“Majority of working-age Americans have no retirement savings”

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“Majority of working-age Americans have no retirement savings”

Post by HEDGEFUNDIE » Wed Sep 19, 2018 10:17 am

http://www.pionline.com/article/2018091 ... e=20180918
The median retirement account balance among working-age Americans is zero, according to a research report by the National Institute on Retirement Security, a non-profit research group based in Washington.
...
The report found about 80% of working Americans have less than one year's income saved in retirement accounts. "Also, 77% of Americans fall short of conservative retirement savings targets for their age based on working until age 67, even after counting an individual's entire net worth — a generous measure of retirement savings," the news release said.

The NIRS report noted that even among retirement account savers, the typical worker had a balance of just $40,000.
...
The report added 68% of individuals ages 55 to 64 have retirement savings "equal to less than one time their annual income, which is far below what they will need to maintain their standard of living over their expected years in retirement."

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Re: “Majority of working-age Americans have no retirement savings”

Post by livesoft » Wed Sep 19, 2018 10:22 am

So where do all these retired people that I see all over the US come from? I suspect people do not tell pollsters the truth about their savings.
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Re: “Majority of working-age Americans have no retirement savings”

Post by willthrill81 » Wed Sep 19, 2018 10:24 am

The saving grace for many of these people is that they still have some sort of pension.

But for many, perhaps most, they will have little choice but to keep working until they are physically incapable of doing so. At that point, they'll have to make do with Social Security benefits, which are low since most claim benefits at age 62, or rely on family.

Boomerang parents are already a real phenomenon and one that is likely to grow significantly in coming years.
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Re: “Majority of working-age Americans have no retirement savings”

Post by willthrill81 » Wed Sep 19, 2018 10:25 am

livesoft wrote:
Wed Sep 19, 2018 10:22 am
So where do all these retired people that I see all over the US come from? I suspect people do not tell pollsters the truth about their savings.
Some of the data are objective, such as average 401k balances.

Actually, most people are likely to overstate their savings in surveys.
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Re: “Majority of working-age Americans have no retirement savings”

Post by Thesaints » Wed Sep 19, 2018 10:28 am

They don’t have pensions either, bond yields are at an historical low, and population is aging. We are going to live (and retire) in interesting times...

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Re: “Majority of working-age Americans have no retirement savings”

Post by smitcat » Wed Sep 19, 2018 10:30 am

willthrill81 wrote:
Wed Sep 19, 2018 10:24 am
The saving grace for many of these people is that they still have some sort of pension.

But for many, perhaps most, they will have little choice but to keep working until they are physically incapable of doing so. At that point, they'll have to make do with Social Security benefits, which are low since most claim benefits at age 62, or rely on family.

Boomerang parents are already a real phenomenon and one that is likely to grow significantly in coming years.

"The saving grace for many of these people is that they still have some sort of pension."
About 30% and dropping I am afraid...
https://www.newretirement.com/retiremen ... u-compare/

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Re: “Majority of working-age Americans have no retirement savings”

Post by stoptothink » Wed Sep 19, 2018 10:33 am

willthrill81 wrote:
Wed Sep 19, 2018 10:24 am
The saving grace for many of these people is that they still have some sort of pension.

But for many, perhaps most, they will have little choice but to keep working until they are physically incapable of doing so. At that point, they'll have to make do with Social Security benefits, which are low since most claim benefits at age 62, or rely on family.

Boomerang parents are already a real phenomenon and one that is likely to grow significantly in coming years.
In-laws have already made plans to move (back) in with us, permanently this time, within the next 3 years. FIL is very close to being physically incapable of working anymore and they have a 6-figure negative networth, $0 in retirement, and what little he has coming in the way of social security will be partially garnished due to student loan debt. Mother and stepfather have zero in retirement as well, but at least my stepfather is a teacher (pension) and my mother intends to work until the day she dies; she tearfully told me just a few weeks ago that she will do anything not to put me in the same position that the in-laws have. We have no siblings on either side of the family capable of helping.

I don't know of any of my peers in a similar position, but I can't be alone in having to figure out this inevitable "boomerang" parent situation.

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Re: “Majority of working-age Americans have no retirement savings”

Post by willthrill81 » Wed Sep 19, 2018 10:36 am

smitcat wrote:
Wed Sep 19, 2018 10:30 am
willthrill81 wrote:
Wed Sep 19, 2018 10:24 am
The saving grace for many of these people is that they still have some sort of pension.

But for many, perhaps most, they will have little choice but to keep working until they are physically incapable of doing so. At that point, they'll have to make do with Social Security benefits, which are low since most claim benefits at age 62, or rely on family.

Boomerang parents are already a real phenomenon and one that is likely to grow significantly in coming years.

"The saving grace for many of these people is that they still have some sort of pension."
About 30% and dropping I am afraid...
https://www.newretirement.com/retiremen ... u-compare/
The number is indeed dropping, but we can't ignore that almost a third of retirees have pensions right now.

If 30% of retirees are at least 'okay' with a combination of pension and Social Security, that leaves 70% with no pension. Probably half of those will be at least 'okay' between savings and Social Security. There are also a few out there who receive 'other' types of government aid. So probably about a third of 'retirement age' households are in trouble, which is still a huge number.
Last edited by willthrill81 on Wed Sep 19, 2018 10:49 am, edited 1 time in total.
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Re: “Majority of working-age Americans have no retirement savings”

Post by livesoft » Wed Sep 19, 2018 10:39 am

Is is safe to say that "The majority of retirement-age Americans are retired" ?
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Re: “Majority of working-age Americans have no retirement savings”

Post by willthrill81 » Wed Sep 19, 2018 10:41 am

stoptothink wrote:
Wed Sep 19, 2018 10:33 am
willthrill81 wrote:
Wed Sep 19, 2018 10:24 am
The saving grace for many of these people is that they still have some sort of pension.

But for many, perhaps most, they will have little choice but to keep working until they are physically incapable of doing so. At that point, they'll have to make do with Social Security benefits, which are low since most claim benefits at age 62, or rely on family.

Boomerang parents are already a real phenomenon and one that is likely to grow significantly in coming years.
In-laws have already made plans to move (back) in with us, permanently this time, within the next 3 years. FIL is very close to being physically incapable of working anymore and they have a 6-figure negative networth, $0 in retirement, and what little he has coming in the way of social security will be partially garnished due to student loan debt. Mother and stepfather have zero in retirement as well, but at least my stepfather is a teacher (pension) and my mother intends to work until the day she dies; she tearfully told me just a few weeks ago that she will do anything not to put me in the same position that the in-laws have. We have no siblings on either side of the family capable of helping.

I don't know of any of my peers in a similar position, but I can't be alone in having to figure out this inevitable "boomerang" parent situation.
This was a relatively common situation in the U.S. in the not-so-distant past. My great-grandfather moved in with my grandparents with my mother was small and lived with them for five years before he passed away. It's relatively common in Europe today to have multiple adult generations living in the same domicile.
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Re: “Majority of working-age Americans have no retirement savings”

Post by mptfan » Wed Sep 19, 2018 10:43 am

livesoft wrote:
Wed Sep 19, 2018 10:39 am
Is is safe to say that "The majority of retirement-age Americans are retired" ?
That depends on the definition of "retirement-age Americans."

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Re: “Majority of working-age Americans have no retirement savings”

Post by willthrill81 » Wed Sep 19, 2018 10:45 am

livesoft wrote:
Wed Sep 19, 2018 10:39 am
Is is safe to say that "The majority of retirement-age Americans are retired" ?
According to the BLS, the groups with the largest projected increase in labor force participation are those age 65 and older.

The answer to the entire retirement savings problem is simple: work until you die. I wouldn't call that 'easy' though.
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Re: “Majority of working-age Americans have no retirement savings”

Post by Thesaints » Wed Sep 19, 2018 10:46 am

willthrill81 wrote:
Wed Sep 19, 2018 10:45 am
livesoft wrote:
Wed Sep 19, 2018 10:39 am
Is is safe to say that "The majority of retirement-age Americans are retired" ?
According to the BLS, the groups with the largest projected increase in labor force participation are those age 65 and older.
And not by chance !

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Re: “Majority of working-age Americans have no retirement savings”

Post by livesoft » Wed Sep 19, 2018 10:46 am

Please use "retirement-age" the same as Full-Retirement Age (FRA) for Social Security.
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Re: “Majority of working-age Americans have no retirement savings”

Post by Sasquatch » Wed Sep 19, 2018 10:46 am

livesoft wrote:
Wed Sep 19, 2018 10:22 am
So where do all these retired people that I see all over the US come from? I suspect people do not tell pollsters the truth about their savings.
+1

Why in the world would I want to reveal my financial status to a government agency?

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Re: “Majority of working-age Americans have no retirement savings”

Post by willthrill81 » Wed Sep 19, 2018 10:49 am

Sasquatch wrote:
Wed Sep 19, 2018 10:46 am
livesoft wrote:
Wed Sep 19, 2018 10:22 am
So where do all these retired people that I see all over the US come from? I suspect people do not tell pollsters the truth about their savings.
+1

Why in the world would I want to reveal my financial status to a government agency?
You don't have to. Since all of your bank and investment accounts are linked to your Social Security number, they can easily determine the level of assets you have with a few keystrokes.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: “Majority of working-age Americans have no retirement savings”

Post by mptfan » Wed Sep 19, 2018 10:50 am

livesoft wrote:
Wed Sep 19, 2018 10:46 am
Please use "retirement-age" the same as Full-Retirement Age (FRA) for Social Security.
I think the FRA for social security is 65-66 for current retirees, and according to my research, the average retirement age in the U.S. is in the 63-65 range, so I would say yes, the majority of retirement age Americans are retired.

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Re: “Majority of working-age Americans have no retirement savings”

Post by Thesaints » Wed Sep 19, 2018 10:52 am

The articles says “working age” though...

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Re: “Majority of working-age Americans have no retirement savings”

Post by smitcat » Wed Sep 19, 2018 10:53 am

willthrill81 wrote:
Wed Sep 19, 2018 10:36 am
smitcat wrote:
Wed Sep 19, 2018 10:30 am
willthrill81 wrote:
Wed Sep 19, 2018 10:24 am
The saving grace for many of these people is that they still have some sort of pension.

But for many, perhaps most, they will have little choice but to keep working until they are physically incapable of doing so. At that point, they'll have to make do with Social Security benefits, which are low since most claim benefits at age 62, or rely on family.

Boomerang parents are already a real phenomenon and one that is likely to grow significantly in coming years.

"The saving grace for many of these people is that they still have some sort of pension."
About 30% and dropping I am afraid...
https://www.newretirement.com/retiremen ... u-compare/
The number is indeed dropping, but we can't ignore that almost a third of retirees have pensions right now.

If 30% of retirees are at least 'okay' with a combination of pension and Social Security, that leaves 70% with no pension. Probably half of those will be at least 'okay' between savings and Social Security. There are also a few out there who receive 'other' types of government aid. So probably about a third of 'retirement age' households are in trouble, which is still a huge number.
"If 30% of retirees are at least 'okay' with a combination of pension and Social Security"
My dads pension was $540/month.

"that leaves 70% with no pension. Probably half of those will be at least 'okay' between savings and Social Security."
Not nearly half i am afaid. Most now live and will live on or below poverty level.

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Re: “Majority of working-age Americans have no retirement savings”

Post by nisiprius » Wed Sep 19, 2018 10:54 am

I'm not going to be the one to report this, since it's a grey area and particularly since the discussion has stayed civil, but I'd like to remind everyone of forum policy, particularly the section on "unacceptable topics" that includes:
discussions of the crimes, shortcomings or stupidity of other people, whether they be political figures, celebrities, CEOs, Fed chairmen, subprime mortgage borrowers, lottery winners, federal "bailout" recipients, poor people, rich people, etc. Of course, you are welcome to talk about the stupid financial things you have done.
As an example of a stupid financial thing I did, at age 29 I had zero retirement savings, due to a long stint as a grad student, and ultimately ended up working in a different field and derived no money from my graduate degree. (However, I had a great time doing intrinsically worthwhile things, and that is where I met the person who became my spouse).
Last edited by nisiprius on Wed Sep 19, 2018 10:56 am, edited 1 time in total.
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Re: “Majority of working-age Americans have no retirement savings”

Post by smitcat » Wed Sep 19, 2018 10:55 am

Some additional stats that help explain why most folks take SS as early as possible....
https://www.fool.com/retirement/2018/02 ... ement.aspx

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Re: “Majority of working-age Americans have no retirement savings”

Post by willthrill81 » Wed Sep 19, 2018 10:56 am

smitcat wrote:
Wed Sep 19, 2018 10:53 am
willthrill81 wrote:
Wed Sep 19, 2018 10:36 am
smitcat wrote:
Wed Sep 19, 2018 10:30 am
willthrill81 wrote:
Wed Sep 19, 2018 10:24 am
The saving grace for many of these people is that they still have some sort of pension.

But for many, perhaps most, they will have little choice but to keep working until they are physically incapable of doing so. At that point, they'll have to make do with Social Security benefits, which are low since most claim benefits at age 62, or rely on family.

Boomerang parents are already a real phenomenon and one that is likely to grow significantly in coming years.

"The saving grace for many of these people is that they still have some sort of pension."
About 30% and dropping I am afraid...
https://www.newretirement.com/retiremen ... u-compare/
The number is indeed dropping, but we can't ignore that almost a third of retirees have pensions right now.

If 30% of retirees are at least 'okay' with a combination of pension and Social Security, that leaves 70% with no pension. Probably half of those will be at least 'okay' between savings and Social Security. There are also a few out there who receive 'other' types of government aid. So probably about a third of 'retirement age' households are in trouble, which is still a huge number.
"If 30% of retirees are at least 'okay' with a combination of pension and Social Security"
My dads pension was $540/month.

"that leaves 70% with no pension. Probably half of those will be at least 'okay' between savings and Social Security."
Not nearly half i am afaid. Most now live and will live on or below poverty level.
That's a good point, but I don't put much stock in what is defined as 'poverty level'. My wife and I lived below the poverty level for four years in grad school and did just fine. We actually saved enough during that time to pay cash for a 10 day trip to Hawaii to celebrate graduation. My MiL has lived below the poverty line just fine for over a decade; having a paid for home has been her saving grace though.
Last edited by willthrill81 on Wed Sep 19, 2018 11:05 am, edited 1 time in total.
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Re: “Majority of working-age Americans have no retirement savings”

Post by livesoft » Wed Sep 19, 2018 11:02 am

So the conclusion is that the majority of retirement-age Americans have something to live on.
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Re: “Majority of working-age Americans have no retirement savings”

Post by Thesaints » Wed Sep 19, 2018 11:03 am

Yeah, infants live rather comfortably for years, while being way below the poverty level...

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Re: “Majority of working-age Americans have no retirement savings”

Post by willthrill81 » Wed Sep 19, 2018 11:04 am

livesoft wrote:
Wed Sep 19, 2018 11:02 am
So the conclusion is that the majority of retirement-age Americans have something to live on.
Virtually everyone will receive some amount of Social Security benefits, so they will certainly have 'something' to live on. But the question is whether that 'something' is enough.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: “Majority of working-age Americans have no retirement savings”

Post by LawyersGunsAndMoney » Wed Sep 19, 2018 11:08 am

The percentage of private sector employees with pensions was historically never higher than about one in three.

Many people who were near-poor during their working years and didn't save for retirement people continue to work, or take some type of part-time job because they lack sufficient retirement funds. Easier and more lucrative for white-collar employees with office jobs than blue-collar folks. Very common to receive support from children/family, Section 8 housing, and/or take advantage of local church group for meals and other services to supplement SS income. In general, retirement is about down-sizing and scraping to get by rather than enjoying the "Golden Years."

Others prioritized home ownership over retirement savings, and can either get by with SS income and a bit of help from others living in a paid-off house, or plan to sell, down-size and use the $ from the sale for retirement.

Be wary of Boglehead observations wondering "where all of these poor retirees are." Affluent individuals tend to self-select in their peer groups, their neighborhoods, and their overall life experiences.

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Re: “Majority of working-age Americans have no retirement savings”

Post by AlohaJoe » Wed Sep 19, 2018 11:12 am

Stories like this are always so misleading. If they instead wrote, "Majority of Americans will get by primarily on Social Security alone because they never had high salaries in the first place", I'm sure more people would have a very different reaction.

The median household in the 55-64 age bracket is around $50,000. Assuming that income is split $30,000 for Spouse A and $20,000 for Spouse B that would mean something like $26,000 a year in Social Security benefits. And remember that $50,000 in income is pre-tax. Post-tax it might be more like $45,000.

So already we're at a point where the median household, without saving a single penny, has nearly 60% of their pre-retirement income replaced.

And -- no real surprise -- if you ignore the journalist's spin and read the actual report instead -- you come away with a very different message. Or at least I did.

46.4% of individuals aged 55-64 have (at least) 4x income saved. That might not sound like a lot to a Boglehead but using the same median example from above it means they have (at least) $200,000 and need to withdraw $19,000 from it, assuming no spending reductions at retirement at all. That might sound crazy risky for a Boglehead who wants 0.1% chance of failure assuming a Japan-style meltdown after an alien invasion. But in the real world where people die in their 70s and reduce spending dramatically as they age, those are actually pretty workable numbers.

If you look at the actual numbers it looks more like there are about 20% of people aged 55-64 with no substantial savings and no real expectation of savings growing in the few years before retirement. If you're a glass half full person, that means 80% of Americans are basically okay, albeit taking more risk than most Bogleheads would. If you're a glass half empty person, that means 20% of Americans are doomed. Well, "doomed" in the sense of they'll be constrained to live off of Social Security.

And that 20% number lines up reasonably well with another existing measure -- senior poverty is around 15%. And remember that today's seniors in poverty grew up and worked in that alleged golden age of pensions and home ownership and people understood the value of hard work and blah blah blah.

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Re: “Majority of working-age Americans have no retirement savings”

Post by livesoft » Wed Sep 19, 2018 11:14 am

I, for one, am not wondering where all the poor retirees are. They are everywhere. I see them all the time.
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Re: “Majority of working-age Americans have no retirement savings”

Post by AlohaJoe » Wed Sep 19, 2018 11:15 am

Sasquatch wrote:
Wed Sep 19, 2018 10:46 am
Why in the world would I want to reveal my financial status to a government agency?
There's no government agency involved in this story. Why do you think there is?

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Re: “Majority of working-age Americans have no retirement savings”

Post by Thesaints » Wed Sep 19, 2018 11:17 am

AlohaJoe wrote:
Wed Sep 19, 2018 11:12 am
Stories like this are always so misleading. If they instead wrote, "Majority of Americans will get by primarily on Social Security alone because they never had high salaries in the first place", I'm sure more people would have a very different reaction.

The median household in the 55-64 age bracket is around $50,000. Assuming that income is split $30,000 for Spouse A and $20,000 for Spouse B that would mean something like $26,000 a year in Social Security benefits. And remember that $50,000 in income is pre-tax. Post-tax it might be more like $45,000.

So already we're at a point where the median household, without saving a single penny, has nearly 60% of their pre-retirement income replaced.

And -- no real surprise -- if you ignore the journalist's spin and read the actual report instead -- you come away with a very different message. Or at least I did.

46.4% of individuals aged 55-64 have (at least) 4x income saved. That might not sound like a lot to a Boglehead but using the same median example from above it means they have (at least) $200,000 and need to withdraw $19,000 from it, assuming no spending reductions at retirement at all. That might sound crazy risky for a Boglehead who wants 0.1% chance of failure assuming a Japan-style meltdown after an alien invasion. But in the real world where people die in their 70s and reduce spending dramatically as they age, those are actually pretty workable numbers.

If you look at the actual numbers it looks more like there are about 20% of people aged 55-64 with no substantial savings and no real expectation of savings growing in the few years before retirement. If you're a glass half full person, that means 80% of Americans are basically okay, albeit taking more risk than most Bogleheads would. If you're a glass half empty person, that means 20% of Americans are doomed. Well, "doomed" in the sense of they'll be constrained to live off of Social Security.

And that 20% number lines up reasonably well with another existing measure -- senior poverty is around 15%. And remember that today's seniors in poverty grew up and worked in that alleged golden age of pensions and home ownership and people understood the value of hard work and blah blah blah.
these people were not living large when they were working and they will live in even worse conditions while retired.

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Re: “Majority of working-age Americans have no retirement savings”

Post by Broken Man 1999 » Wed Sep 19, 2018 11:18 am

stoptothink wrote:
Wed Sep 19, 2018 10:33 am
willthrill81 wrote:
Wed Sep 19, 2018 10:24 am
The saving grace for many of these people is that they still have some sort of pension.

But for many, perhaps most, they will have little choice but to keep working until they are physically incapable of doing so. At that point, they'll have to make do with Social Security benefits, which are low since most claim benefits at age 62, or rely on family.

Boomerang parents are already a real phenomenon and one that is likely to grow significantly in coming years.
In-laws have already made plans to move (back) in with us, permanently this time, within the next 3 years. FIL is very close to being physically incapable of working anymore and they have a 6-figure negative networth, $0 in retirement, and what little he has coming in the way of social security will be partially garnished due to student loan debt. Mother and stepfather have zero in retirement as well, but at least my stepfather is a teacher (pension) and my mother intends to work until the day she dies; she tearfully told me just a few weeks ago that she will do anything not to put me in the same position that the in-laws have. We have no siblings on either side of the family capable of helping.

I don't know of any of my peers in a similar position, but I can't be alone in having to figure out this inevitable "boomerang" parent situation.
Wow!

Is your FIL's student loan debt for HIS education expenses, or is it on behalf of another member of the family?

MIL lived with us the last few years of her life, My parents and DW's father passed before her. We helped her, but her SS covered all her needs, especially after paying back people for all the borrowing she did around her home town, all the while telling all her children she was doing fine!

Turns out she wasn't honest, she wanted to convince everyone she could live on a SS payment of around $1000/month. Nope. At least not independently.

The TV show The Golden Girls showed a way to pool resources, it surprises me that more people don't do that. Especially those who have no relatives nearby. I would think sharing a large home would also reduce isolation and loneliness amongst those who are perhaps homebound.

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SevenBridgesRoad
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Re: “Majority of working-age Americans have no retirement savings”

Post by SevenBridgesRoad » Wed Sep 19, 2018 11:20 am

It's often interesting to look behind the curtain at the organizations publishing such information. A quick glance at the National Institute on Retirement Security shows they are a Washington D.C. lobbying group funded mostly by state government retirement systems. I would view their published study results with an understanding they may have an agenda.
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Watty
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Re: “Majority of working-age Americans have no retirement savings”

Post by Watty » Wed Sep 19, 2018 11:21 am

Majority of working-age Americans have no retirement savings”
Statistics are tricky.

The majority of "working-age" Americans are probably younger than 40 and may have recently been dealing with increasing their net worth by paying off student loans or saving up the down payment for their first house.

The article also talks about individuals but it would have been much better to have looked at households. Many couples have all or most of their retirement saving in one spouses retirement account or 401k. For example my 401k was our main retirement savings account, my wife has a limited amount in her IRA so if you looked at us individually half of us would look to be unprepared for retirement.

There are no doubt a lot of people that are unprepared for retirement but it is really hard to quantify.

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Re: “Majority of working-age Americans have no retirement savings”

Post by garlandwhizzer » Wed Sep 19, 2018 11:23 am

I believe it is likely that there will be a retirement/long term care/medical care for elderly crisis or problem in the US and in all DMs which will manifest itself in the near future if not already. People talk about the elderly living on SS and meager savings. Try that if you're demented, severely ill, or need long term care. You wind up consuming vastly more than you can pay for. Our economy has great strength and great creativity to handle shocks, but I do suspect that debt, demographics, and the failure of many to plan adequately for the future will result in a long period of slower economic growth and lower investment returns than we have historically produced in the US.

Currently interest rates have been ultra-low for more than a decade but they have failed to produce robust economic growth. Likewise increasing budget deficit spending aimed at raving up the economy with only modest results, avoiding a repeat of the Great Depression but main street still struggling. Historically fiscal and monetary stimulus to this degree fired up the economy into robust growth and overheated it, producing ever increasing inflation. This has not happened this time around which may be a hint that things have departed somewhat from the historical pattern. Our situation is not a disaster but IMO the robust investment returns of our 9 year "recovery" from the Great Recession will not continue indefinitely.

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Re: “Majority of working-age Americans have no retirement savings”

Post by Maverick3320 » Wed Sep 19, 2018 11:25 am

willthrill81 wrote:
Wed Sep 19, 2018 10:49 am
Sasquatch wrote:
Wed Sep 19, 2018 10:46 am
livesoft wrote:
Wed Sep 19, 2018 10:22 am
So where do all these retired people that I see all over the US come from? I suspect people do not tell pollsters the truth about their savings.
+1

Why in the world would I want to reveal my financial status to a government agency?
You don't have to. Since all of your bank and investment accounts are linked to your Social Security number, they can easily determine the level of assets you have with a few keystrokes.
Then why do we spend so much time doing taxes?

randomguy
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Re: “Majority of working-age Americans have no retirement savings”

Post by randomguy » Wed Sep 19, 2018 11:28 am

willthrill81 wrote:
Wed Sep 19, 2018 10:45 am
livesoft wrote:
Wed Sep 19, 2018 10:39 am
Is is safe to say that "The majority of retirement-age Americans are retired" ?
According to the BLS, the groups with the largest projected increase in labor force participation are those age 65 and older.

The answer to the entire retirement savings problem is simple: work until you die. I wouldn't call that 'easy' though.
It is much easier to increase a small number than a big one. Other groups are pretty close to maxed out (i.e. 16-24 is dropping because of college trends, we never go much higher than 70% for the 25-55 group) so it doesn't seem overly odd that that old people have the biggest increase. Unless people stop going to college/grad school in large numbers, I wouldn't expect this trend to change much.


There are a bunch of different stats sets out the that paint slightly different pictures. One thing to think about is how much retirement savings should the couple making 60k/year have? You are looking at something like 25-30k of SS at 66/67. You probably only need ~300k or so of assets to give you the same spending power as when working. If you figure savings is back loaded (i.e you spend 25-55 paying off the house and kids and don't actually start saving 15%+ until 50),you might need even less. That is the average american situation.


At lot of times we tend to think only about the top 20% ( a bit over the 100k) while ignoring the bottom 20% (<~25k). The problems each group faces is a bit different.

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Re: “Majority of working-age Americans have no retirement savings”

Post by international001 » Wed Sep 19, 2018 11:29 am

willthrill81 wrote:
Wed Sep 19, 2018 10:41 am
This was a relatively common situation in the U.S. in the not-so-distant past. My great-grandfather moved in with my grandparents with my mother was small and lived with them for five years before he passed away. It's relatively common in Europe today to have multiple adult generations living in the same domicile.
Which country are you talking about?
This was true perhaps 50 years ago
Nowadays has been quite the opposite because of the last crisis. Families going back with the parents because they had at least a retirement check

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Re: “Majority of working-age Americans have no retirement savings”

Post by FreeAtLast » Wed Sep 19, 2018 11:30 am

livesoft wrote:
Wed Sep 19, 2018 11:14 am
I, for one, am not wondering where all the poor retirees are. They are everywhere. I see them all the time.
In particular, I encounter them in multitudes at casinos and racetracks ( yes, I patronize such places, but at least I know that I can easily afford the losses that I may incur). 8-)
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Re: “Majority of working-age Americans have no retirement savings”

Post by Thesaints » Wed Sep 19, 2018 11:31 am

I’m sure a retired couple can live (i.e. survive) on 20k/yr. the problem is that when those couples make a large chunk of the population, consumer spending is depressed.

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Re: “Majority of working-age Americans have no retirement savings”

Post by mptfan » Wed Sep 19, 2018 11:32 am

AlohaJoe wrote:
Wed Sep 19, 2018 11:12 am
The median household in the 55-64 age bracket is around $50,000.
I'm not sure where that number comes from, the median household income is now $61,372.

https://www.thebalance.com/what-is-aver ... ry-3306189

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Re: “Majority of working-age Americans have no retirement savings”

Post by randomguy » Wed Sep 19, 2018 11:33 am

Maverick3320 wrote:
Wed Sep 19, 2018 11:25 am
willthrill81 wrote:
Wed Sep 19, 2018 10:49 am
Sasquatch wrote:
Wed Sep 19, 2018 10:46 am
livesoft wrote:
Wed Sep 19, 2018 10:22 am
So where do all these retired people that I see all over the US come from? I suspect people do not tell pollsters the truth about their savings.
+1

Why in the world would I want to reveal my financial status to a government agency?
You don't have to. Since all of your bank and investment accounts are linked to your Social Security number, they can easily determine the level of assets you have with a few keystrokes.
Then why do we spend so much time doing taxes?
Because H&R and intuit want you to to pay to file taxes:) OK that is a bit of simplification. https://www.forbes.com/sites/joshbarro/ ... ca03382fb6 suggests that having you file a form is a way of error checking.

What is crazy is that we don't have some needed tax data (i.e. see foreign tax credit data) on the forms for easy import.

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Re: “Majority of working-age Americans have no retirement savings”

Post by djpeteski » Wed Sep 19, 2018 11:39 am

HEDGEFUNDIE wrote:
Wed Sep 19, 2018 10:17 am
The median retirement account balance among working-age Americans is zero, according to a research report by the National Institute on Retirement Security, a non-profit research group based in Washington.
...
The report found about 80% of working Americans have less than one year's income saved in retirement accounts. "Also, 77% of Americans fall short of conservative retirement savings targets for their age based on working until age 67, even after counting an individual's entire net worth — a generous measure of retirement savings," the news release said.

The NIRS report noted that even among retirement account savers, the typical worker had a balance of just $40,000.
...
Its weird how so many working age American have really nice cars. What if they saved 250 every month, drove a used corolla with a car payment half of the average one? They would have a healthy amount to retire on. Its all behaviorally based.

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Re: “Majority of working-age Americans have no retirement savings”

Post by Calico » Wed Sep 19, 2018 11:40 am

So many here are talking about people who are currently retired having money, but the article says, "working age" people (meaning those not retired). Those retired are not who was asked and aren't the subject.

I look around where I work and I know that most people here don't participate in the 401k. So it doesn't surprise me to read that people aren't saving for retirement.

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Re: “Majority of working-age Americans have no retirement savings”

Post by Grt2bOutdoors » Wed Sep 19, 2018 11:44 am

SevenBridgesRoad wrote:
Wed Sep 19, 2018 11:20 am
It's often interesting to look behind the curtain at the organizations publishing such information. A quick glance at the National Institute on Retirement Security shows they are a Washington D.C. lobbying group funded mostly by state government retirement systems. I would view their published study results with an understanding they may have an agenda.
I don't believe pointing out the obvious is some organization having an agenda. They are using real data to point it out.
I am not retired, still employed, those I work with, many of them do not save for retirement, they have not won a lottery or expect any sort of inheritance. They are not eligible for any sort of defined pension other than Social Security. As one point of reference, and I have not yet read the NIRS report yet, I would say they are not too far off the mark with their conclusion. There will be a lot of potential ways this can go down the road. I want to be optimistic but its difficult when folks have a hard time saving even 1% in a deferred retirement plan, at least as an initial start.
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Re: “Majority of working-age Americans have no retirement savings”

Post by Jags4186 » Wed Sep 19, 2018 12:13 pm

willthrill81 wrote:
Wed Sep 19, 2018 10:25 am
livesoft wrote:
Wed Sep 19, 2018 10:22 am
So where do all these retired people that I see all over the US come from? I suspect people do not tell pollsters the truth about their savings.
Some of the data are objective, such as average 401k balances.

Actually, most people are likely to overstate their savings in surveys.
401k balance is a really worthless metric IMO. Most people switch jobs often these days. Unless your rolling your 401k into your new 401k your balance will be low. I only have $25,000 in my 401k and $270,000 in an IRA that I rolled over from a former 401k.

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Re: “Majority of working-age Americans have no retirement savings”

Post by bottlecap » Wed Sep 19, 2018 12:17 pm

Everyone was trolled by a naked link with no comment or follow up.

Well done.

JT

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Re: “Majority of working-age Americans have no retirement savings”

Post by Sasquatch » Wed Sep 19, 2018 12:20 pm

AlohaJoe wrote:
Wed Sep 19, 2018 11:15 am
Sasquatch wrote:
Wed Sep 19, 2018 10:46 am
Why in the world would I want to reveal my financial status to a government agency?
There's no government agency involved in this story. Why do you think there is?
Data came from US Census Bureau according to article.

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Re: “Majority of working-age Americans have no retirement savings”

Post by greg24 » Wed Sep 19, 2018 12:25 pm

willthrill81 wrote:
Wed Sep 19, 2018 10:49 am
You don't have to. Since all of your bank and investment accounts are linked to your Social Security number, they can easily determine the level of assets you have with a few keystrokes.
Do you believe that all your financial accounts are aggregated in some central government database?

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SevenBridgesRoad
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Re: “Majority of working-age Americans have no retirement savings”

Post by SevenBridgesRoad » Wed Sep 19, 2018 12:34 pm

Grt2bOutdoors wrote:
Wed Sep 19, 2018 11:44 am
SevenBridgesRoad wrote:
Wed Sep 19, 2018 11:20 am
It's often interesting to look behind the curtain at the organizations publishing such information. A quick glance at the National Institute on Retirement Security shows they are a Washington D.C. lobbying group funded mostly by state government retirement systems. I would view their published study results with an understanding they may have an agenda.
I don't believe pointing out the obvious is some organization having an agenda. They are using real data to point it out.
I am not retired, still employed, those I work with, many of them do not save for retirement, they have not won a lottery or expect any sort of inheritance. They are not eligible for any sort of defined pension other than Social Security. As one point of reference, and I have not yet read the NIRS report yet, I would say they are not too far off the mark with their conclusion. There will be a lot of potential ways this can go down the road. I want to be optimistic but its difficult when folks have a hard time saving even 1% in a deferred retirement plan, at least as an initial start.
But of course they have a agenda. That doesn't make it good or bad necessarily. In reading the actual report, their agenda...i.e. conclusions in the report... (again, I'm not saying this is bad or good) is to promote changes to Social Security, changes to regs around defined benefit plans, and policy changes to alter the course of "wealth inequality", amongst other policy changes. We'd have to know what they are driving for as they lobby our Congressmen to know if what they are advocating is something we agree with or not. But, I believe their mission may lead them to find data that promotes their mission. For example, actually quoting from the report, "Seeking to provide a better understanding of typical working class employees, this report is based on an analysis of the U.S. Census Bureau’s Survey of Income and Program Participation (SIPP) which oversamples lower income individuals as parts of households and provides detailed background on participants." They are saying they oversampled a portion of the population on purpose. You may or may not agree with that methodology. But it does steer results (one definition of bias) toward their agenda.

Directionally, I agree, they are right about Americans not being financially ready for retirement. Their data however makes it look even worse than it is, which promotes their agenda. That may or may not be important to you. I just like to understand where people are coming from.
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Re: “Majority of working-age Americans have no retirement savings”

Post by nisiprius » Wed Sep 19, 2018 12:37 pm

Maverick3320 wrote:
Wed Sep 19, 2018 11:25 am
willthrill81 wrote:
Wed Sep 19, 2018 10:49 am
Sasquatch wrote:
Wed Sep 19, 2018 10:46 am
livesoft wrote:
Wed Sep 19, 2018 10:22 am
So where do all these retired people that I see all over the US come from? I suspect people do not tell pollsters the truth about their savings.
+1

Why in the world would I want to reveal my financial status to a government agency?
You don't have to. Since all of your bank and investment accounts are linked to your Social Security number, they can easily determine the level of assets you have with a few keystrokes.
Then why do we spend so much time doing taxes?
Because of lobbying by the tax-prep industry. I've read that the IRS has enough information to calculate taxes for something like half of all tax payers with no need for filing at all. Why send them a "postcard?" They could send you the postcard, saying "your taxes are thus-and-such. Call 800-###-#### and press 1 to pay."
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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