Average retirement savings

[teller80]

I was looking into the best age to claim Social Security when it mentioned that the average American in their early 60s has $172,000 in their retirement account according to Transamerica, $182,000 per Fidelity or $221,000 per the Federal Reserve. That doesn't seem right, does it? I couldn't tell if that was per person or per household.

Is there anyone with good Google skills that could verify or disprove what I saw? I was under the impression that the goal was 10x your income, or one to two million, are we that far behind?

 

[kanerf]

Nope, it really is that bad for many folks.

 

[mrodgers]

Think like working class. You're not going to have a couple of million if you're making the median income.

Divorce also takes a toll on your retirement. I figure I will die climbing on equipment for a material changeover at work. Not sure how I'm going to do it in my 70's (If I thought I'd make it that far.) Heck, before retirement, I need to get into a house again. I hope to do that by 70, then I can start thinking about saving for retirement.

 

[design_mom]

I don't have info to prove or disprove that statistic, but I heard an equally scary one. It was that a large percentage of Americans (I don't remember the exact number, but I think it was upwards of 40%) would have trouble coming up with $400 if they needed it in an emergency.

If that's the case then I'm pretty sure those people are not saving a lot for retirement. I guess it's very easy for us (me included) to take for granted how good we have it. (We're not wealthy by any means but I'm not worried about where my next meal is coming from, we're saving towards retirement, and we have emergency savings... so all-in-all we're doing well.)

 

[PollyannaMom]

We just did some consolidating of our various 401Ks from different jobs over the years, and came off feeling OK about where we are. - But I also know we've had a lot of lucky circumstances to get there! It doesn't really surprise me that many people are quite behind where they'd like to be.

 

[tvguy]

Those numbers do seem in line with what I have seen over the years. And yes, as a 63 year old who has never earned more than a middle class salary but always managed to put 15% of my paycheck plus the 3 or 4% company match away in a 401k I find that hard to believe. And I also do not agree with some on the DIS who believe $150,000 is a middle class salary for an individual. My wife and I have both worked full time for over 40 years and in no year was our combined gross salary anywhere near that level.
People don't, say they can't, or think they can't save money. I disagree, but as they say your mileage may vary.
Having said that, the Estate Planning software that both my Financial planner and CPA use (different software) has a default setting of $1 million in the 401k/IRA column.

And my full retirement age is 66 1/2 and my social security benefits will be within $300 a month of my current take home pay working. And since my car payment of $500 a month will be gone by then, I will be money ahead. Always wonder why people say they struggle on just social security.

I do know that my wife before we got married put $1,500 a year into an IRA for three years. 40 years later that money has grown to over $60,000, so it doesn't take a lot of money over 40 years to have a lot of money, you just have to find ways to put the money away.

 

[AlohaNow]

Think like working class. You're not going to have a couple of million if you're making the median income.

This. Don't think DISboards people, who have disposable income to travel. Think about the average American. Those numbers are certainly correct.

 

[sk!mom]

Look at the shrinking middle class figures and the percentages of those considered to be working poor and I think you’ll see that those stats are easy to understand. Many people have little to nothing saved.

 

[ronandannette]

Question: Do Americans have mandatory contributions to the government pension plan (social security I think you call it) deducted from their paycheques?

 

[sk!mom]

People don't, say they can't, or think they can't save money. I disagree, but as they say your mileage may vary.

I’m sorry but this is a comment coming from privilege. I urge you to look into it. The shrinking middle class is a growing problem. Many many people struggle to keep a roof over their heads. Saving for retirement is the last thing on their minds.

The pandemic has magnified the problem. Have you seen the lines at food distributions? Many people who already struggled in low wage jobs will need years to climb out of this. And you think they “say they can’t” save for retirement?

 

[sk!mom]

Question: Do Americans have mandatory contributions to the government pension plan (social security I think you call it) deducted from their paycheques?

Yes,

 

[NannyBeBe]

My husband and I are elderly and we feel we have enough saved for the rest of our lives.
The best advice I could give younger people who are still working is to do all they can to be debt free when they retire. Make a mortgage payment or car payment every three weeks instead of once a month. Save at least 10 percent from every paycheck. It will build up. Don't use credit cards unless you can pay them off in full every month. This may sound impossible or difficult, but believe me, when you are in your 70s and can lay your head down at night knowing that you owe no one except the tax man, it will all be worth it.

 

[hertamaniac]

To me, it is also about debt load at retirement. If you can be 100% debt free, including your home, then the money to sustain yourself becomes less of a burden.

 

[Pea-n-Me]

Those numbers do seem in line with what I have seen over the years. And yes, as a 63 year old who has never earned more than a middle class salary but always managed to put 15% of my paycheck plus the 3 or 4% company match away in a 401k I find that hard to believe. And I also do not agree with some on the DIS who believe $150,000 is a middle class salary for an individual. My wife and I have both worked full time for over 40 years and in no year was our combined gross salary anywhere near that level.
People don't, say they can't, or think they can't save money. I disagree, but as they say your mileage may vary.
Having said that, the Estate Planning software that both my Financial planner and CPA use (different software) has a default setting of $1 million in the 401k/IRA column.

And my full retirement age is 66 1/2 and my social security benefits will be within $300 a month of my current take home pay working. And since my car payment of $500 a month will be gone by then, I will be money ahead. Always wonder why people say they struggle on just social security.

I do know that my wife before we got married put $1,500 a year into an IRA for three years. 40 years later that money has grown to over $60,000, so it doesn't take a lot of money over 40 years to have a lot of money, you just have to find ways to put the money away.

I’m sorry, but the bolded is tone deaf, IMO. Not everyone has the same situation as you and your wife.

 

[tvguy]

I’m sorry but this is a comment coming from privilege. I urge you to look into it. The shrinking middle class is a growing problem. Many many people struggle to keep a roof over their heads. Saving for retirement is the last thing on their minds.

The pandemic has magnified the problem. Have you seen the lines at food distributions. Many people who already struggled in low wage jobs will need years to climb out of this. And you think they “say they can’t” save for retirement.

It could be from privilege, or it could be we need to educate people on the importance of saving even just a little money. If you saw my paycheck, I think you would agree privilege does not apply. And I'm not sure how to gauge the pandemic. My income is up because of the stimulus check, and the unemployment benefits I got while furloughed. Benefits that were greating than I would have made working.

 

[tvguy]

I’m sorry, but the bolded is tone deaf, IMO.

Why?

 

[mjkacmom]

Those numbers do seem in line with what I have seen over the years. And yes, as a 63 year old who has never earned more than a middle class salary but always managed to put 15% of my paycheck plus the 3 or 4% company match away in a 401k I find that hard to believe. And I also do not agree with some on the DIS who believe $150,000 is a middle class salary for an individual. My wife and I have both worked full time for over 40 years and in no year was our combined gross salary anywhere near that level.
People don't, say they can't, or think they can't save money. I disagree, but as they say your mileage may vary.
Having said that, the Estate Planning software that both my Financial planner and CPA use (different software) has a default setting of $1 million in the 401k/IRA column.

And my full retirement age is 66 1/2 and my social security benefits will be within $300 a month of my current take home pay working. And since my car payment of $500 a month will be gone by then, I will be money ahead. Always wonder why people say they struggle on just social security.

I do know that my wife before we got married put $1,500 a year into an IRA for three years. 40 years later that money has grown to over $60,000, so it doesn't take a lot of money over 40 years to have a lot of money, you just have to find ways to put the money away.

$150,000 is literally middle class where I live, 10 miles west of NYC. Fortunately my husband is a CFP and our retirement looks solid. Yearly vacations were not a thing here, and we only bought one new vehicle out of necessity (2003 Honda odyssey when our twins were born, the only minivan at the time with 5 shoulder belts).
According to Rutgers University economist James Hughes, "middle class" can mean many things these days. But “somebody earning $60,000 in New Jersey would really be struggling to say they’re in the middle class.”

Hughes pointed out that not too long ago, “middle class meant that you could live a good life and only have one spouse working. Today, to be middle class, it really takes two working spouses.”

He said the amount of income needed in New Jersey to be considered part of the middle class is higher than in most other parts of the nation because of our sky-high housing costs.

“This includes the actual price of housing and the cost of living in the housing: property taxes, insurance and utilities," he said.

He said a family earning $190,000 a year in parts of North Jersey may sound like a small fortune to some, but “housing costs are extraordinarily high the closer you get to New York City."

According to the Pew Analysis, 52 percent of adults in the United States live in middle class households. In North Jersey, 48 percent of households are middle class. And in Central Jersey, 50 percent of families are in the middle income bracket.



Read More: Are you middle class? Depends where you live in NJ | https://nj1015.com/are-you-middle-c...in-nj/?utm_source=tsmclip&utm_medium=referral

 

[barkley]

This. Don't think DISboards people, who have disposable income to travel. Think about the average American. Those numbers are certainly correct.

i suspect there are a good number of dis board participants that are in the same boat retirement savings wise. it only takes reading threads on the dis budget board to realize that many of the vacations people post about are not paid for with disposable income but done either with credit cards they consider the monthly payments for years on end as a normal budget item, or paid for with 'vacation savings' which are significant chunks of money they set aside each month at the expense of shortchanging funding emergency savings, retirement and other vital expenses (when someone is posting of their concern on how they will pay for a less than $1000 emergency household expense and then shares that their normal monthly budget includes several hundreds of dollars earmarked as 'vacations' it's evident that people have different priorities with their spending that may end up biting them in the butt come retirement).

 

[Pea-n-Me]

Why?

I added an answer to your question, but again, because not everyone’s situation is the same as yours. Many people struggle when getting just social security, because they don’t have a home that’s paid for, or money in the bank, or the ability to work, or health issues, or a lot of other struggles. I’m glad that things have worked out well for you, and you deserve credit for that, but it‘s not the case for everyone.

 

[tvguy]

$150,000 is literally middle class where I live, 10 miles west of NYC. Fortunately my husband is a CFP and our retirement looks solid. Yearly vacations were not a thing here, and we only bought one new vehicle out of necessity (2003 Honda odyssey when our twins were born, the only minivan at the time with 5 shoulder belts).
According to Rutgers University economist James Hughes, "middle class" can mean many things these days. But “somebody earning $60,000 in New Jersey would really be struggling to say they’re in the middle class.”

Hughes pointed out that not too long ago, “middle class meant that you could live a good life and only have one spouse working. Today, to be middle class, it really takes two working spouses.”

He said the amount of income needed in New Jersey to be considered part of the middle class is higher than in most other parts of the nation because of our sky-high housing costs.

“This includes the actual price of housing and the cost of living in the housing: property taxes, insurance and utilities," he said.

He said a family earning $190,000 a year in parts of North Jersey may sound like a small fortune to some, but “housing costs are extraordinarily high the closer you get to New York City."

According to the Pew Analysis, 52 percent of adults in the United States live in middle class households. In North Jersey, 48 percent of households are middle class. And in Central Jersey, 50 percent of families are in the middle income bracket.



Read More: Are you middle class? Depends where you live in NJ | https://nj1015.com/are-you-middle-c...in-nj/?utm_source=tsmclip&utm_medium=referral

Yes, there are exemptions. And a $1 million dollar home in New Jersey would cost about $100,000 in a place like Laurel, Mississippi.