... [M]ore than half the middle class (59%) are very clear that their top day-to-day financial concern is “paying the monthly bills,” an increase from 52% in 2012. Saving for retirement ranks a distant second place, with 13% calling it a “priority,” as four in ten middle class Americans (42%) say saving and paying the bills is “not possible.” As a result, 48% are not confident they will be able to save enough for a comfortable retirement, and 34% of the middle class say they will work until they are “at least 80” because they will not have saved enough for retirement, up from 25% in 2011 and 30% in 2012. These results come from the latest annual Wells Fargo (NYSE: WFC) Middle Class Retirement study(PDF*), a telephone survey conducted by Harris Interactive of 1,000 middle class Americans between the ages of 25 and 75 and interviewed July 24 to August 27, 2013. ...
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Nov 3, 2013
Save For Retirement -- Yeah, Right
From a press release:
And yet the anti SS crowd continues to claim that if SS was done away with, people would all save for their retirement on their own and end up with more money.
ReplyDeleteIt won't happen. Proof is how few take advantage of the currently available tax advantaged/deferred retirement plans that already exist.
Without SS, millions would end up with nothing at all in retirement. SS may not be enough, but it is better than nothing at all.
I consistently see claimants in the field office lamenting that they did not plan for retirement. Many are dissatisfied with their retirement benefit amount because they will be unable to live on it. In my head I think it was never meant to be your sole source of income in retirement. I feel for these individuals as I think there needs to be more financial literacy education in our society. I also feel fortunate that as a federal worker I will likely have a good retirement in the future due to the benefit package of ss benefit, thrift savings plan, and fers pension.
ReplyDeleteThe concept from the right about privatizing ss and giving individuals more control over their own money is a wonderful idea, if we lived in a utopian society. I do not have confidence that the average American would be successful at doing this. SS should be expanded if anything. We should incrementally raise the fica tax and remove the fica tax cap totally or raise it significantly. The standard of living for the elderly has improved so much since ss came into effect. However, with the decline in pensions over the decades we need to do more as a country to protect the elderly from once again falling into squalor at such fragile moments of their lives.
What amount of money does the average American need to "live comfortably" in retirement? If I'm not mistaken, the average Social Security benefit is about $1,100.00. So what is the amount people think it should be since it appears to be most retirees sole source of income.
ReplyDeleteI'm a frugal person. But it's seems more difficult to save on a small income. And banks are not paying much interest either. The american dream is over.
ReplyDeleteNo, it's just beginning. It's called socialism and everyone's "dream" is identical and under govt control.
DeleteI save a lot for retirement but I'm glad Social Security is there. There is no way to determine how much to save. How long will I be able to work? How long will I live? How much will my savings earn? How much will medical care (and assisted living) cost me in retirement? I have no idea. Social Security at least provides some stability. It also keeps a whole lot of people out of poverty.
ReplyDeleteI wonder what percentage of the people who think that it is "impossible" to pay monthly bills and save for retirement have cell phones and cable TV.
ReplyDeleteSure, those things are nice to have, but if saving for retirement were really a priority, I think it would be pretty simple to cut those types of things out.
Agreed. America is so caught up in "status" rather than substance. I've been guilty as well at times. Cable tv, cell phones and Internet are NOT priorities over saving -- but they are for a large population.
DeleteI'm torn on this as well. After reading a piece about 401(k) participation in the USA Today a little while back, I came away with two feelings. First, corporate America has really screwed workers by doing away with pension. Competition, too much to afford, yada yada yada--most of these employers could afford some sort of pension. The "pot of money" american business has is largely the same as it ever was--these companies have chosen to use more money towards share value, dividends, cash on hand, and executive compensation.
ReplyDeleteBut on the other hand I was mad at Americans. The USA Today article showed that nearly a third (I believe it was right at 30%) of American workers whose employer offered a 401(k) didn't even bother to open one. I know the 401(k) is a crappy product--it siphons wealth from the masses to the financial elite, it is very susceptible to market crashes (caused by those same financial elite), it can be pretty easily gotten to for current expenses (this is good and bad for the worker), and most importantly it is not a defined benefit. I get that. But for these workers, it is their only employer-given retirement financial vehicle. We can fight for the return of the pension, and I am all for that fight. But if all you have right now is a 401(k), to not even use it...especially when many employers at least match some, you're leaving money on the table.
I know that saving is difficult for low income workers, I know the 401(k) is difficult to understand and a poor retirement vehicle, but how paternalistic do we have to be? Do we really as a society have to take care of workers' retirement completely--such that they do not have to save, plan, or do anything significant themselves--in order for people to have a decent retirement?
I usually consider myself at odds with the independent, libertarian, I built that, pick yourself by the bootstraps mentality, but whenever I hear folks talk about this retirement issue I find myself asking, "what happened to personal responsibility?"
Plus now how do you save after being forced to buy health insurance.
ReplyDeleteYou have to remember that most of the Baby Boomers atarted working when they were still promised pensions and retirement programs and then corporations took that away from them. I went to work For Eckards and had what looked like a pension for retirement at age 65, 2011 of about 2,000 - 2,500 dollars. This seemed like a good thing. Jack Eckerd went to washington, Stewart Turley took over and in an attempt to increase profits, he changed our retirement, increasing it by 10%. Sounded good, no? No!! If you retirement was now going to be 2,200 to 2750 per month, it was now going to be figured by off set of your Social Security retirement. Talk about being screwed. On another day, I will explain how he screwed us out of our stock option plan that had made soem employees rich. He explained he did this for our own good. Sound like someone else we know? Obama??
ReplyDelete