Retirement crisis in America

Mar 2012
56,305
37,878
New Hampshire
#1
Americans can sure use help with retirement. Baby boomers, in particular, have not saved nearly enough for retirement. They're going to live longer than they think, and if trends continue, many will run out of money before they die.

At Vanguard, the median 401(k) account value for an investor age 65 and older is $58,035. Average that out over 20 years — most Americans should expect to live into their 80s — and that is not a lot to pull out on a yearly basis, perhaps a little more than $3,000.

The state of those who have pensions are not much better. The median private pension was only $9,376 a year, according to the Pension Rights Center.

That leaves us with Social Security. In 2018, the average Social Security check was $1,422 a month or $17,064 a year.

Remember: these are the lucky ones. A 2018 study by the Federal Reserve Bank of Saint Louis found that only 27 percent of households have a defined benefit plan (a pension), while only 33 percent have a defined contribution plan (usually a 401(k)).

After looking at the data, the Saint Louis Fed concluded: "It could be worrisome that, for many American households, the total balances of their retirement accounts may not be sufficient to ensure a solid life in retirement."

There's a retirement crisis in America where most will be unable to afford a 'solid life'
 
Likes: Friday13
Jan 2019
772
264
Tempe, AZ
#3
I'm a BABY BOOMER, I retired early (at 56 almost 6 years ago), and my 2 retirement accounts are about $150K HIGHER than I when I retired! :D
 

kmiller1610

Former Staff
Mar 2007
32,530
6,418
#4
My wife and I are living in her Mom's house and trying to throw out enough stuff to fit into what will end up being our retirement home. We sold our much larger home to build up our cash reserves and reduce our operating costs. I plan on working as long as there is demand for my services. This 2 year project puts us in a fairly stable position for retirement. I think the first thing for anyone to do is to plan ahead and control outlays. Exercise, take care of yourself, enjoy your friends and lower your expectations. And don't think there is any value in being a victim of what you might think is an unjust system.
 
Jan 2019
772
264
Tempe, AZ
#5
When I was working, I made sure I put the maximum 16% into my 401K, in which the company match 100%. Anyone who does not take full advantage of such an opportunity is a FOOL! :oops:
 
Mar 2012
56,305
37,878
New Hampshire
#6
Despite the hefty price tag, there's a piece of good news about retirees' health-care costs: They aren't rising as quickly as they were even a few years ago.

A healthy male-female couple retiring at age 65 in 2019 can expect to spend $285,000 on health-care expenses in retirement, according to Fidelity Investments' annual analysis, released Tuesday. Broken down by gender, the estimate is $150,000 for women and $135,000 for men. The amount is up slightly from $280,000 in 2018. While the annual increase slowed over the last two years — 3.6 percent compared with 12.2 percent from 2015 to 2017 — the amount still poses a challenge for a nation that appears largely unprepared to cover the overall cost of retirement. Things that are not covered by Medicare — dental, basic vision, over-the-counter medicines, long-term care — would be on top of that $285,000 estimate.

Health-care costs for retirees climb to $285,000
 

johnflesh

Former Staff
Feb 2007
26,219
18,702
Colorado
#8
The GOP has a solution. Gut Social Security and Medicare.

This way, the boomers will die sooner, and their kids won't have to wait so long to inherit their property.
People should have a solution no matter who is in the WH.

Invest smart now and/or create your wealth after 5pm while you make your living during the day.

The only thing easy in this world is peeing in the shower.
 
Likes: boontito
Jan 2007
36,209
8,119
#9
Americans can sure use help with retirement. Baby boomers, in particular, have not saved nearly enough for retirement. They're going to live longer than they think, and if trends continue, many will run out of money before they die.

At Vanguard, the median 401(k) account value for an investor age 65 and older is $58,035. Average that out over 20 years — most Americans should expect to live into their 80s — and that is not a lot to pull out on a yearly basis, perhaps a little more than $3,000.

The state of those who have pensions are not much better. The median private pension was only $9,376 a year, according to the Pension Rights Center.

That leaves us with Social Security. In 2018, the average Social Security check was $1,422 a month or $17,064 a year.

Remember: these are the lucky ones. A 2018 study by the Federal Reserve Bank of Saint Louis found that only 27 percent of households have a defined benefit plan (a pension), while only 33 percent have a defined contribution plan (usually a 401(k)).

After looking at the data, the Saint Louis Fed concluded: "It could be worrisome that, for many American households, the total balances of their retirement accounts may not be sufficient to ensure a solid life in retirement."

There's a retirement crisis in America where most will be unable to afford a 'solid life'
Company pension plans are going away. Young people may be offered 401K type plans but it is up to the employee to make use of them, invest properly. My generation may be the last to have pensions.