The Average American Family

[b4freedom]

I stumbled on this and I thought that I would share.

http://c1334262.cdn.cloudfiles.rackspacecloud.com/average-american-family.jpg

[disneysteve]

Incredible - and sad. I don't even know where to start in commenting on these stats. This country is in a lot of trouble.

[cschin4]

I sometimes wonder if we really are expecting too much. How much did your parents really have or have saved for retiremet? HOw much did previous generations have? Now if you dont' have a million dollars you are a slacker. My parents were millionaires. They didnt have 401Ks, etc. Many families cannot save up the entire costs of retirement, college, weddings and all the other things parents are now expected to pay for and have.

[cschin4]

I meant, my parents were not millionaires and far from it. I grew up in a little town in a little house. We had about as much as other people had. I think if we all just embraced a simpler lifestyle, we would all be happier. I could be making alot more money and working alot more. I choose to downsize and stay home more with my children. As a result, i will probably have alot less in retirement.

[Snodog]

No surprise here with the average family only making 43k how do you expect them to save anything meaningful?

Our expenses run about 43k and we could trim maybe about 5 or 6k relatively painlessly (wife may disagree ) and to trim more would mean taking DRASTIC steps. And our house payments are only $360/month and that is our only debt.

We are fortunate too make more than average but I often wonder what we would do if we had to live on <40k. Thats why where saving like crazy now while we can.

[creditcardfree]

Our family was making under $50k just four short years ago. We kept debt to a minimum, saved for retirement and lived below our means. However, we have made great strides in the last four years as our income has nearly doubled. Income does make a difference.

However, I would guess most of these statistics just point to the fact that the majority of Americans are not living below their means.

[maat55]

This is the results of social security, unemployment and welfare.

[disneysteve]

I grew up in a little town in a little house. We had about as much as other people had. I think if we all just embraced a simpler lifestyle, we would all be happier.

I agree. I grew up in a row home in Philadelphia, a very modest 3-bedroom with a tiny "postage stamp" lawn and a 1-car garage that was too small to actually put a car into (besides, it was filled with our stuff because the house didn't have a ton of storage space. The average new home today is 2-3 times the size of new homes in 1970 and probably close to 4 times that of homes in 1950 - and the average family is actually a lot smaller.

I sometimes wonder if we really are expecting too much. How much did your parents really have or have saved for retiremet? HOw much did previous generations have? Now if you dont' have a million dollars you are a slacker. Many families cannot save up the entire costs of retirement, college, weddings and all the other things parents are now expected to pay for and have.

There are a few factors at play here. Previous generations were more likely to spend the bulk of their careers with one major employer and get a decent pension when they retired. Neither is true today. Employees are largely or entirely responsible for their own retirement planning. Personally, I have no employer-sponsored plan. All I get when I retire is what I'm able to save during my working years. Another big factor is that people are living a lot longer today. A few decades ago, if you retired at 65, you were probably dead by 70 or so. Today, there is a good chance you will live into your 90s so a much bigger retirement stash is needed.

A million dollars isn't what it used to be. Invested decently, that will provide an annual income of $40,000 in retirement which is $10,000 less than the median income today. Of course, social security gets added on to that, but still, it isn't a ton of money at a point in life when you may have higher medical costs, need more help around the house, etc.

Your point about what families are "expected" to pay for today is right on target. That is the biggest problem. People think they need to pay 100% for college, throw lavish weddings, furnish their homes with designer stuff and have all of the other luxuries and amenities that they see on HGTV. That's the real problem. My parents helped with college and med school but I still came out with over 100K in loans. Had they paid more of my costs, my mom would probably be struggling now. Instead, they helped as much as they could while still saving for retirement and now my mom is living comfortably on what she and my dad put away over the years. How many parents today, including many who post here, put paying for college ahead of saving for their own retirement? My wife has a co-worker who had planned to take a home equity loan to pay for their son's Bar Mitzvah reception. When the time came to do that, the housing market had crashed and they no longer had enough equity to do so, so they took out a personal loan instead. It never occurred to them to have a celebration that they could actually afford. I've said many times that people have simply forgotten how to distinguish wants from needs.

I would guess most of these statistics just point to the fact that the majority of Americans are not living below their means.

BINGO! That's the problem in a nutshell.

[Ima saver]

Heck, I always had a savings account. I was taught to always put something in my savings account when any money came my way. As soon as I started work (at age 12), I socked away as much as I could. I still do that. There is no reason why people don't have some kind of savings. I have friends who have no savings, but they (and their children) have all the new "toys and gadgets" that I don't have. (or want)

[GREENBACK]

I sometimes wonder if we really are expecting too much. How much did your parents really have or have saved for retiremet? HOw much did previous generations have? Now if you dont' have a million dollars you are a slacker. My parents were millionaires. They didnt have 401Ks, etc. Many families cannot save up the entire costs of retirement, college, weddings and all the other things parents are now expected to pay for and have.

My parents we very financially conservative. They made little money early on with three kids to raise. Still, I remember my parents talking about their savings bonds and savings accounts. I understood little of what they were talking about then. They did fine after all was said and done.

I think they passed some of that on to me.

[terces]

Too many don't learn to pay themselves first. Mom and Dad taught us growing up to put something in savings every month. They weren't rich by any means, survived Dad being laid off and having heart surgery. Shoot just recently she told me they were down to their last penny through all that when I was a teen. I knew money was tight then... but not that tight. But even through that they were able to pay off their house and have a comfortable retirement.

Too many just spend and spend for their wants.

Seeing that article makes me feel better at what we do have. But I know we are still behind in our retirement savings and really am trying to "catch-up" now.

[b4freedom]

This is the results of social security, unemployment and welfare.

How is the the result of ss, unemployment insurance, and/or welfare?

[maat55]

How is the the result of ss, unemployment insurance, and/or welfare?

Safety nets take the motivation out of personal responsibility.

[jIM_Ohio]

be careful with averages...
who is included?

all citizens- well of course the X million high school kids make under 43k per year
all tax payers? the difference between AVERAGE and median incomes is staggering (the really high earners tip the scale)


I don't invest because of what other people do, what the average person does, or what the government does (or does not) do. I do it because that is how I choose to live my life.

In this forum or another one, someone posted that "the average college savings is $4300".

If 9 people don't save a penny, and the 10th saves $43,000... the average person in that group is saving $4300. The average is not what should be focused on in that particular sample.

[disneysteve]

You're right, Jim. I was just helping my daughter with math homework illustrating that exact point. We were working with mean, median and mode and discussing the differences between them and how each one may or may not give an accurate picture of the data.