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Eye opening retirement savings stat

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gamecockcat

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Oct 29, 2004
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Just read this today: 8% of Americans have saved $1M or more for retirement. THIRTY SEVEN PERCENT (37%!!) haven't saved a dime. The 37% is up from 30% only 3 years ago.

I'm sure this will quickly devolve into a political discussion, but that's not my intention. Over 1/3 of Americans have no retirement savings. IIRC, close to 2/3 are living paycheck to paycheck. And HH credit card debt is at an all-time high, >$1 trillion. And Social Security system is on a downward spiral (although I believe there are pretty easy and fairly painless fixes to SS). We have a looming retirement crisis and not many voices are being heard about fixing it (among many, many other problems in the US).
 
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gamecockcat said:
And Social Security system is on a downward spiral (although I believe there are pretty easy and fairly painless fixes to SS).
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Whatever the fix is, it's not s significant matter to me - I'm too old to be affected.

That said, I don't see a simple fix. Increasing the amount of income that's taxed takes money out of the economy for investment that limits growth for the future - spiting yourself.

Raising retirement age is most effective but no one wants to do it even if it takes effect well the the future. So not easy.

Reducing payments to those well off might work, but it's cutting benefits.

Net, what is your easy & near painless? Thanks.
 
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gamecockcat said:
Just read this today: 8% of Americans have saved $1M or more for retirement. THIRTY SEVEN PERCENT (37%!!) haven't saved a dime. The 37% is up from 30% only 3 years ago.

I'm sure this will quickly devolve into a political discussion, but that's not my intention. Over 1/3 of Americans have no retirement savings. IIRC, close to 2/3 are living paycheck to paycheck. And HH credit card debt is at an all-time high, >$1 trillion. And Social Security system is on a downward spiral (although I believe there are pretty easy and fairly painless fixes to SS). We have a looming retirement crisis and not many voices are being heard about fixing it (among many, many other problems in the US).
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Thx for posting, sobering but not surprised

But I would sure like to hear more about the easy and painless fixes to SS . . . and so would Congress.
 
vhcat70 said:
Whatever the fix is, it's not s significant matter to me - I'm too old to be affected.

That said, I don't see a simple fix. Increasing the amount of income that's taxed takes money out of th economy for investment that limits growth for the future - spiting yourself,

Raising retirement age is most effective but no one wants to do it even if it takes effect well the the future. So not easy.

Reducing payments to those well off might work, but it's cutting benefits.

Net, what is your easy & near painless? Thanks.
Click to expand...
You beat me to it. 😀
 
At this point, I think accepting SS for what it is is the only possibility. Net, I think starting mandatory forced individual savings accounts is the only thing that has a shot to assure retirement incomes. Perhaps there could be matches on the first say $20-50K of income.
 
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gamecockcat said:
Just read this today: 8% of Americans have saved $1M or more for retirement. THIRTY SEVEN PERCENT (37%!!) haven't saved a dime. The 37% is up from 30% only 3 years ago.

I'm sure this will quickly devolve into a political discussion, but that's not my intention. Over 1/3 of Americans have no retirement savings. IIRC, close to 2/3 are living paycheck to paycheck. And HH credit card debt is at an all-time high, >$1 trillion. And Social Security system is on a downward spiral (although I believe there are pretty easy and fairly painless fixes to SS). We have a looming retirement crisis and not many voices are being heard about fixing it (among many, many other problems in the US).
Click to expand...
Great topic, gamecockcat!
With the inflation we’ve had recently, it makes one wonder ……

When 75 is time to die: the horrifically plausible film imagining state-run euthanasia in Japan​

 
gamecockcat said:
Just read this today: 8% of Americans have saved $1M or more for retirement. THIRTY SEVEN PERCENT (37%!!) haven't saved a dime. The 37% is up from 30% only 3 years ago.

I'm sure this will quickly devolve into a political discussion, but that's not my intention. Over 1/3 of Americans have no retirement savings. IIRC, close to 2/3 are living paycheck to paycheck. And HH credit card debt is at an all-time high, >$1 trillion. And Social Security system is on a downward spiral (although I believe there are pretty easy and fairly painless fixes to SS). We have a looming retirement crisis and not many voices are being heard about fixing it (among many, many other problems in the US).
Click to expand...

I think we're heading for disaster, personally. Too large a percentage of society is in debt, living paycheck to paycheck, have little to no retirement, and/or are priced out of a house.

It's hard for me to imagine the US is in a good spot come 20-30 years from now unless something big changes.
 
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You would be surprised what I see on a daily basis. People are just not scared of debt and literally only look at what the monthly payment is going forward for anything they buy. It covers all professions, from hourly employees to physicians. The last couple years I have really noticed a big difference in savings. Alot of people used to have $40-50k in savings and that has now dwindled down to $10-20k, if that. If they are currently a home owner, they more than likely have some good equity built up if they bought before Covid but still cash on hand is not as strong as it used to be.

What do you need in the bank to feel comfortable?
 
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$20k is fine for me. Not sure what I need $40-$50k for. Not planning an addition to my house. I pay as I go for other improvements, windows, roof, etc.

Does anyone believe in the rule of 72 anymore?
 
Tskware said:
Thx for posting, sobering but not surprised

But I would sure like to hear more about the easy and painless fixes to SS . . . and so would Congress.
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One idea that has been floated is to add a lower social security tax (say 3%) once W-2 income tops a certain level like $500,000. So there would still be no tax SS tax on the W-2 income between $160,400 and $500,000. Both figures would be indexed for inflation. Employers would match the additional tax as they do now under the current system. Also the annual COLA increases are generally higher than the core rate of inflation. This could be adjusted to better match the two and generate program savings.
 
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DSmith21 said:
One idea that has been floated is to add a lower social security tax (say 3%) once W-2 income tops a certain level like $500,000. So there would still be no tax SS tax on the W-2 income between $160,400 and $500,000. Both figures would be indexed for inflation. Employers would match the additional tax as they do now under the current system. Also the annual COLA increases are generally higher than the core rate of inflation. This could be adjusted to better match the two and generate program savings.
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OK, that's no different than an income tax rate increase for those people. How is that easy & near painless - both to the individuals & investment in the economy? To me, it's more welfare transfer payments.

Waiting.
 
DSmith21 said:
Also the annual COLA increases are generally higher than the core rate of inflation. This could be adjusted to better match the two and generate program savings.
Click to expand...

Don't disagree on the tax on super high incomes (you mentioned >$500K) but another idea along the lines above I have read is to not give the COLA to the top payment of SS. For example, if the most anyone can draw is $3500 per month, no COLA is added, but it is added at every other level until the cap is reached. If you draw $1000 per month, and COLA is 5%, you would get $1050, but the ones drawing $3500 per month would not get a raise. You could look at raising the top payout every five or ten years.

The thought being that the top recipients made the most money in their career and paid the most in, and should have the most assets to draw from, e.g., pension or most likely 401K, than the folks only drawing $1000 per month. Don't remember the exact number, but believe that change alone would solve about 20% of projected SS shortfall in the future.
 
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Tskware said:
Don't disagree on the tax on super high incomes (you mentioned >$500K) but another idea along the lines above I have read is to not give the COLA to the top payment of SS. For example, if the most anyone can draw is $3500 per month, no COLA is added, but it is added at every other level until the cap is reached. If you draw $1000 per month, and COLA is 5%, you would get $1050, but the ones drawing $3500 per month would not get a raise. You could look at raising the top payout every five or ten years.

The thought being that the top recipients made the most money in their career and paid the most in, and should have the most assets to draw from, e.g., pension or most likely 401K, than the folks only drawing $1000 per month. Don't remember the exact number, but believe that change alone would solve about 20% of projected SS shortfall in the future.
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Bad bleeding heart thought.
 
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As someone who works in international business, my view is that we should put a "Social Security Support" Consumption Tax on products and services that are imported into our country. Look at our four largest trade partners.

- China: $536B
- Mexico: $454B
- Canada: $436B
- India: $118B

Tax each one of these 13% in addition to whatever tariffs are already placed on the goods and services and you'll probably generate $70B worth of revenue + increase labor demand in our country (higher wages to get SS from here too).

I am NOT a free trader. And if you look at what's going on with our country I am 100% correct to have this opinion.
 
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Tskware said:
Don't disagree on the tax on super high incomes (you mentioned >$500K) but another idea along the lines above I have read is to not give the COLA to the top payment of SS. For example, if the most anyone can draw is $3500 per month, no COLA is added, but it is added at every other level until the cap is reached. If you draw $1000 per month, and COLA is 5%, you would get $1050, but the ones drawing $3500 per month would not get a raise. You could look at raising the top payout every five or ten years.

The thought being that the top recipients made the most money in their career and paid the most in, and should have the most assets to draw from, e.g., pension or most likely 401K, than the folks only drawing $1000 per month. Don't remember the exact number, but believe that change alone would solve about 20% of projected SS shortfall in the future.
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Fair point. One option is to eliminate the SS cap for people making so much money they no longer contribute because they're so far above the cap. Right now it's just $160k a year. The C-suite folks in just a small or mid-cap sized company can easily make 7 figures.
 
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vhcat70 said:
OK, that's no different than an income tax rate increase for those people. How is that easy & near painless - both to the individuals & investment in the economy? To me, it's more welfare transfer payments.

Waiting.
Click to expand...
Either taxes will have to go up or benefits have to be cut to keep SS solvent. You could also have some combination of both. The only way it is "painless" is if it impacts a low number of people like the top 2% of W-2 earners or so. A lot of dems want to tax all W-2 income at the full SS rate. That would be a huge tax increase and be bad for the economy. Wayne's idea of tariffs being part of the answer is not bad. By the way, Medicare is in much worse financial shape than SS.
 
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I'm 42. I would love to be able to opt out of social security and just autodraft that money into VFIAX. I'd come out well ahead, especially since I'm self-employed.

If AI destroys the knowledge economy as some are projecting (I'm highly dubious), it will be very difficult for people who didn't plan ahead and need to continue working in the elder years.

Between all the various government handouts and rampant inflation during COVID, I think we are all but certain to have a serious recession in the next few years and a lot of people are going to be SOL without more government handouts, which just creates a vicious cycle.
 
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DSmith21 said:
Either taxes will have to go up or benefits have to be cut to keep SS solvent. You could also have some combination of both. The only way it is "painless" is if it impacts a low number of people like the top 2% of W-2 earners or so. A lot of dems want to tax all W-2 income at the full SS rate. That would be a huge tax increase and be bad for the economy. Wayne's idea of tariffs being part of the answer is not bad. By the way, Medicare is in much worse financial shape than SS.
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F that... no more taxing income. Taxing work worked when we weren't outsourcing / importing everything. Time for consumers to pay the piper.
 
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Hank Camacho said:
If AI destroys the knowledge economy as some are projecting (I'm highly dubious), it will be very difficult for people who didn't plan ahead and need to continue working in the elder years.
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I think Google had the goods on AI for years and realized it would be bad for their earnings / society and therefore didn’t release it. Then Altman released ChatGPT and it forced their hand. This shit isn’t good, Hank.
 
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Oh I absolutely hate it and would love to see humanity destroy it before it gets started. I just think predictions that AI is going to end knowledge professions are stupid. Professionals will always have a comparative advantage over laypeople trying to rely on AI alone.

I also think we are going to see massive fiascos from poorly implemented AI that is going to sour mass adoption for quite a while. For instance, the Jefferson County bus situation or Israel trying to use it for border security. I just hope no one gets killed from bad AI but I think that is inevitable.
 
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Hank Camacho said:
Oh I absolutely hate it and would love to see humanity destroy it before it gets started. I just think predictions that AI is going to end knowledge professions are stupid. Professionals will always have a comparative advantage over laypeople trying to rely on AI alone.

I also think we are going to see massive fiascos from poorly implemented AI that is going to sour mass adoption for quite a while. For instance, the Jefferson County bus situation. I just hope no one gets killed from bad AI but I think that is inevitable.
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I think you're going to see a steady stream of layoffs for a while as it gets integrated into big business (right now it's not really released yet)... and then you'll see whistleblowers coming forward... and then you'll see the government get involved... and then you'll see some serious regulation.
 
WayneDougan said:
I think you're going to see a steady stream of layoffs for a while as it gets integrated into big business (right now it's not really released yet)... and then you'll see whistleblowers coming forward... and then you'll see the government get involved... and then you'll see some serious regulation.
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I don't think that's unreasonable. I also think big businesses are going to face a situation where the more they implement it to reduce the labor force the less consumers there are to buy their products, which could create a self-limiting situation.

If no one has a job, who is going to buy shit?
 
Hank Camacho said:
I don't think that's unreasonable. I also think big businesses are going to face a situation where the more they implement it to reduce the labor force the less consumers there are to buy their products, which could create a self-limiting situation.

If no one has a job, who is going to buy shit?
Click to expand...

Something like 36% of the people building this shit say that it has a 1/10 chance to end the world within 15 years. Yet they are still going forward. Lunatics!
 
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Wesley91581 said:
mortgage payment
Credit cards
72 month car notes
Crypto currency
Student debt

All these are reasons people neglect contributing to retirement
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People are always going to have stupid excuses to not save. No one made anybody rack up student loans or credit card debts. And if you "invest" in crypto, you get what you deserve, imo.
 
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The attitude I see are folks simply DGAF anymore. They are dead broke, live paycheck to paycheck but still must have to latest and best things so they just charge without much care and many plan on filing bankruptcy to get rid of the debt when it maxes out on them. Too many are obsessed with their social profile so they live an enormous lie when it comes to their finances. Inflation and high interest rates is destroying the middle class and completely burying the poor.
 
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BankerCat12 said:
You would be surprised what I see on a daily basis. People are just not scared of debt and literally only look at what the monthly payment is going forward for anything they buy. It covers all professions, from hourly employees to physicians. The last couple years I have really noticed a big difference in savings. Alot of people used to have $40-50k in savings and that has now dwindled down to $10-20k, if that. If they are currently a home owner, they more than likely have some good equity built up if they bought before Covid but still cash on hand is not as strong as it used to be.

What do you need in the bank to feel comfortable?
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I keep around $20K in the bank in savings/checking and just increase the amount I’m putting into my retirement account at work if I need to. And frankly I should probably have even less than that in checking/savings and have more of it in some sort of higher yield investment that’s relatively liquid. I max out what I can out in my Roth IRA that I got in my own. Also got some high yield CDs to diversify my portfolio with some safer assets.
 
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Ron Mehico said:
Your stats are a little confusing without context. 37% and 8% of people retirement age? 37% of every American? What is the actual useful stat?
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Pretty easy: of all Americans, 8% have saved $1M or more. However, 37% of all Americans haven't saved anything.

Not sure how that wasn't clear.
 
gamecockcat said:
Pretty easy: of all Americans, 8% have saved $1M or more. However, 37% of all Americans haven't saved anything.

Not sure how that wasn't clear.
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The point is who cares if a 16 year old (or whatever) hasn't saved anything. That has no bearing on whether that person will be capable of retiring. What people are curious about is how ready the average American is for retirement and/or what percentage of working age Americans lack the financial assets to have any reasonable chance of retirement.
 
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Hank Camacho said:
The point is who cares if a 16 year old (or whatever) hasn't saved anything. That has no bearing on whether that person will be capable of retiring. What people are curious about is how ready the average American is for retirement and/or what percentage of working age Americans lack the financial assets to have any reasonable chance of retirement.
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Well the "good" news is that life expectancy is dropping in the US due to the increased drug use we were all told that didn't matter, so that helps on the cost side.
 
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