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Eye opening retirement savings stat

You could make the argument that a mortgage payment IS forced saving. The rest of those.. student loans, high carpayment, etc.. are their own problem.

Have to focus on educating the youth when it comes to taxes, personal finance, budgeting, basic investing. That has to be done at home AND in the schools. If you can nail down just a few key principals of money and saving, that's how you can not only become financially "free" yourself.. but so can your family and so can your future generations.
 
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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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22% of the US is made up of children. It’s not 37% of Americans, someone above already answered that its retirees that you were using percentages for. Thankfully someone else understood the question I was asking.
 
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etowncatfan said:
Go listen to Dave Ramsey. It isn’t rocket science.
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A lot of people don't like Dave, but he isn't wrong. You gotta live below your means, especially in times like these. It's sad when I see folks who you can just tell are struggling, yet they drop all kinds of cash in needless things like lottery tickets, tobacco, eating out and the like. I don't know if it's still a thing, but I remember years ago NYC was gonna do away with free breakfast and lunch in schools. The Parents were livid. I wonder how many of those Parents had the newest rides and cell phones. You mean you can't afford some oatmeal and some bread and lunchmeat? It's all about keeping up with the Jonses anymore at the cost of selling your soul to government handouts. It's a sad deal.
 
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I would imagine a problem going forward is the proliferation of people working in the gig economy, odd jobs, etc. Not much opportunity to contribute to a 401k if your main source of income is an OnlyFans account.
 
jameslee32 said:
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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What's fair about a tax increase? How does that help investment for growth of the economy? Or you DGAS?

I mean a 15.5% tax increase on wages will kill productivity. The previous idea is the same on a lesser scale.
 
It used to be car notes were 48 months max now a dealership asks how much monthly payment can you “afford” and they squeeze you in the most expensive car you can “afford” on a 72 month car note at 5% interest to make the monthly payment seem doable.
 
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Wesley91581 said:
It used to be car notes were 48 months max now a dealership asks how much monthly payment can you “afford” and they squeeze you in the most expensive car you can “afford” on a 72 month car note at 5% interest to make the monthly payment seem doable.
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Yeah but that's not including the Happy Honda Days (tm) deal of $3,995 due at signing for a lease on a base model Civic lol
 
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Wesley91581 said:
It used to be car notes were 48 months max now a dealership asks how much monthly payment can you “afford” and they squeeze you in the most expensive car you can “afford” on a 72 month car note at 5% interest to make the monthly payment seem doable.
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They did but that's a simple catch if anyone actually cares to pay attention. They aren't forcing people into bad deal. People just can't help themselves. Then add inflation to the mix and even buying a used car right Now is an insane cost.

Insane inflation is a relatively recent addition, so I don't think it can be much blamed at this point for the issue.

Imo the bigger issue is lack of impulse control (generations in the making), artificial need to keep up appearance, an epidemic of lacking common sense, and a relatively recent dependence on the government to bail out anyone and everyone
 
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bigblueinsanity said:
They did but that's a simple catch if anyone actually cares to pay attention. They aren't forcing people into bad deal. People just can't help themselves. Then add inflation to the mix and even buying a used car right Now is an insane cost.

Insane inflation is a relatively recent addition, so I don't think it can be much blamed at this point for the issue.

Imo the bigger issue is lack of impulse control (generations in the making), artificial need to keep up appearance, an epidemic of lacking common sense, and a relatively recent dependence on the government to bail out anyone and everyone
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The crazy part is just how many people in society just look at the monthly payment, not really caring or even understanding how long the term is, how much interest they are paying, etc.

My car is 5 years off of loan payments, but it's finally starting to run into some problems that will likely cost a few grand, plus it's a sedan and now with a family, I could really use an SUV. But the interest rates are upwards of 8.5%. You almost would be better off buying a new car at full value if they offer a 0% interest deal (I've seen some out there), than buying that same model used, at 20% less, but with a 9% interest rate (I'm not sure if the math checks out on that, but I bet it ain't much different).

And that's one of the many problems today. It's not just homes people can't buy.. a lot of us aren't buying cars, and therefore churning the economy, until those rates come down or until we are forced into doing so.
 
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Since nobody lives past 75 and they work til they are 70 I cant see how saving anything for retirement is needed. I'm 40 haven't saved a nickle and have had a job since I've been out of high school. I'm more interested in them taking ss out of my check still when I believe I can use that money to prepare for late life. I'll be dead with 100000 in the bank at 53.. naw not happening. Live and enjoy life as you go because nobody gets to ride off into the sunset happy and rich at 80 or 90.. it just don't happen anymore
 
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LineSkiCat14 said:
The crazy part is just how many people in society just look at the monthly payment, not really caring or even understanding how long the term is, how much interest they are paying, etc.

My car is 5 years off of loan payments, but it's finally starting to run into some problems that will likely cost a few grand, plus it's a sedan and now with a family, I could really use an SUV. But the interest rates are upwards of 8.5%. You almost would be better off buying a new car at full value if they offer a 0% interest deal (I've seen some out there), than buying that same model used, at 20% less, but with a 9% interest rate (I'm not sure if the math checks out on that, but I bet it ain't much different).

And that's one of the many problems today. It's not just homes people can't buy.. a lot of us aren't buying cars, and therefore churning the economy, until those rates come down or until we are forced into doing so.
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Yep right now when factoring everything - you're better off buying new. That entire market is about to collapse because costs are insane. Of course there will probably be some bailout.
 
bigblueinsanity said:
Yep right now when factoring everything - you're better off buying new. That entire market is about to collapse because costs are insane. Of course there will probably be some bailout.
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As crazy as it sounds, I'm contemplating paying half cash for a new car, or even close to full value in cash for a used. Just to avoid the interest. Of course, then I realize that money would make like $200 a month in a HYSA.
 
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LineSkiCat14 said:
And that's one of the many problems today. It's not just homes people can't buy.. a lot of us aren't buying cars, and therefore churning the economy, until those rates come down or until we are forced into doing so.
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I mean that was the point, to slow the enconomy and inflation, even possibly putting us in a recession. That was the whole point of raising rates. It’s also caused many debt heavy companies to go out of business, which is a good thing. Will probably start lowering rates late next year I would think as shit is starting to hit the fan in a lot of sectors
 
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Ron Mehico said:
I mean that was the point, to slow the enconomy and inflation, even possibly putting us in a recession. That was the whole point of raising rates. It’s also caused many debt heavy companies to go out of business, which is a good thing. Will probably start lowering rates late next year I would think as shit is starting to hit the fan in a lot of sectors
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Yeah I get that it had to be done. It makes sense that we needed to slow the economy. And maybe the recession is needed.

But I just don't know how many more "hurdles" those in their 30s and 40s can handle. I'm almost 37 and graduated during the great recession, then had COVID, then the recession that came with that, and now a few years of crazy inflation, and a potential 3rd recession? All before 40. A lot of people my age, their financial "health" got absolutely wrecked by one or more of those events.

Maybe it's doom and gloom, but I get the feeling many in their 30's and 40's are hanging on by a thread (or rather, paycheck to paycheck), another recession, with more job loss, is going to really knock a lot of people out for the count.
 
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LineSkiCat14 said:
Yeah I get that it had to be done. It makes sense that we needed to slow the economy. And maybe the recession is needed.

But I just don't know how many more "hurdles" those in their 30s and 40s can handle. I'm almost 37 and graduated during the great recession, then had COVID, then the recession that came with that, and now a few years of crazy inflation, and a potential 3rd recession? All before 40. A lot of people my age, their financial "health" got absolutely wrecked by one or more of those events.

Maybe it's doom and gloom, but I get the feeling many in their 30's and 40's are hanging on by a thread (or rather, paycheck to paycheck), another recession, with more job loss, is going to really knock a lot of people out for the count.
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We had the recession in 2008, then for 13 years one of the greatest runs financially we’ve ever seen, then a crazy time these last 2 years. I think if you had good habits and didnt take on crazy debt you should be fine. I’m probably completely sheltered in my social circle and have no normal perspective but we’ve had the usually spikes and collapses you see. But the DOWS at 36k so we’re not in the Great Depression over here. You would’ve made 28% in the S&P 500 investing over the last 3 years. Hopefully the rates start to decrease, groceries and shit drop off their insanity, and we can get back on track. Maybe a new roaring 20s. I will say I’m usually optimistic though
 
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bigblueinsanity said:
One reason people don't save is because they regularly see government bailing out people. When it isn't a bailout, it's plenty handouts. So many people see it as they have a safety net....the government
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Just think about all of the people who lived below their means and saved for their kids’ educations. Then, the gov says it wants to relieve the student debt, which means the savers have to pay AGAIN. Making irresponsibility pay can drive behavior.
 
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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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Some meandering thoughts.

1. Yes, we have a bubble looming, but it might not be as dire as you might think simply based off the statistics presented.

2. If the stats presented in the OP only involve retirees. Well, there is a sizeable portion of retirees right now who are living off pensions/programs. My parents live off their GM pension/SS and don't have any savings. Is it the best way to live? Absolutely not, but their not suffering in the streets. I'm sure there are other things like this as well. While that doesn't account for everyone in the 37%, it probably accounts for a decent chunk.

3. It's not drilled into the public early/often enough. I certainly was never taught how to invest.....the magic of compounding interest, etc....in grade school or college. And my children have not been taught thus far throughout elementary/middle school. This is a major problem.

4. Right now we are in the midst of the greatest wealth transfer in the history of the world. Although nobody knows what to expect, this certainly will make an impact.

www.kiplinger.com

How Might the Great Wealth Transfer Change Society?

As $84 trillion in assets move from Baby Boomers to younger generations, we could see a greater emphasis on financial technology and investing based on values.
www.kiplinger.com www.kiplinger.com


5. The gap. However little the current retirees lack, the future is bright. Generations from Gen X to the Millennials have been saving very nicely.

money.com

Millennials vs. Boomers: Who’s Doing a Better Job Saving for Retirement?

The rise of auto-enrollment in 401(k)s has boosted retirement preparedness for younger workers.
money.com money.com


 
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Ron Mehico said:
We had the recession in 2008, then for 13 years one of the greatest runs financially we’ve ever seen, then a crazy time these last 2 years. I think if you had good habits and didnt take on crazy debt you should be fine. I’m probably completely sheltered in my social circle and have no normal perspective but we’ve had the usually spikes and collapses you see. But the DOWS at 36k so we’re not in the Great Depression over here. You would’ve made 28% in the S&P 500 investing over the last 3 years. Hopefully the rates start to decrease, groceries and shit drop off their insanity, and we can get back on track. Maybe a new roaring 20s. I will say I’m usually optimistic though
Click to expand...

Oh I don't even mean me, really. I navigated these last 15 years very well, and had a little bit of luck. Fortunate enough to start my career in IT the summer after I graduated and never didn't have a job in IT since. Saved for the duplex in the mid 2010s and landed one a few years before COVID.

But I just feel ther's far too many my age who DIDN'T navigate these last 2 decades as well (or as lucky). A lot couldn't find jobs in the 2010s, leading to that whole Occupy Movement. And while those years from 2009 to 2021 were excellent, far too many were not well equipped financially, to take advantage.

Of course there are millions who DID just fine during this time.. I guess I just wonder the percentage of folks who are in severe debt, with next no no purchasing power, faced with HCOL and the inability to build wealth through a mortgage.. what's the percentage of people who fall into this group, would start to become a drag on our economy? I mean, as we speak, consumer debt is only rising, every day I would guess more and more households are going into the red.
 
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Dore95 said:
I would imagine a problem going forward is the proliferation of people working in the gig economy, odd jobs, etc. Not much opportunity to contribute to a 401k if your main source of income is an OnlyFans account.
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I am not sure I understand your point. If you are self employed, regardless of your job, you pay SS and set up an IRA. Your line of work really does not change that.
 
LineSkiCat14 said:
The crazy part is just how many people in society just look at the monthly payment, not really caring or even understanding how long the term is, how much interest they are paying, etc.

My car is 5 years off of loan payments, but it's finally starting to run into some problems that will likely cost a few grand, plus it's a sedan and now with a family, I could really use an SUV. But the interest rates are upwards of 8.5%. You almost would be better off buying a new car at full value if they offer a 0% interest deal (I've seen some out there), than buying that same model used, at 20% less, but with a 9% interest rate (I'm not sure if the math checks out on that, but I bet it ain't much different).

And that's one of the many problems today. It's not just homes people can't buy.. a lot of us aren't buying cars, and therefore churning the economy, until those rates come down or until we are forced into doing so.
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I have purchased most of my new cars as 0 interest cars. It’s a good plan for people who are not picky about their cars.
 
I think technology will help in the future. Even now more and more people are embracing digital budgeting programs. And as investing spreads, I think you'll see more of it.
 
Caveman Catfan said:
I am not sure I understand your point. If you are self employed, regardless of your job, you pay SS and set up an IRA. Your line of work really does not change that.
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Annual IRA contribution limits are much lower than 401k limits ($22,500 vs $6,500). That is one big disadvantage if you don't have access to a 401k.
 
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You'll also likely see more discerning consumers in the future.

I couldn't find the article I was reading fairly recently, but it was discussing the topic of "how much more expensive are things these days than in the old days?" Newsflash, things are more expensive, but not NEARLY as much as many would tend to believe.

For example:
-(in the old days) A typical middle class family would pay for a mortgage, 1-2 car payments, basic utilities (electric/gas, 1 single land-line), food (mostly groceries and less restaurants), and didn't take as many vacations/etc.

-(Now a days) A typical middle class family pays: mortgage, 2-3 car payments, basic utilities (electric/gas) but also pays for internet, some sort of TV package (satellite/cable/streaming service), gym membership, cell phones for the whole family, Amazon Prime, school loans of parents, tuition for kids, tons of Christmas and birthday presents, a thousand sports fees for the kids, more expensive vacations, new clothes every year, daycare/afterschool, numerous school/work/church fundraisers, etc. etc, etc.


Now certainly things are more expensive now than they were, but also people are spending their money way more than they ever have. The typical family "could" cut back quite a bit if they wanted to......hence why people like Dave Ramsey are so effective.
 
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Caveman Catfan said:
I am not sure I understand your point. If you are self employed, regardless of your job, you pay SS and set up an IRA. Your line of work really does not change that.
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I was being somewhat facetious. Of course everyone (everyone who correctly reports income, at least) pays into SS and can set up retirement accounts on their own. My larger point though was about the changing nature of work these days .

If you go back 100 years, very few people had any retirement savings. Very few people had any money period. They were poor, subsistence living, mainly farmers. But lives were harder then and people didn't live as long.

The economy changed and then the norm was to be employed by large employers with pension plans and other savings mechanisms (401k's) with employer contributions.

That no longer seems to be the norm. Pension plans have become rarer in the private sector, many employers do not contribute to 401ks, etc. And then you've got many people who "work for themselves" but in actuality have poor paying "gigs" that it is hard to understand how they get by, much less save anything. But they will probably live into their 80s.
 
Im no left winger by any stretch, but if we could cut the defense budget and stop supporting endless war everywhere all the time, we might access some much needed dough. Im for a strong military, but my god, normalizing spending 17-19% of our total budget on the military seems a bit much...and that ignores some of what goes to military via research, etc.
 
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BlueRaider22 said:
You'll also likely see more discerning consumers in the future.

I couldn't find the article I was reading fairly recently, but it was discussing the topic of "how much more expensive are things these days than in the old days?" Newsflash, things are more expensive, but not NEARLY as much as many would tend to believe.

For example:
-(in the old days) A typical middle class family would pay for a mortgage, 1-2 car payments, basic utilities (electric/gas, 1 single land-line), food (mostly groceries and less restaurants), and didn't take as many vacations/etc.

-(Now a days) A typical middle class family pays: mortgage, 2-3 car payments, basic utilities (electric/gas) but also pays for internet, some sort of TV package (satellite/cable/streaming service), gym membership, cell phones for the whole family, Amazon Prime, school loans of parents, tuition for kids, tons of Christmas and birthday presents, a thousand sports fees for the kids, more expensive vacations, new clothes every year, daycare/afterschool, numerous school/work/church fundraisers, etc. etc, etc.


Now certainly things are more expensive now than they were, but also people are spending their money way more than they ever have. The typical family "could" cut back quite a bit if they wanted to......hence why people like Dave Ramsey are so effective.
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I agree about some added monthly spending that has crept in over time (internet, cell phones).

But I don't really agree with the notion of having 3 car payments. Idk anyone who has that, who isn't already very rich. My wife and I only have 1 car payment (when one comes off payment, we trade in the older one, so we cycle payments). I don't think I know many people our age with 2 payments. Most have just 1 or even none.

Maybe the other things are the problem haha. Tuitions that have sky rocketed. Crazy youth sports fees. We can say some of these things are lifestyle creep.. but some of these things you actually have to have in today's world if you want to succeed.
 
LineSkiCat14 said:
The crazy part is just how many people in society just look at the monthly payment, not really caring or even understanding how long the term is, how much interest they are paying, etc.

My car is 5 years off of loan payments, but it's finally starting to run into some problems that will likely cost a few grand, plus it's a sedan and now with a family, I could really use an SUV. But the interest rates are upwards of 8.5%. You almost would be better off buying a new car at full value if they offer a 0% interest deal (I've seen some out there), than buying that same model used, at 20% less, but with a 9% interest rate (I'm not sure if the math checks out on that, but I bet it ain't much different).

And that's one of the many problems today. It's not just homes people can't buy.. a lot of us aren't buying cars, and therefore churning the economy, until those rates come down or until we are forced into doing so.
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Yeah, my newest vehicle is a 2007 Ford F150 and it is getting close to time to buy a newer model something. My oldest is a 2005 Sportage. Both have required some maintenance lately costing a couple of thousand each but are still running good so, until they breakdown...nothing. I want to wait a few more years to hit 70 years old (66 now) to buy what I will consider my last vehicle. I am currently saving money to pay off my house before that as well.
 
The biggest factor in retirement success from age 21 on is an individual's spending habits and that's (mostly) under the individual's control. Don't spend more than you make, pay yourself (save) as part of your budget, be smart with your purchases, don't be afraid to bargain or buy used, don't get too much house/car/clothes/dining out/etc., don't ignore non-IRA/401k savings for when Life throws you a curveball, etc. Too many people consume and consume and consume and end up with almost nothing at the end of the month. Wash, rinse, repeat. I've seen a statistic where >60% of working Americans are one missed paycheck away from getting behind on their bills. That's a problem.

Many of the younger generation have no desire to own a home, which, in the long run, is detrimental to their wealth creation. Rents are always only going to increase, at times faster than your wages. Leasing a car time after time is a losing strategy but allows the consumer to have latest and greatest. Look at the lines outside the Apple store every time they roll out another $1300 phone that is maybe 5% 'better' than the last version. How many wealthy people do you think have to have the latest gadget, the latest tech, the latest version of every single thing they own? I've played guitar for 40+ years and I've owned Fenders and Gibsons and several other name brands and have never bought one new - never. Same with amps. I haven't bought a new car in > 20 years. Have never had a car payment more than $396/mo. If I don't buy a car outright, I put enough down to keep my payment <$400 and then pay it off as quickly as I can. It's impulse control and far too few Americans possess it.
 
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Caveman Catfan said:
I don’t think that is correct. Self-employed people can put annual salary deferrals up to $22,500 (plus a catchup amount if 50 or over) utilizing a solo 401(k).

https://www.irs.gov/retirement-plans/retirement-plans-for-self-employed-people#:~:text=Make annual salary deferrals up,or as designated Roth contributions
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Interesting, I had never heard of a solo 401k. The main requirement appears to be that you must be a one person business with a federal tax ID number for that business. I assume that means the business must file a separate tax return each year.
 
vhcat70 said:
What's fair about a tax increase? How does that help investment for growth of the economy? Or you DGAS?

I mean a 15.5% tax increase on wages will kill productivity. The previous idea is the same on a lesser scale.
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Why are the rich exempt above $160k a year? Why do they deserve this benefit when obviously these people have the greatest ability to pay? They no longer have deductions?

The employee SS tax percentage is currently 6.2% for people making less than $160k. It wouldn't be fair to tax the wealthy at a higher SS tax rate than people making less money when federal income tax rates are already greater.
 
The problem is that most Americans are illiterate when it comes to finances. It doesn’t necessarily have anything to do with income. I work at a company in which only 25% of the hourly workforce which averages $120K in annual income takes advantage of the 401K with company match up to 6%. Willing to give up free money and reduce taxable income just so they can have a $70K truck and other frivolous stuff.
 
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