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Working Americans Have Almost No Retirement Savings

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CNN Money reported last week that 43% of Americans have less than $10,000 in retirement savings, which is a statistic provided by the Employee Benefit Research Institute in their Retirement Confidence Survey (2010 results). If that figure isn’t scary enough, it appears that 27% of workers have less than $1,000. Both figures are increases from 2009, when 39% had less than $10,000 and 20% had less than $1,000 a year ago.

While the statistics are sobering, it does show how much the recession has hurt a lot of people. If you lose your job, the first thing to go after your emergency fund is probably going to be your retirement savings. Keeping a roof over your head and food in your stomach is going to take precedence over retirement tomorrow.

If you dig a little deeper in the statistics, you get a little more color on the situation and it’s not a good one. 56% of workers between 25 and 34 have less than $10,000 in savings, 46% between 35-44, 38% between 45-54, and a mind boggling 29% of workers over 55 have less than ten grand in their retirement savings. (on the other side, it’s pretty amazing that 10% of workers between 25 and 34 have over $100,000 in retirement savings, so it’s not impossible, which totally blows away both my expectations and what we know about average retirement savings)

If you’re one of the ones with less than $10,000 in retirement savings, don’t despair because 43% of Americans are there with you. We’re going through some tough times now but once we get back on our feet, retirement savings has to become a priority. Social security and other entitlement programs aren’t going to be here forever. It’s only a matter of time before they are replaced as defined benefit (pension) retirement plans are being replaced with defined contribution (401k) retirement plans (Math doesn’t care which political party’s name is written on your voter card, the current system is not sustainable).

If you’re in better shape, excellent, congratulations but don’t pat yourself on the back just yet. Share your tips with your working friends so that we can come back in five years and talk about how great it was we reversed the trend. We’re not getting many incentives to save for the future, just look at CD rates if you need a reminder, but that doesn’t mean we shouldn’t do it.

43% have less than $10k for retirement [CNN Money]

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113 Responses to “Working Americans Have Almost No Retirement Savings”

  1. taughttosave says:

    30/30/30/10
    30% to live living expenses
    30% to save for retirement
    30% for the big unexpected stuff
    10% rewards for doing the above

    Have done this since my first job. If our stupid politicians don’t destroy our financial markets in the next few years, I’m set to retire.

  2. Oman says:

    One thing perhaps I missed here in the discussion? I suspect if we could look at the actual total assets of the sample group here we would be even more concerned. Despite even having a healthy retirement savings, debt needs to be part of the equation when considering preparation for what’s next. I believe I heard on NPR a couple of years ago that 60% of baby boomers who are facing the end of their 45 year working career have less than $500 in total assets. It would seem to me that American society must recognize this. It will become self evident.We need to understand that it matters not why we are where we are, but what do we do about it. There is enough blame to share in every direction.

  3. Bob says:

    You can survive if you have $100.000 ,a pension, social security and no major bills. Just the two of you of course.

    Go to McDonalds , steak and shake , Hardees most of the time. Stay away from expensive resturaunts for fashionable meals.

    • Robert says:

      You are so right. Live frugally, it works.

    • Mr.H says:

      Most people dont have pensions and divorce rates mean only 1 social security check. I know many people who worked well into their 70s because of divorce and/or bankruciesleaving them with under 50k

  4. Mark @ Marocava.com says:

    Great article. I have found that most people are unwilling to put forth the extra effort it takes to save however. Most say they have no time, or no money to get anything else started. I put about 6 hours a week into an additional income stream for the future. The key is to make sure you diversify your income streams.

  5. DRB says:

    I learned along time ago from a college professor, that if you want to ever have anything, you need to find something more to sell then just your time.

    I started investing in funds and stocks in my early 20′s. I was surprised how even int the mid to late 70′s, how many people I talked to that did not have an investment that would pay them as little as $100.00 a month.

    For a long time it seemed like the last thing a company needed was for me to buy their stock. But even a blind hog finds a root once in a while.
    Don’t give up.


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