Thursday, January 20, 2011

Are You Saving Enough for Retirement?

The answer for most is, sadly, no.  In fact, one in three people have zero retirement savings.  What are they thinking?  The answer,sadly, is they are counting on Social Security to be their sole income in retirement.  Big mistake  These people need a close encounter with reality.  Social Security should only count for 1/3 of your retirement income, and 1/3 from pensions, 401ks, and the last 1/3 from savings.

The medium savings in IRA accounts today is $2000 according to the Bureau of Labor Statistics.
American's in the lower income brackets overwhelmingly look to Social Security for just about 100% of their retirement incomes.  I won't go into a lengthy discussion here about the health of Social Security, but suffice it to say people should be very concerned with its ability to keep up with real inflation measurements that would include energy and food, unlike the government's measurements which understate inflation, and suppress Social Security cost of living adjustments.

Click to Enlarge

HT: theo


  1. C'mon Grouch we worry about this stuff when it reaches a crisis. Hey...maybe at that point banks will bail people out and then it will have come full circle. :)

  2. Why didn't I think of that? I could use a free bailout from my bank.

  3. Don't worry biz, there will be plenty of hand outs provided by people who were responsible enough to save... That is how everything works now :(

  4. What cynical answers by Suba and DIY Investor. Alas, I certainly understand where they are coming from.... It's just sad.

    P.S. Where did you get the statistic that 1/3 have no retirement savings?

  5. Roshawn, that stat comes for a Fact Sheet published in 2009 by the Social Security Administration.

  6. I function on the assumption that my generation will not have SS. So, we need to save enough. Are we saving enough? No. Every year I tell myself I will start saving more and every year I tell myself that there is always next year. Sad but true.

  7. Aloysa,

    SS will be there for the younger generations.

    All who have reached the minimum retirement age of 95 and can claim less than $100,000,000,000 in New Dollars annual income, are qualified.

  8. I believe what you are saying, but yet it is so hard to believe that people would still not save for retirement, especially since so few companies offer pensions anymore.

    We will only be counting on ourselves for retirement. I am just incredulous that people would be so irresponsible. (But I guess not entirely surprised now that I think about it.)

  9. SS is paying out more now than it takes in. How long can that last? We know there must be cuts comming. Do you have a company pension? How safe is that.
    That means a person must invest in their own 401K and IRA's.