New retirement survey just came out

[MillCreek]

https://transamericacenter.org/docs/default-source/retirement-survey-of-workers/tcrs2021_sr_four-generations-living-in-a-pandemic.pdf

This looks at retirement across four age demographics: Baby Boomers, Generation X. Millennials, and Generation Z. The key highlights of the survey start on page 9.

[Northwoods]

I am forever shocked at the median retirement savings levels.  Even boomers are barely cracking $200k.  I’ve never put more than 5% of my salary into my 401k at my current employer, and I’ve been here for 11.5 years.  Match is 1:1 on those contributions.  Wasn’t eligible for the match the first year, so didn’t bother putting much in, so really only 10.5 years of meaningful contributions.  It’s sitting at $215k right now. 

That boomers, over a working life 4x that long, and access to 401k’s for at least 3x that long to have a median savings $13k under that is pathetic.  Even if they didn’t get as much of a match, or make as much as I have in base salary.  The 401k has been in existence since 1978, but if you assume someone started saving in 1988, was making the median income of $34k at the time, and got 3% annual raises, from then to today putting just 5% combined salary deferrals and matching, and averaging only 8% returns, they’d have $374k today. 

I do have another ~$450k in traditional and Roth IRAs between my wife and I (and the money in my wife’s was my earnings too).  And if anything I feel like I’m behind.  And yet I have over 3x the boomer average savings, and 7x the Gen X average (and I’m one of the youngest Gen Xers).

Am I just way over what I need to be savings or is ~80% of this country going to be living in abject poverty in retirement?

[Bogie]

I'm at less than 10k now, but that's better than I was at 10 years ago... And one hell of a lot worse than where I was at in 2004...
 
I never should have moved to the suburbs... Jen, and most of her family, were scared of "those people" in the City - I didn't find that out until WAY too late.
 
My plan? Keep working. Social security when that kicks in five years from now, but keep working. And I'm hoping that the Santa Claus thing comes back post-covid... House and little machine shop is paid for.

[Nick1911]

Am I just way over what I need to be savings or is ~80% of this country going to be living in abject poverty in retirement?

I have often wondered the same.  I think it's the latter.  It's not a good situation all around.

[Ben]

I have often wondered the same.  I think it's the latter.  It's not a good situation all around.

Add me to the list regarding shock at how little is saved for retirement. I understand some people have various ills that befall them, but that should be some smaller percentage of the overall workforce.

I think a big part of the problem is the people who "need" a Platinum F150 instead of an F150XL, as one example.

[K Frame]

"I am forever shocked at the median retirement savings levels.  Even boomers are barely cracking $200k."

Tell me about it, although I sort of understand Baby Boomers... they were the last generation who were told that you work for one company your entire career and you'll get a nice pension.

Pensions are almost extinct, and the thing that sucks is that pensions really started going extinct right in the middle of many of the boomers' careers.



"Am I just way over what I need to be savings or is ~80% of this country going to be living in abject poverty in retirement?"

Unfortunately, that really seems to be the case.

I've been saving hard since the mid 1990s, as hard as I can.

As it stands right now I'm well on my way to $2 million in retirement savings in various IRAs, 401ks, etc., (I'll be 57 this coming April) and, if I work things just right, and the markets cooperate, buy the time I retire I should have between $2.5 and $3 million socked away for retirement.

And there are many days when I look at that and still think.... this isn't going to be enough to retire on.

[K Frame]

"I think a big part of the problem is the people who "need" a Platinum F150 instead of an F150XL, as one example. "

Yes, there is very much also that.

[zxcvbob]

I have often wondered the same.  I think it's the latter.  It's not a good situation all around.

I'm planning to retire at the end of this year (61 yo now, will be 62 then)  I have $1.01 million in my 401(k), another 3/4 million in other accounts, and my house is paid for.  My SS benefit is about $3000 a month if I wait until I'm 66 and 10 months to take it.  And I wonder if that's going to be enough.  Right now I could live pretty well just on the $3000; my expenses are pretty low.

It should be plenty, but the Democrats seem to be trying to blow up the currency in which case no amount is enough.

[tokugawa]

My gut feeling is retirement savings will be confiscated in a last ditch effort to prop up the black hole of debt, followed by the total irrelevance of the dollar AKA Wiemar America.

In other words, it won't matter if you have 1$ in savings or 10 million, it will all be worth the same.
An egg, that will still have value. And a piece of pork rind, that will have some value. A dollar bill will be competing with Charmin on a one to one level.

[MechAg94]

Makes me feel a bit better about where I am. 

However, there are a lot of people who live paycheck to paycheck.  To them, anyone who doesn't waste money appears rich. 

[Andiron]

My gut feeling is retirement savings will be confiscated in a last ditch effort to prop up the black hole of debt, followed by the total irrelevance of the dollar AKA Wiemar America.

In other words, it won't matter if you have 1$ in savings or 10 million, it will all be worth the same.
An egg, that will still have value. And a piece of pork rind, that will have some value. A dollar bill will be competing with Charmin on a one to one level.

This.

In the same vein,  I wonder what fresh bullshit the Admin is going to orchestrate to distract us from the fall of Afghanistan?  School is just resuming,  haven't had a proper massacre in a while.

[Bogie]

If I had money...
 
I'd try to put it in tangible assets... Some land, that sort of thing, or get it out of the country. Problem is, that makes it hard to "live off the interest."
 
Gold is a fiat currency. Yeah, you can run with it, if you can run, but it is still pretty horrible tasting if you try to eat it.
 
I'd consider unloading that paid-for house while the bubble is high (and we are in a bubble), and seriously downsizing to someplace cheap to live.

[Northwoods]

If I had money...
 
I'd try to put it in tangible assets... Some land, that sort of thing, or get it out of the country. Problem is, that makes it hard to "live off the interest."
 
Gold is a fiat currency. Yeah, you can run with it, if you can run, but it is still pretty horrible tasting if you try to eat it.
 
I'd consider unloading that paid-for house while the bubble is high (and we are in a bubble), and seriously downsizing to someplace cheap to live.

Friends moved from the Puget Sound to Arkansas.

[Bogie]

As long as they don't skew Arkansas politics...

[Northwoods]

As long as they don't skew Arkansas politics...

These are friends of mine.  If they skew the politics it’ll be to go further to the right.

[French G.]

I'm at less than 10k now, but that's better than I was at 10 years ago... And one hell of a lot worse than where I was at in 2004...
 
I never should have moved to the suburbs... Jen, and most of her family, were scared of "those people" in the City - I didn't find that out until WAY too late.
 
My plan? Keep working. Social security when that kicks in five years from now, but keep working. And I'm hoping that the Santa Claus thing comes back post-covid... House and little machine shop is paid for.

Retirement is overrated.

[HankB]

My gut feeling is retirement savings will be confiscated in a last ditch effort to prop up the black hole of debt . . .

If anything will touch off a massive wave of violence directed against politicians, that would be it.

[MechAg94]

If I had money...
 
I'd try to put it in tangible assets... Some land, that sort of thing, or get it out of the country. Problem is, that makes it hard to "live off the interest."
 
Gold is a fiat currency. Yeah, you can run with it, if you can run, but it is still pretty horrible tasting if you try to eat it.
 
I'd consider unloading that paid-for house while the bubble is high (and we are in a bubble), and seriously downsizing to someplace cheap to live.

I heard someone mention recently they were trying to duplicate their emergency fund in silver or gold just to have something tangible in case the dollar wasn't worth much or maybe wasn't available.  That amount doesn't reach retirement levels, but it might be good to have available. 

[K Frame]

And now, the other side of the coin...

More 401(k) and IRA millionaires than ever before.

https://www.cnbc.com/2021/08/19/401k-balances-hit-a-new-all-time-high-fidelity-says-.html

[Kingcreek]

A few years ago my wife said if we could put aside 1 million we could retire. When we hit a mil she said now it’s 1.5 because of cost of living etc. when we got to net worth of 1.5 she said it’s not enough unless we downsize our lifestyle our habits and our home.
I think she just wants me to work until I die or I’m a broken down old man so she can park me somewhere and live it up.
She is a very healthy 67 with strong Norwegian genetics and could very well have many active years ahead. I am 63 and have lived beyond the age of my father and 2 grandparents. While I am pretty healthy, I don’t see as many years ahead for me as I do her.
I don’t want her to be a poor widow someday but I also don’t want to miss out on my own good retirement years. When I reach full retirement age for SS benefits I’m definitely done. I am willing to work part time for awhile to avoid drawing from retirement funds.

[Ben]

A few years ago my wife said if we could put aside 1 million we could retire. When we hit a mil she said now it’s 1.5 because of cost of living etc. when we got to net worth of 1.5 she said it’s not enough unless we downsize our lifestyle our habits and our home.
I think she just wants me to work until I die or I’m a broken down old man so she can park me somewhere and live it up.
She is a very healthy 67 with strong Norwegian genetics and could very well have many active years ahead. I am 63 and have lived beyond the age of my father and 2 grandparents. While I am pretty healthy, I don’t see as many years ahead for me as I do her.
I don’t want her to be a poor widow someday but I also don’t want to miss out on my own good retirement years. When I reach full retirement age for SS benefits I’m definitely done. I am willing to work part time for awhile to avoid drawing from retirement funds.

All I can tell you is health over wealth. That was a big factor in my decision.

Just using the basic 4% rule, the $1.5 mil should be giving you $60K/yr. Add in in SSI (I assume for both of you) and you should be pushing $100K/yr. Seems like a reasonable retirement income. :)

[Northwoods]

Yeah, I figure 90-100k a year in today’s money for retirement income should be plenty.  That assumes no mortgage or kids on the payroll.  Maybe a little less if a significant amount comes from Roth accounts since they’re tax free.  So if my pension (yes, I actually have one of those) and SS total, say $55k, then $900k in retirement savings should be plenty.  I’d want a bit more than that however as pension doesn’t ever go up with inflation and SS doesn’t really keep up with inflation.  So I would need a bit extra to make up for that over a potential 20-30 years of retirement.

[MechAg94]

"I think a big part of the problem is the people who "need" a Platinum F150 instead of an F150XL, as one example. "

Yes, there is very much also that.

Thinking about this, I don't have an issue with getting the nice vehicle, but some people get the nice vehicle every couple years in a perpetual car payment.  They never pay off anything.  It also reminds me of people I used to work with who would practically day trade their 401K balances. 

There will always be a lot of people who just live paycheck to paycheck.  And the people who sit around collecting unemployment are probably not working on the future all that much. 

[Ben]

Thinking about this, I don't have an issue with getting the nice vehicle, but some people get the nice vehicle every couple years in a perpetual car payment.  They never pay off anything.  It also reminds me of people I used to work with who would practically day trade their 401K balances. 

There will always be a lot of people who just live paycheck to paycheck.  And the people who sit around collecting unemployment are probably not working on the future all that much.

Just for clarity, I wasn't saying not to buy a nice vehicle. If somebody wants a Ferrari, they should buy one, as long as they have the resources. If somebody is taking home $40K/yr though, an F150XL is probably a better decision than a (what, ~$80K now?) Platinum. Too many people want to buy stuff that they should have 3X their income for, just because the neighbor or whoever has one.

[Northwoods]

Just for clarity, I wasn't saying not to buy a nice vehicle. If somebody wants a Ferrari, they should buy one, as long as they have the resources. If somebody is taking home $40K/yr though, an F150XL is probably a better decision than a (what, ~$80K now?) Platinum. Too many people want to buy stuff that they should have 3X their income for, just because the neighbor or whoever has one.

I figure a good rule of thumb is you house shouldn’t cost more than 3x your salary and your all of your cars collectively shouldn’t cost more than 1/3 your salary.  Note, that’s a maximum, not a recommendation for what to actually spend.  My last vehicle was $10, and only because we had to prove we paid something or the sales tax would have been horrendous.

And some parts of the country it’s impossible to stick to that for housing unless you’re very highly paid.  When we bought this house it was 4.6x my salary.  Now it would be almost 7x my salary.