Announcement

Collapse
No announcement yet.

Americans outlive their savings: WEF

Collapse
X
  • Filter
  • Time
  • Show
Clear All
new posts

  • Americans outlive their savings: WEF

    From LinkedIn news. Americans outlive their savings: WEF

    Updated 13 hours ago

    American workers aren't financially prepared for retirement, with the average65-year-old saving enough to cover less than a decade of costs, according to a report by the World Economic Forum. That leaves the average U.S. man with a savings gap of 8.3 years, while women, who live longer, face a 10.9-year gap. The U.S. will have the world's largest savings shortfall at $137 trillion by 2050, the report found, as traditional pensions have largely been replaced by defined contribution plans that shift responsibility onto individuals.

    Link to report mentioned in news story.
    james.c.hendrickson@gmail.com
    202.468.6043

  • #2
    No big surprise there. About 23 percent of married retirees and 43 percent of single retirees count on their Social Security benefit for 90 percent or more of their monthly income. Those numbers will probably rise in the coming years.
    Steve

    * Despite the high cost of living, it remains very popular.
    * Why should I pay for my daughter's education when she already knows everything?
    * There are no shortcuts to anywhere worth going.

    Comment


    • #3
      If you look back to when the 401K system was created it was being cheered for personal ability to choose their own investments and portability.... then reality set in.

      We find many NOT contributing, not making good choices like rolling over but they cash out between jobs etc.
      I have personally seen people put off signing up for 401K for example because they were worried about picking wrong investment, (often phrased as limited or bad choices in plan) to once again blame the company instead of just choosing the best option available..

      Too many still think SS is the main source and any savings is a supplement instead of being the opposite. When I was in my 20s they said SS would be broke but it keeps limiting along on life support so many simply feel those prediction as " the sky is falling" fable.
      While the 401 system and IRA has been great vehicles for those like on this forum that have learned the best way to use these programs, but for many it is not being used.

      I heard a speech given about people who do not have a 401K plan saying they had ZERO way to save for retirement.
      I asked some at speech about if they had maximized an IRA or Roth and I heard crickets
      Many people WANT someone else to be in the END responsible if investments do not do well etc. Someone else to blame if things go bad. Many are wishing for "the good ole days" wanting pensions back, #1 for the fact the keep paying even after contributions run out. 401K made it clear that you reap what you sow, many do not want to see it was up to them and they dropped the ball.

      But that wish for the pension back never speaks to the reasons given of portability and personal choice that were touted as selling point of these plans.
      What happened to all those who selling points that pensions held people hostage to a job for 20-30 years. crickets

      It seems to be the American way to be sold a policy or plan only listening to the cheerleading.
      Later when you see the limits ( in this case the personal responsibility) become clear, you get a group telling people how fabulous (without mentioning any downside) the good ole pension system.

      Comment


      • #4
        ^And for all the reasons above is why privatizing social security would be just as bad for society, people wouldn't invest or save it, and then they'd have NOTHING!

        The problem is people don't get interested in saving for retirement until about 10 years away from it, and then it's too late!

        Nobody thinks they're ever going to get old and then when they do they're surprised.

        Comment


        • #5
          No real shocker here.

          No easy answer for this one. SS is still there, but it's starting to crack. I'm sure the system will be quite different when I start to draw on it.
          Brian

          Comment


          • #6
            Originally posted by Thrif-t View Post
            ^And for all the reasons above is why privatizing social security would be just as bad for society, people wouldn't invest or save it, and then they'd have NOTHING!

            The problem is people don't get interested in saving for retirement until about 10 years away from it, and then it's too late!

            Nobody thinks they're ever going to get old and then when they do they're surprised.
            that is probably the divide on the idea of wanting to privatize SS. For those whom KNOW they could grow their chunk and YES.
            For those who either do not want to do anything or those who would invest in some too good to be true scam NO

            the problem is messaging if you tell people you need some amount they see as unattainable ...you turn them off period. they give up
            if you tell people if you have not reached X amount by this age too bad you missed it. again a defeatist attitude that turns people off.

            we need to be positive about All savings even if it not up to some X amount.
            If we could convince people an EF and even small retirement savings were as IMPORTANT to society as that degree that landed so many in debt maybe a better percentage would be on a better foundation.


            I personally am witnessing this first hand living in a retirement area and seeing people struggling when the cost here is super low for the area. So many simply did nothing to save up even those who did well in previous jobs. I simply refuse to believe they did not see old age/ or retirement coming, I do not ever buy the " I did not know card".
            A neighbor told me she was making $34 an hour in the 1980s.YET she did not save or invest and is now living strictly on SS. Seems to me that was a decent income and she seems a frugal person. I would love to be able to ask "WHAT happened?" My best guess from pieces of conversations was she always assumed that company she worked for would include admin workers in the pension system their unionized manufacturing had. That did not happen.

            More and more people are moving out of the area as they have used up any money they had, many looking to children to help them. As much as I want to feel for them most were spending like they just won the lottery up to the point where they have ZERO options.
            Last edited by Smallsteps; 06-19-2019, 05:00 AM.

            Comment


            • #7
              All good points, Smallsteps. And this is really why auto-enrollment in 401k plans is such a great thing. Even though they start low, usually at about 3%, it's better than nothing. And auto-escalation is even better, increasing 1%/year or whatever, even though it still isn't nearly enough. But I've heard people bitch about the 3% thing saying they "can't afford" that and want to opt out. First, they don't realize that opting out will barely affect their take home pay since that 3% will be taxed. Second, everyone I've heard complain could easily afford it based on their lifestyle. The same people lease cars that don't fit their incomes, order out for lunch every day, and waste money a dozen other ways.
              Steve

              * Despite the high cost of living, it remains very popular.
              * Why should I pay for my daughter's education when she already knows everything?
              * There are no shortcuts to anywhere worth going.

              Comment

              Working...
              X