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Most people haven’t saved enough for retirement – Business Insider

Aren’t you sick of hearing about all this? Me too. It’s like affordable health care, blah, blah, blah ‼️

If Americans have all these concerns and fears about the future, why don’t they do something about it? And yes, there are things that can be done both on the individual and national level, but they take effort, some sacrifice and for many who profess to fear the future, a change in life-style. Here’s a clue; some of the things you think you an afford to do  now; you can’t‼️

Let’s say you earn $100,000 a year. That’s a good income, right? Now let’s say you are going to retire in seven years and you want to maintain your current lifestyle; travel, spending on grandkids, a new car every few years, the works. To do that you need close to 100% income replacement. After considering what Social Security will provide, how much to do you need in investments to make up the difference assuming you withdraw 4% a year? 

You need about $1,700,000 and that does not consider dealing with future inflation or the need for a separate emergency fund. 😰

Americans aren’t saving enough for retirement. One-third of all adults have zero retirement savings, and 23% have less than $10,000 tucked away, according to a new study by Merrill Lynch and Age Wave on retirement savings. The study surveyed nearly 5,000 people across the country age 25 and older.

Naturally, many people are concerned they’ll face economic strain after they exit the workforce. Americans don’t necessarily aim to be rich in retirement, but rather they want security and the ability to live comfortably without fear of running out of money.

While 88% of people aspire to save enough to have financial peace of mind, only 12% say they want to accumulate as much wealth as possible, the study reports.

Americans share three big concerns about threats to their retirement savings: 

😷 an expensive health issue impacting themselves or a loved one, 

🤑 inflation making it more expensive to afford basic living costs, and 

🌈 the fear of not having enough money to do all the things they want to do.

Source: Merrill Lynch study: Most people haven’t saved enough for retirement – Business Insider


7 replies »

  1. I am amazed that 50 percent of workers make less than $30,000 per year. In the high priced economy of 2017 how are these workers going to save $510,000 for retirement. Answer they are not going to be able to save anything close to what they will need to live above poverty.
    I have not purchased a new car since 1981. I buy used cars, appliances, and anything else that I can find at 50% or more savings over new. Anything that is new, I only buy it on sale, at the cheapest price I can find. I used an old 27 inch CRT TV until 2014, that I paid $50 for at a pawn shop in 2002. The 43 inch HDTV that I purchased was on sale for $269, and I will not be buying another TV until it stops working. I cut cable TV in 2014, saving $60 per month.
    I have lived my 61 years making less than $35,000 per year, many years a lot less. I will be doing great when I start getting SS in Feb 2018, debt free and $1,000 covers my lot rent, utilities, insurance and includes $300 for food per month. My 1983 mobile home has been paid for since 2010. Living large in MT is cheap compared to NY or CA.


    • I have been wondering how my son is going to retire for the same reasons you stated. He is currently in the Army National Guard and every time he gets his civilian career started he gets deployed again. He’ll get a small army pension but nothing like serving for 20-30 years. I am sure that he will have to work until 67 or longer. With one boy and a girl on the way, opportunity to save large sums of money is not there at this time. I also think that they bought too much house for what he can make in his civilian career because they based it on his tax free deployment income at the time. But he will not listen to me, I don’t know what I am talking about, but I am going to semi-retire at age 55.

      From what you retirees tell me the cost of Medicare and Medicare part D, a couple will need about $250K saved just to pay for medical at a 4% withdraw (today’s dollars). Social Security might cover food and some housing costs if you are lucky.


      • dwayne – My policy is do more with less less and less income. My income has increased 60% in the last 20 years. Lot rent up 87% Food up 100% to 200% depending what you are buying.
        Car prices up 150%. I know people who now have property tax bills on their homes that are almost as much as the mortgage payment was per month. You are going to have to lead the younger folks by example. Drive that paid off car for at least 5 years after pay off. buy used everything to save money, The biggest thing is zero debt except maybe a small mortgage that will be zero within 5 years or less of retirement. . Also, save save save until it hurts.


      • JRATT1956 – I totally agree. My “newest” car is a 2012 and my oldest is 2005. Three years ago I moved to a town with cheaper property taxes. My old house, when I left, my property taxes and insurance did equal the original total mortgage payment. Everybody thinks they are smarter than me. It took me 32 years to convince my wife that paying off our mortgage and not to carry a credit card balance was the right thing to do. Now she can’t wait until I stop working this year.

        I can believe the number of people that I work with that leave money on the table by not putting money into our 401K to get the company match. Where else can you get a 50% return for the first year?


  2. I am always amazed at people who buy a new car when they retire and then move into a new house with a mortgage payment. Getting rid of those payments just frees up so much cash and depending on your mortgage payments to income ratio allows you to retire with an income maybe 20-40% less.


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