (which keep changing anyway).
It might be your fault that you’re not as comfortable or as well-off as you would like to be, but it is not your fault that you can’t retire.
Remember that time they moved retirement to 67 in 2015?
I don’t because I was too busy working 50 hrs a week @$14-19$/hr paycheck to paycheck.
And now I have fibromyalgia at 38 and hope I die at 50.
Thanks America.
The law that changed full retirement age to 67 was passed in 1983 (during the Reagan era, no surprise there!) https://bipartisanpolicy.org/explainer/full-retirement-age/ :
“In 1983, Congress increased the full retirement age (FRA) from 65 to 67, a change phased in over the course of 33 years. This phase-in just ended, with the FRA now static at age 67 for individuals reaching age 62 in 2022 or later.” (those born in 1960 or later).
What I always thought was unfair is that those who make the least amount of money get the least amount of Soc Sec, when they are the ones who need it the most. Those who make the most money get the max amount even though they need it the least. Seems backwards.
But I guess it’s at least better than how things were before Social Security when you either had to make enough money to save enough for retirement and/or get a pension from your employer, or else work until you died, not to mention no Soc Sec if you became disabled. It was originally designed as part of the New Deal to help widows and seniors (poverty rate for seniors was over 50%).
It doesn’t even matter if they did follow the right rules. Plenty of people did are still losing now because the rules have rapidly changed over the last 10-20 years, especially since the pandemic with inflation exploding out of control. Property taxes, insurance, medical costs, housing supplies, food are all skyrocketing. The SSA did up the Social Security payout slightly, but that doesn’t help 401k/IRA/pension output one bit.
It also points out another flaw in America. Why does every individual have to be a doctor, tax man, investor, banker? Rather than having people compartmentalized in skill-sets and enabling each other, we’re expected to know 100% of how many jobs work. It’s a waste of collective brain power, and I really believe it stifles creativity and innovation as we all try to just survive. Even with all this knowledge, if one is in the retirement phase when a 2020-2024 happens, one can’t really go back in time to correct for that.
Blaming anyone but yourself is the new hotness around here it seems. Not planning for the future is somehow now your fault but the fault of the country? Sounds a bit entitled to me
Yes it is. Other countries don’t force people to work until they die if they’re poor.
Other countries absolutely do require people to work to support themselves. The US is certainly not unique in this regard. Some countries have universal income or provide care for the elderly but to think it’s the norm is the Lemmy collective putting a bag over their heads.
Yes, shitty third world countries do requite people to work to support themselves until they die.
Non-shithole countries allow people to retire and not do that, even if they’re poor.
Actually, I take that back. Not even all the shitty third world countries. I just googled ‘Rwanda retirement,’ to pick a country at random and they have a government pension scheme.
I’m 60, and have about 200K in retirement
Sadly, I think that puts you way ahead of most Americans.
Your guess is a bit off, average 401k for a 60 year old is north of 400k.
https://finance.yahoo.com/news/average-american-much-retirement-savings-141907331.html
Interesting how you cherry picked there… This kind of thing makes me super curious: was this an honest misreading of the source? Or do you have some agenda here that involves pretending Americans have more retirement savings than they do.
Like I’m not going to copy/paste the entire article, but I recommend going back and reading it again?
Maybe study up on the different types of averages, and why median is often used (and why the median figure in the article is so different than the “average” that you chose to use).
Here I’ll make it extra easy for you, it’s literally in the paragraph right after the numbers:
The difference is important, because averages are relatively easy to skew with outlying data. In the case of the U.S. economy, a small number of households hold vastly more wealth and assets than most others. This skews the average result upwards, making it look like most Americans have more money saved than they actually do.
Also, I’m honestly just not sure how much I care about, specifically, the retirement savings of people aged 55-60. That’s a really narrow range there.
Are you referring to the use of the average rather than the mean amount saved? The article is only like 4 paragraphs and I don’t think there was anything to miss. That said I also have a 401k tracker through my investments and it shows most individuals in that age group have around 400-500k.
It’s like you didn’t even read the entire article you sent… You’re right, it’s not long. Try again to understand it. I’m not going to copy/paste quotes from an article that’s like 2 paragraphs, I’m certain you can figure it out yourself.
And yes, the use of median instead of mean is important, and you end up with a very different (but more accurate) numbers when using it to try to understand this type of statistic, as that way the data isn’t skewed by outliers.
With the median, half of people are above, half are below. If you use the mean (what people generally default to when they hear/say average), you don’t end up with useful information because this is America and we have people with billion dollar bank accounts, and all you need is one or two of those to throw off the mean and make things look higher than they are.
Well looks like I went and explained it anyway…
I think that people don’t really understand what it means when they claim they have no plans to retire. My in-laws are always saying things like “I’ll work until I die” while they take out debt to go on vacations but they recently brought up that we should make sure to get an extra bedroom for them if/when we buy a house. The disconnect is infuriating.
There are reason for them asking about an extra bedroom. And that is at some point, something will happen and they can no longer work at anything. For example, as much as I would still like to do something to do, I can no longer physically work. Even though I can still do things, ain’t no one going to hire me to even be a greeter at Walmart…
Nor do people want to survive and die in a nursing home. It’s not a good place to die. We recently went through this 4 years ago with my Wife’s Father. Fortunately, we have/had the skills to care for someone at end of life. And we gave up our lives to do so. And he was able to die peacefully at home.
Whether or not you choose to do something similar is completely up to you and your family.
I really think that some time should be given to personal finance in school curriculum.
When I went through, we learned to write a check and balance a checkbook. That was it.
Yeah, schools should be teaching more about financial literacy, but it’s impossible to teach kids about good habits for retirement 40+ years down the road when the laws that govern their retirement haven’t been written yet.
Heck, I’m old enough that my first job out of college actually had a pension plan. I never expected to work long enough there to take advantage of it, though. And I was correct – even if I didn’t leave when I did, the place eventually went bankrupt. Any advice they would have given me in high school about retirement savings would be obsolete now.
The only advice that is eternal is to save money, and live below your means. That seems difficult these days, though, especially for young kids just starting out.
My wife has a pension through her employer, it is going to be her last employer until retirement. Hey at least the golden handcuffs are golden.
More and I are in this exact boat. Want to find something - ANYTHING - else but can’t risk losing that pension. Eggs in one basket and all that.
Makes you wonder why more employers aren’t doing it. Puts employees in the awkward position where they can’t quit because the salary is so high.
My oldest did have to take a personal finance class in high school (last year) and did cover things like retirement saving and different methods of. I think some places are trying.
Edit: I, on the other hand, had your experience.
Doesn’t matter how many classes you take when there’s multiple Financial collapses in your lifetime
I think we need to bring back pensions. There is plenty of money around.
Definitely not. While the current situation doesn’t work, neither did pensions. You had to work at one job your whole life, and then were subject to the business decisions of all the sociopathic CEOs throughout your career, as well as whether the corp even survived. I don’t think small companies even had an option. There were some people where this all came together but way too few.
Current IRA and 401k plans have one HUGE benefit: the money is yours. It doesn’t matter whether you change jobs, work for big or small, or the corp goes out of business, the money is yours.
I’m pretty sure more people have some retirement savings now than they did in the days of pensions. Let’s figure out how to turn that into most people having enough savings
What we need is better mandatory contributions to 401Ks. Right now a companies are saving a lot of money compared to pensions by having such low match minimums. Companies also have to auto enroll people, but only at the minimum match level. Lots of pensions required far more commitment that was mandatory.
The money is not yours with an IRA or 401K. It is Goldman’s. They tell you what fund you can invest in and they make it near impossible to roll it into another account and they charge fees for maintenance and for gains.
Sure you on paper own it, but it is really stretching the limits of that word.
I guess I am one of the lucky ones. I will be retiring next year with both a pension and social security. I work in county government and that was one of the perks.
It depends on who is running them. A lot of them aren’t being run well and the federal insurance to protect it is running out of money.
Make that criminally illegal & enforce it & that will stop.
It does but you know so does everything else in life. I think me and you both agree that fire departments should be a thing and I think we both agree that convicted arsonists shouldn’t be running fire departments.
Pensions are a good thing and yes that depends on them being run well. Which really shouldn’t be that hard. Even boring T-Bills and Index funds and land in downtown areas would be fine. I don’t think most people expect their pension fund to return 11% a year.
My high school had a mandatory senior class that taught things like budgeting, investing, filing (very simple) taxes, and balancing a check book. It also required you to do some form of community service. The investing portion was bad as it was basically stock picking with fun money.
It’s hard to say how much the class impacted me as I don’t have a control, and I then proceeded through four years of college not really exercising those skills. I suspect it’s not a silver bullet, but still a positive inclusion in the curriculum.
These days I’m sure we would see students saying they went SPY 0DTE YOLO because of WSB’s popularity
Managing your finances can only do so much when you barely bring in enough to cover rent.
It definitely isn’t the case that a quarter of the country can’t afford to save anything though their whole working life.
Definitely. I’m a branch manager and we’re putting together a financial training class for our employees because everyone is so bad at budgeting (like non existent to I don’t understand percentages … this is common core at work). School system has completely failed at this and many parents have as well.
I’m not sure it will help in this scenario. This is more of an instant gratification thing. Whether someone has a bit extra or not, you’re asking them to do without, on the hope that it will be more useful in half a century. This is completely against human nature.
Seems low.
Doesn’t mean they will, just that 3/4s think they will
So you’re saying a good 50% of Americans have no idea how they could possibly retire, they just think they will anyway.
Anecdotal, but I’ve actually been saving for retirement since I was in my twenties (forty now) and I doubt I’ll actually be able to retire. Most models say I need to put in more than ten percent of my salary and I can’t afford that.
I have never made enough to save for retirement and I’ve been told right here on Lemmy that I shouldn’t be buying my kid Taco Bell and myself a chai latte a couple of times a month to make our lives a little bit more bearable because I should be saving for retirement and providing for her when I’m old so she doesn’t have to take care of me.
Because, you know, $400 a year or whatever that is would definitely be enough to retire on.
Just yesterday, someone actually said to me here, “do you not have a 401k?” as if that were a rarity like leprosy. But then it’s my fault for not being rich enough I guess.
Yeah people really do like to pretend putting pocket change into savings will somehow add up to a 7 figure nest egg.
For context: $400 per year for 35 years (making some assumptions about your age) with 8% average market return (probably optimistic tbh) and you wind up with a whopping $84k to retire on
So yeah, shits fucked
Even if it netted more than that, denying myslef simple pleasures that make my life better today because might might survive long enough to be able to capitalize on that money not spent for the last 10-20 years of my life is not a way I want to live. No one should be expected to be miserable until they retire.
Shit, I’m almost 50 and I’ve been putting 10% or more of my gross pay into a 401(K) since the late 90s. For the last 10 years or so I’ve been occasionally increasing my contributions. I’m up to 16% now. Most of my employers have also done some amount of matching. I have a fair amount saved, but based on current projections, I’m still not sure I’ll have enough to retire at a reasonable age unless I drastically reduce my cost of living (which is already relatively modest). Part of the reason is that the markets have been somewhat volatile over the last 30 years. There have been at least 3 major downturns/recessions, and that means the money I have invested hasn’t grown at the rate that was projected when I started putting it away. There were several years where I saw significant losses in value. I should have a lot more than I actually do at this point. It doesn’t help that my in-laws are totally screwing us over. They retired with no savings at all, sold their home and drove around the country in an RV for 10 years. Now they’re completely out of money and their health is failing so it looks like we’re going to have to spend a significant amount of resources to support them.
I’m 30 and have been putting in 17% the past 5 years or so, fucking hurts and makes it hard sometimes but I don’t want to be working at 80. Most days I can’t decide if I want to live to retirement or not but I’m saving anyway so i don’t screw myself once I hit that age
Welcome to America
Only 1 in 4? 🤔 I’ve NEVER been under the illusion I would retire.
Are you over 50?
Yup!
Did you save at least 20-30% of your income in tax advantaged accounts?
30% on the solar panels. ;)
I’ve got literal $0 for retirement and my bank account is in the red. It’s not going to be too good when I’m old.
I’ve got retirement funds scattered across a half-dozen different companies and honestly I have no idea how to find it. Probably doesn’t amount to more than $150k anyway. Could be half that - I really have no way of knowing. I was planning on never retiring, but the job market says otherwise. I might already be retired. Six weeks into my job search with 25 years of experience and not even an interview much less an offer. It hasn’t been this bad since 2010.
That money is yours no matter how far it is scattered. Try to get in contact with those companies and check in on the accounts. You are allowed to move those funds into a single rollover IRA account with no tax hit if they send the check to the Rollover IRA provider directly.
You might be surprised at what you have. You might remember putting in $150k but it’s possible it has grown quite a bit since then.
You might be surprised at what you have. You might remember putting in $150k but it’s possible it has grown quite a bit since then.
It’s also possible something dumb might have happened, like it ending up in a cash-equivalent sweep account or something, which only makes it more urgent that he get it all rolled over into an IRA that’s set up and paid attention to properly.
Wow, you sound pretty nonchalant about losing $150K!
I mean it’s somewhere. I don’t know what companies hold it but I’m sure there are records somewhere. I probably have to dig through emails up to a decade back - assuming I used personal emails instead of work emails. It really doesn’t matter for another nearly twenty years. I’m sure it’ll turn up.
I sort of have to not think about it to avoid obsessing over it. I’m sure I’m not the first person to not know what institutions hold their 401Ks. There a system for figuring it out.
It’s better to do it ASAP before they’re decreed abandoned. Dig thorough everything and also check your State’s Unclaimed Property dept (or the one for whatever state you were working in I suppose). And/or do some searching online to find out how to reclaim them.
Rolling funds over to consolidate is free and easy, but you have to find it first and do some paperwork. It would really help you to have it all together in one spot that you can pay attention to (yes, that was me a few years back).
Hopefully not your scenario but
- I’d you get divorced, they charge per fund to take half your money, regardless of how much. I lost thousands of dollars unnecessarily just by not having consolidated
It’s not easy. I lost a day of my life with the paperwork and phone calls to do it once. It’s fine, learned my lesson, next time I will go straight to the screaming on the phone.
I would like to see a long term study on how people feel about it because I understand people in their 20s feel like it’s hopeless but it would be nice to know how their opinion evolves as they move through their career.
My late 20s saw the delcine in health of my grandparents who I lived with. Seeing how elder care goes Im more frightened now than ever before. I have more to my name than ever before but seeing how it took a loud fight from the whole family to get the care centers just to take basic care of an elder, knowing I don’t have a spouse and dont plan on having kids, Im terrfied I’m going to die neglected unbathed in the corner of some place that may as well be a mental institution.
The ‘lonelines crisis’ were seeing now is going to lead to many people who become disabled by aging have no family or other support structures to lean on and I wouldn’t be surprised to see sick elderly people dying on the streets in mass in a few decades time.
Tldr: once you’re old enough to start forgetting things, no amount of money can protect you from neglect. You need family to go to bat for you and less and less people are making families. I didn’t used to believe in human euthanasia but now Im praying its legal by the time I get that old.
“…even as economists and policymakers say the U.S. economy has all but achieved a soft landing after two years of record inflation.”
disconnected much?
Perhaps the inflation is under control, but the constant price increases certainly aren’t no matter what they say
Prices only drop of deflation.
Economists only mean prices have increased less this last year for the selection of things they looked at.
They say deflation is terrible, but there are still Japanese in Japan. (Japan has had decades of deflation.)
Economists only mean prices have increased less this last year for the selection of things they looked at.
That bolded part is crucial. A year or two ago, someone in the Biden administration released a report proudly announcing that there’s no longer significant inflation when eliminating housing, groceries and fuel from the calculations 🤦
I am hoping they have Carousel when I turn 70.
Renew! Renew!
At 40 and with $8k in my retirement fund (cashed it out on a business venture right before COVID…live and learn) I’m anticipating to do this as well.
Ah, life.
You’ve got time. Time is your biggest weapon. Start putting aside what you can and let time work for you
Well I’ll retire (sorta). I’ll just get another job making 50% what I was making and earning 75% of my original salary through retirement. I’ll work till I’m dead but at least I’ll make more money for a bit … until inflation eats it.
My dad did this for a while. Had a nice white collar job my entire childhood. He loved boating and owned one for 40+ years. A year or so after he retired from that he got a part time job as a cashier at a marine supply store. He loved the interactions with other boaters. He did that for probably 10 years before retiring fully.
I’m in MI and I’m pretty sure half the staff of any hardware store are retired Big 3 engineers. I’ve talked with them before, and most of them are more than comfortable financially, but just like having a routine, getting out of the house, and the employee discounts.
A part time job after retirement basically keeps people alive. Just sitting on a couch all day watching TV kills you pretty fast.
Incredible. You can bet your ass I won’t work another day after I retire. I’m limping along to get to the finish line even though I still have a few years to go.
A job is far more enjoyable when you know you don’t need it and have to put up with absolutely zero shit since you can leave at any time.
That’s probably low.
I’m 40 and I will work until the day I die.
I just hope that will be in my 60’s rather than my 80’s…
Same but I think I’ll die the day after my mum does.
That way I only need to survive as long as she does.
I have had conversations with evangelicals who believe retiring is morally wrong, based entirely on this one passage:
For even when we were with you, we gave you this command: Anyone unwilling to work should not eat. 2 Thessalonians 3:10
I can’t begin to wrap my head around this.
