Shocking indeed. in fact it’s hard to believe. I tend to take survey results with a grain of salt, but the consistent results on this topic clearly indicate saving for retirement is not what it should be.
For most people with an average income or above the stumbling block to saving is not income, but spending. If we could just save first and then establish our standard of living and spending based on what remains of our income, many money problems would disappear.
Millions of high earners are still struggling to save enough According to the New School, a shocking 27% of workers with incomes above the Social Security wage base limit have no retirement savings. The wage base limit is $137,700 in 2020, so that means over a quarter of workers earning six figures haven’t been able to invest any money for the future.
…among workers with incomes above $137,700 who do have retirement investments, the average amount they’re projected to have by age 65 is only $252,000.
Saving for retirement is a challenge for everyone. If your income isn’t above $137,700, you may have a hard time feeling sorry for those who earn so much but still can’t save.
The reality is, however, that people who earn income above the Social Security wage base limit can still struggle to make ends meet. Many live in high cost-of-living areas as jobs that provide these higher wages are often concentrated there.
It’s also a natural human instinct to increase spending as income rises. Often, by the time people realize they’re getting in over their heads, they’ve committed to obligations it’s difficult to eliminate.