CNN: 43% have less than $10k for retirement

[Elessar78]

What are your chosen paths, twa? I'm just curious because at some point I want to diversify and would like, well, a diversity of opinion.

[helptheSKINS]

I made that comment as well.and still have not seen a answer on exactly what parameters these studies use

Investments are just that,and not limited to retirement unless it is in a specified plan.

I certainly agree you need to prepare for the future,yet dedicated retirement savings accounts are not the only way....some of us prefer different paths.

My point is instead of realizing that the vast majority of people 45 and older have not saved properly, there is nitpicking about what the article is saying. I think saying “retirement savings” is pretty self explanatory. Of course there are other types of investments such as owning additional homes to be used as income (sell or rent out). The reality is that most of these people do not have that. It appears to me that many people on this thread are more interested in making excuses for the lack of saving rather than admitting there’s a huge problem that will affect us all. It is a given that I will pay for the irresponsible lack of savings from the 45 and older crowd. It won’t just be me, it will be my generation and the generations to follow. In fact, it will even affect them when even more money is taken out of their SS check.

I missed out on 8 years of saving because I racked up credit card debt and wasted my money in college and my early 20’s. It took 5 years to pay it off. My rant about the 45 and older crowd is they will be racking up debt that they will not have to pay for. They will go into retirement with very little to live off of. They will be dependent on social security, medicare and other govt support programs. As more and more become dependent, there will be no choice but to raise taxes to support them. Hence, younger generations will not be able to save as much as they need because they are paying off the debt of others.

Looks like you are 49, I am by means trying to imply you are guilty of not saving or making sure you are self sufficient during retirement. My point is about the overall group that clearly put themselves first by choosing not to save. Another important stat in that article is 50% of the people 45 or older have never tried to calculate how much money they will need in retirement. Saying these same people are investing in other income drivers like additional homes doesn’t make sense. Most people that have the foresight to purchase additional homes for income are well aware of what they will need to support themselves during retirement.

One last thing. We’ve seen others on this thread say “start saving when you are young”, that is the best thing to get out of this thread. I hope the young Skins fans here take that to heart. Even if you can only put 3% away, do it. You will thank yourself down the road and earn some self-respect immediately. After a few paychecks, you won’t even notice you’re doing it (except when you check your savings/investment balance):point2sky

[zCommander]

This right here is the answer. Kids entering the workforce should be taught the importance of preparing for the future.

They do. Clothes, shoes, jewelry, cell phone and pocket money - For tomorrow's night outing.

[Goskinz0721]

Here's some examples:

They saw their parents house grow in value many times over: So what you are saying is since they "thought" they could live off their equity there was no reason to save? I think that my house will grow in value, I put as much away as possible. Can I stop putting money away since I think my equity will grow. If it turns out that it doesn’t does that give me the right to take someone elses money (through taxes) to pay for my bad judgement?

Their 401k was hit hard by the economy: This is absurd. Look back at the figures I provided about what people 45 and older have put away. They have so little that it really doesn’t make that much of a difference. So instead of saving $40,000 for retirement they have $30,000. Either way they are screwed because they have nowhere near what they need due to their horrible judgment. I’ll say it again, THE S&P 500 has returned a 11.2% return over the last 20 years which includes the latest recession. Blaming even 4 or 5 bad years for 20 + years of being irresponsible is nothing more than an excuse. If these people saved as they should have, a recession would have been a bump in the road and nothing more.

What about their pensions: Pensions did not affect their income. This is money set aside by the company they worked for. This is another example of someone giving a company or the govt control over their lives. Pensions should have been seen as a tool to add to the quality of their retirement. Many companies that promised pensions also gave annual bonuses. What happened to those bonuses? Saying hindsight is 20/20 is nothing more than BS. 10’s of millions of Americans CHOSE not to save. All I need to do is point you to the pathetic savings figures I posted. I’ll put them below for all of you to see again. I’m hoping at some point it hit’s home.

Okay, since these 2 seem to be directed at me, allow me to retort.

I haven’t read this entire thread, so I don’t know how far above the age of 45 these statistics apply. But I’ll assume we’re talking 45-65 years old. I’m also going to assume that the older age bracket here (say, ~58 – 65) are skewing these numbers to the lower end. That is, this age group as a whole, has saved very little for retirement. Let’s consider a few things here:

1. This older age group was the start of the boomers. A great majority of these people worked for companies that provided pensions (be it private sector or the government). That includes both blue collar & white collar workers.

2. The prevailing thought in the 1950’s – 1970’s was that buying a house, paying it off and working for a company for 40 years would guarantee you a decent retirement.

3. There was no internet, on-line trading, quick access to financial information for people to use a basis for investing. Put whatever extra money you had in the bank (where it was insured by the FDIC) and let it grow at whatever percent was being paid. Or buy a US Savings bond through payroll deduction (how many people less than 45 years old have ever heard of that!)

4. Social Security would be there to supplement your pension.

Housing: This, singularly, is not the reason people in this age group didn’t save. It’s the other factors that contributed to having the mindset that your home could be used for retirement. If nothing else, the house would be paid off and there would be little (if any) cost to maintain it in retirement.

Pensions: Correct, it didn’t affect their income. But guess what it did affect? Peoples reason to believe they needed some other form of savings to secure a decent financial future in their retirement. The prevailing thought was the company you worked for was going to take care of you in retirement.

401k: These weren’t available until 1980. This was an answer to the large number of companies that folded and the corporate changes that pensions would not be provided that we began to see in the 1970’s. Also during the '70s there was a large number of people that were unemployed(due to several factors: businesses began to move overseas, large influx of imports and the return of the Vietnam Veterans to the work force). Factor in high inflation during the 1970s and you had many people with very little to put away as savings.

Pay rate: Do you have any idea what the minimum wage was in 1980? Try $3.65 an hour. Inflated to today’s dollar, that’s $1.25 an hour. And remember, most people during this era only had 1 wage earner in the family. It was rare, indeed, to have a mother working outside the home before the early 1980's.

Just like there’s a difference in the mindset of the Greatest Generation and the Baby Boomers, there’s a significant difference in the mindset of the Baby Boomers and whatever the other group(s) are called. Socially, politically and financially. But one thing they do have in common, they are all influenced by the times they live in.

Is it sad there are people >45 with less than $100k saved? Yes it is. But hindsight is always 20/20.

[Bliz]

I am honestly shocked by all the excuses being made in this thread. Many of them coming from the younger people that will be the ones paying for these mistakes. Just the responses from pages 11 and 12 alone are crazy to me. Bliz, your comment about what retirement savings are is nothing more than trying to confuse the conversation. Did you really just say "current investments are not retirement savings"? What are they exactly? Investments for when you're 42? You are making my argument for me (not just you Bliz, many on this thread). Here's some examples:

Absolutely plenty of current investments are not retirement savings, not in my mind, and since the article does not provide the methodology, very possibly not as far as this article is concerned either. A lot of investments are multi-purpose. You say it jokingly, but yeah, I do have some investments for when I'm 42. Maybe I use it to hire a contractor to fix up my backyard or replace my roof, buy a new car when I need one, pay for my kid's braces, or just so I have it in a liquid account so I have access to it in case of an emergency. I don't intend to spend it all, but if someone asked me how much I have saved up for retirement, my answer would be the value of my 401k and that's it. But the total value of all of my savings is twice that much.

My point is to question the underlying assumptions of the study, not to make excuses for people (though I will acknowledge I did some of that earlier in the thread...). You're clearly very angry about how irresponsible the baby boomers are for their lack of savings, I'm saying what if that supposed lack of savings is an illusion? The amount of financial laziness may be vastly overstated, depending on how they interpret the statistics. But if the statistics are accurate and not manipulating what's a "retirement savings"? Yeah, extremely pathetic, and a lot of them will be burdening their kids for decades to come, making it harder for those people to save more for their own retirement...

[Goskinz0721]

It appears to me that many people on this thread are more interested in making excuses for the lack of saving rather than admitting there’s a huge problem that will affect us all.

I'm not making excuses. I'm trying to explain to you how this could have or why it has happened.

It is a given that I will pay for the irresponsible lack of savings from the 45 and older crowd. It won’t just be me, it will be my generation and the generations to follow. In fact, it will even affect them when even more money is taken out of their SS check.

Now this is funny. You apparently think that the SS rate I was paying in 1971 is the same rate that I pay today, don't you? And I guess you also think the salary limits (now around $98k per year) where you are excused from paying SS have always been that high, don't you?

Well, guess what? They aren't.

And, yeah, I'm paying for the irresponsible lack of savings that the Greatest Generation had because their lazy asses were off in Guam, Iwo Jima and Normandy instead of saving money working a cushy jobso they could have enough money for retirement. Maybe if their lazy asses had gone to college they would've been able to get better paying jobs when they got home and I wouldn't be in this predicament

[helptheSKINS]

I'm not making excuses. I'm trying to explain to you how this could have or why it has happened.

Now this is funny. You apparently think that the SS rate I was paying in 1971 is the same rate that I pay today, don't you? And I guess you also think the salary limits (now around $98k per year) where you are excused from paying SS have always been that high, don't you?

Well, guess what? They aren't.

And, yeah, I'm paying for the irresponsible lack of savings that the Greatest Generation had because their lazy asses were off in Guam, Iwo Jima and Normandy instead of saving money working a cushy jobso they could have enough money for retirement. Maybe if their lazy asses had gone to college they would've been able to get better paying jobs when they got home and I wouldn't be in this predicament

It looks like I offended you, didn't mean to. I'm very aware of how SS works. I know that FICA taxes will be going up, most likely by a lot. At the same time the age limits will rise and the benefits will fall. The reason falls directly on those that failed to ensure they could take care of themselves. Choosing instead to depend on govt programs.

I agree with you that those that fought in WWII are the greatest generation. It's their children that are the problem. The baby boomers were born yet or toddlers during world war II.I'm not sure what you're getting at with that second paragraph.

[helptheSKINS]

Absolutely plenty of current investments are not retirement savings, not in my mind, and since the article does not provide the methodology, very possibly not as far as this article is concerned either. A lot of investments are multi-purpose. You say it jokingly, but yeah, I do have some investments for when I'm 42. Maybe I use it to hire a contractor to fix up my backyard or replace my roof, buy a new car when I need one, pay for my kid's braces, or just so I have it in a liquid account so I have access to it in case of an emergency. I don't intend to spend it all, but if someone asked me how much I have saved up for retirement, my answer would be the value of my 401k and that's it. But the total value of all of my savings is twice that much.

My point is to question the underlying assumptions of the study, not to make excuses for people (though I will acknowledge I did some of that earlier in the thread...). You're clearly very angry about how irresponsible the baby boomers are for their lack of savings, I'm saying what if that supposed lack of savings is an illusion? The amount of financial laziness may be vastly overstated, depending on how they interpret the statistics. But if the statistics are accurate and not manipulating what's a "retirement savings"? Yeah, extremely pathetic, and a lot of them will be burdening their kids for decades to come, making it harder for those people to save more for their own retirement...

I know the savings shortfall is not an illusion. My first job out of college was as an insurance agent. I sold insurance and had a series 6 so I could sell some investments. You would be shocked by the percentage of people I met with in the age group we're discussing that had done nothing. They all wanted to know how they could get their $20k in retirement up to the large number they needed to support themselves. Again, most of them had beautiful houses (with big mortgages), two new cars, expensive furniture, ect.... I actually quit the business because I couldn't take the lack of people wanting to make a change. The same people that were panicked when we met would tell me ask me the next day to call back in a year and they'll act then. A year later, same old story.

As I've said, there are some that simply got a raw deal. For the majority, the chose not to save. Saying wages were different or other factors were the reason is just an excuse.

[Goskinz0721]

I agree with you that those that fought in WWII are the greatest generation. It's their children that are the problem. The baby boomers were born yet or toddlers during world war II.I'm not sure what you're getting at with that second paragraph.

Here's what I'm getting at: you're complaining that you are going to have to support the baby boomers through higher taxes (FICA) because they were wrong in not saving & preparing for their retirement. I'm currently doing the same for the Greatest Generation through my ever increasing FICA taxes that have been rising since I first started working ~1969. The rise in FICA can be attributed to this age group, as boomers (born post-WWII) wouldn't be near the age of retirement until 2004-5 at the earliest (at age ~59).

As I said before, yeah, it's sad people are in this financial situation. But there are so many social & economic reasons for this that to say "they should have known better and saved more money" falls far too short of what actually occurred to those over 45 years of age.