If you’re in your late 20’s or early 30’s and you haven’t seriously planned how to save for your retirement, you might want to forgo the latest cell phone or Apple gizmo. You’re probably going to need that money, and a lot more of it.
For the first time since the 1940’s, a majority of Americans will be financially worse off in their elderly years than their parents, according to a recent article in the Washington Post. The nation’s retirement savings deficit is rapidly approaching $7 trillion, according to data from the US Senate.
The Post article cites a new report by the Center for Retirement Research that mirrors similar findings at the New School for Social Research and the Heritage Foundation.
The news is particularly grim considering the troubled state of the US economy and the difficulty both Democrats and Republicans are having solving the problem. The temptation to blame US workers for not saving enough is hard to resist for some political leaders, but that doesn’t reflect the facts.
Many aging Americans did plan for retirement, but the Great Recession wiped out 40 percent of Americans’ personal wealth. And many have found themselves unemployed for long periods of time, which required spending much or all of what they saved for retirement.
But the situation doesn’t bode well for younger workers, either. More than 50 percent of workers 30 and older aren’t planning for a time when they won’t be full-time earners.
“Problems for future retirees seem to be closing in from all sides,” according to the Post. Half of American workers have no retirement plans through their jobs, and those that do are not contributing enough to their plans.
And politicians who favor austerity strategies to reduce the long-term debt have their eyes focused on federal programs like Medicare and Medicaid for cuts. Those reductions are typically proposed to kick in 10 to 20 years from now, greatly impacting today’s younger workers.
This article appears in Feb 20-26, 2013.
No one has any money, that’s the problem. Partly it is otherwise middle-class families who insist on “keeping up with the Joneses” and buy a bunch of useless crap like 60-inch plasma screens, yearly vacations, every new gadget that comes out and a 3,000 square ft. “mini estate”. Hmph. NEWS FLASH: “Mini estates” are another word for “tract homes”, nice or not. Get over it. The few people that do have money, have more of it than they could spend in three lifetimes and act as if everyone below them socieconomically aren’t worth two spoons of urine. The same “elite” like Suzi Orzman, Jean Chatzky and the like give irrelevant financial advice to the masses, like is $500,000 enough for retirement? Last week Chatzky said $2 million for people under 50. Then today they had a segment: Is $5 million enough in your retirement? $5 million? The people I know who make $200,000 a year, don’t have $5 million in retirement savings. And that’s a VERY few people. Of course some coiffed talking bobble head on CNBC or “Today” has $5 million in retirement savings because they pull down high six figures to offer their so-called “advice” for a 5-minute segment every other week. Why don’t we ask Emperor Bloomberg how much we need for our retirement, that’d be about as useful. Or the people who crashed our economy but are somehow “worth” $100 million a year in “bonuses” and stock. I wouldn’t dignify them by urinating on their leg. It would be a shame to waste perfectly good urine.
I’m afraid there’s no solution here. Too many forces are working against us. Healthcare is rising faster than inflation. There’s a lot more old people than ever before. And the recession/depression we’ve gone through essentially negated a decade or more of work for a lot of people. You can’t get that back. Meanwhile we are told that a 401k is adequate, “Americans just aren’t doing it right” is basically the quote in the WAPO article.