Average retirement savings

[mousefan73]

Anyone who gets a paycheck can save.

I assume you have lead a VERY fortunate and shelterd life.. You are so wrong here.

 

[SteveH]

IMHO it comes down to two things; first and foremost is personal responsibility, you know why save when you can go buy the new iPhone or drop $200 on some Nike shoes, or designer jeans. My parents, mostly my mom, taught me to start saving even before I had my first paycheck. Our school system is the second issue, we don't teach personal finances now, at least across the board maybe a few dabble in it. I'm not a huge Dave Ramsey fan, but many of his teachings are sound. Yet all you hear about is people in debt over n over, avoiding debt is the first step to saving.

 

[PollyannaMom]

Anyone who gets a paycheck can save. It may not be a lot, but every dollar counts. Many Americans could save much more if they did not have expensive cell phones, cable TV, high car payments on a car they cannot afford, etc. Savings should be a priority. But too many people depend on credit cards to get them the things they want in addition to the things they need, because they never saved a penny for a rainy day. Saving should be taught early, when a child begins getting an allowance or does little jobs for neighbors, etc.

I like your advice for teaching saving early! My DS saved part of his allowance when he was little, and it did set up good habits.

I also agree that many people abuse credit, and get buried in unnecessary debt.

But I think we need to be careful of generalizing too much. Sure, more people could save something, but I think the level of savings we’re talking about in this thread is actually beyond a lot of people.

 

[Donald13]

Not surprising. The Dis isn’t the average American. What’s surprising to me is how many people on here can’t fathom that people are poor and can barely make ends meet so saving for retirement isn’t a priority when they’re worrying about buying groceries.

Not everyone who lives paycheck to paycheck has cable or an iPhone or a car payment or go on vacation. Some people live paycheck to paycheck and barely make it. That’s real life for a big portion of the population.

Have we seen the single parent statistics? When I was a single mom I did not save for retirement. I couldn’t afford it. We also didn’t vacation or eat out and I didn’t have an iPhone. I did have a car payment but that was because the car was almost paid off when we divorced and I would’ve been worse off if I sold it and tried to buy something cheaper.

agreed. Also it’s the internet so anyone can say anything So I take each with a grain of salt. *que the “well I DO have 8 mil saved for retirement*

 

[MrsPete]

Anyone who gets a paycheck can save...

If you change that to "Most anyone", I'll agree. MOST people have SOME fat in their budget, and MOST people underestimate the importance of saving.

... Our school system is the second issue, we don't teach personal finances now ...

False. Personal finance IS taught in school; it doesn't seem to "stick" because it seems like a vague, academic concept to young people who aren't yet using that information. It's a topic that's more likely to "seem real" if parents teach it at home; that is, if it's connected to the family's real grocery shopping, etc.

 

[Donald13]

Anyone who gets a paycheck can save. It may not be a lot, but every dollar counts. Many Americans could save much more if they did not have expensive cell phones, cable TV, high car payments on a car they cannot afford, etc. Savings should be a priority. But too many people depend on credit cards to get them the things they want in addition to the things they need, because they never saved a penny for a rainy day. Saving should be taught early, when a child begins getting an allowance or does little jobs for neighbors, etc.

Statements like these is why most people don’t post on financial threads. This makes a lot of assumptions. If you can save, good for you. But don’t say “everyone who gets a paycheck can save”

 

[Starport Seven-Five]

Anyone who gets a paycheck can save. It may not be a lot, but every dollar counts. Many Americans could save much more if they did not have expensive cell phones, cable TV, high car payments on a car they cannot afford, etc. Savings should be a priority. But too many people depend on credit cards to get them the things they want in addition to the things they need, because they never saved a penny for a rainy day. Saving should be taught early, when a child begins getting an allowance or does little jobs for neighbors, etc.

If you take the bolded back a peg you will probably not get as much resistance. There is certainly a priority issue with most Americans but there are also people who make minimum wage and realistically have nothing left after necessities (food and shelter necessities, not cable/iphone "necessities"). Saying "anyone" gives an easy copout as it's easy to disprove.

False. Personal finance IS taught in school; it doesn't seem to "stick" because it seems like a vague, academic concept to young people who aren't yet using that information. It's a topic that's more likely to "seem real" if parents teach it at home; that is, if it's connected to the family's real grocery shopping, etc.

I feel like a lot of the issue is it's explained (in my experience at least) as being able to balance a checkbook and saving for retirement that is 40+ years away. Nowhere was it discussed how having a few grand in savings makes life much much easier or the impact of compound interest at double digit rates. Then you get hit with marketing and all these pictures of "success" from social media and it's a battle of how quick a person can achieve the image of success.

Every high schooler would benefit greatly from reading a book like the Millionaire Next Door to recalibrate their mental image of what "success" looks like. The guy down the street with a modest house and car might have an exponentially higher net worth than their favorite instagram influencer.

 

[kymom99]

Think about the fact that someone with a modest income may be constantly saving to replenish their emergency fund. They save and then have to use the savings. So they start over again.

 

[tvguy]

I assume you have lead a VERY fortunate and shelterd life.. You are so wrong here.

I agree with @MrsPete. "most people" might be a better term. But @NannyBeBe is mostly correct. Just talk to credit counselors. Most people with financial problems have them because of their own bad money decisions. The show Til Debt Do Us Part with Gail Vaz-Oxlade really highlighted this. You don't NEED to spend hundred of dollars a month on clothing. You WANT to spend hundreds of dollars a month on clothing. And getting people to recognize the difference between needs and wants is the key.
Of course emergency medical expenses and the like are a different story. But most of these people are not in that situation.
I learned a lot from my parents who lived through the depression about making a penny scream. But when I got out of college the janitor at the first TV station I worked at was a master of money management. He only had an 8th grade education, and never made much more than minimum wage, but he wasn't afraid of hard work and side gigs. Need your gutters cleaned out? $20 he would come out and do it. Going out of town for a couple of weeks? He's come over and cut your lawn for extra cash.
He bought a small piece of land for cash and built a house on it by my himself. He bought his cars new, paid cash for them, and kept them 30 years.
And the part that always amused me, there was one anchor making well over $100,000 a year who used to come up short of cash between paychecks and he would lend her money.

 

[Starport Seven-Five]

Think about the fact that someone with a modest income may be constantly saving to replenish their emergency fund. They save and then have to use the savings. So they start over again.

If you are dipping into an "emergency fund" often your budget has missing line items. Water heaters break, roofs need replacing, and car insurance is due every 6 months. Those aren't emergencies.

 

[tvguy]

If you are dipping into an "emergency fund" often your budget has missing line items. Water heaters break, roofs need replacing, and car insurance is due every 6 months. Those aren't emergencies.

Yup. I replaced my water heater 21 years ago, so I have had 21 years to save for a replacement. My Heat Pump is 30 years old so I have had 30 years to save for a replacement. Those items could die today, or last for decades. I have an account at the credit union for those type situations. When they fail, getting them replaced will be the hard work, not paying for it.

 

[disneyseniors]

I've read through some of this interesting thread and have a few thoughts.
We are in our 70's and started investing later in life.
You need to know that what you need now verses what you will need in later years will vary. What we though was enough for retirement in today's world is not enough. We've had to readjust things and are ok now. If you are going to put x amount in for retirement with growth/income in mind at say 40's. What you will get in your 70's might not be enough for that time's requirements. I hope you can make sense of that For example: My Mom who is 93 worked as a medical secretary all her life and made around $3.50 to 4.00 an hour. When social security got figured when it was time, she doesn't get much at all. Back then, that was the normal wage you made. Over 7 dollars was high wages. So it's all relative.
If you are working, the Roth IRA is your friend. You can remove money, any time and any amount, without penalty!

We have everything paid off, car, house, etc. The property taxes where we are at are huge, but there is nothing we can do about that.

Our kids are saving for their kids college educations, and trying to save for their retirement while both are working full time. (though with reduced hours due to covid What with everyday expenses I don't know how they can do it.

 

[NannyBeBe]

I assume you have lead a VERY fortunate and shelterd life.. You are so wrong here.

My life has been far from fortunate and sheltered. I have lived in great poverty with newspaper in my shoes to cover the holes and $12 per week for food. I was able to pay my bills from the money we received as wedding gifts. I have come a long way and am grateful for it. My husband worked 12-hour days for 40 years, never asking anything for himself and saving all that we could so we could help others in need and live debt free.
I stand by what I said.

 

[mefordis]

I can see them paring back some benefits to those who have a nice sized nest egg so they can provide a living to those who have not saved anything We can't have elderly out on the street. My husband and I don't even factor in social security for our retirement planning because it probably won't be there in 15-20 years for those who have a decent savings.

 

[kymom99]

If you are dipping into an "emergency fund" often your budget has missing line items. Water heaters break, roofs need replacing, and car insurance is due every 6 months. Those aren't emergencies.

What constitutes an emergency then?

 

[RamblingMad]

Retirement options other than pensions fail for most people. Stagnant wages for decades hasn't helped people grow their wealth.

We're a great country to invest in because people are so willing to be exploited here.

 

[RamblingMad]

What constitutes an emergency then?

Let me help out this conversation. An emergency is money that needs to be spent that your monthly paycheck can't absorb. Obviously, if you lose your job, your emergency fund needs to handle the monthly stuff as well. Most people don't have large enough emergency funds because they're not paid enough.

 

[kymom99]

Let me help out this conversation. An emergency is money that needs to be spent that your monthly paycheck can't absorb. Obviously, if you lose your job, your emergency fund needs to handle the monthly stuff as well. Most people don't have large enough emergency funds because they're not paid enough.

Exactly. Many people cannot save for every potential emergency, myself included. So many don’t have a real picture of what it’s like to truly live paycheck to paycheck. Put aside $500 for emergencies then the car breaks down. Start over.

 

[barkley]

False. Personal finance IS taught in school; it doesn't seem to "stick" because it seems like a vague, academic concept to young people who aren't yet using that information. It's a topic that's more likely to "seem real" if parents teach it at home; that is, if it's connected to the family's real grocery shopping, etc.

i wish that was the case where i live but i know for a fact it's not. in 2016 a law was passed requiring financial literacy be taught in our public schools, and prior to covid turning everything upside down the state/schools were still going back and forth on how to implement it. a survey in 2018 conducted by the state board of education showed only 31% of the state's districts are doing it in any manner-and of those only 13% require students to take the subject. at least that 31% is offering it-when my kids went to high school pre 2016 they had restructured everything into a strictly college prep curriculum so most of the classes that touched on budgeting, finance and the like were pretty much off the table-EXCEPT for the special ed kids; my youngest got extensive financial education through his 'life skills' classes that my oldest and many of her classmates would have taken as elective in a heartbeat if given the opportunity.

What constitutes an emergency then?

to my way of thinking it's something unanticipated that i can't really plan for. i budget a certain amount each month for maintenance and upkeep so a repair or replacement of even a higher cost household item is usually able to be met in full-but something like having to pay my car or homeowner's deductible, an unanticipated large medical copay or share of cost-that would be something from the 'emergency fund'.

 

[disneychrista]

If you are dipping into an "emergency fund" often your budget has missing line items. Water heaters break, roofs need replacing, and car insurance is due every 6 months. Those aren't emergencies.

What is an emergency then? If my water heater goes out, my washer breaks, etc the money to pay for it's replacement is going from savings, not my monthly budget. In my monthly budget is an amount that goes into savings.