Many Americans Have No Retirement Article

vlagrl29 · May 2015

Thought this article would be for good discussion here. I couldn't imagine never saving or planning for retirement. My parents and DH's parents plan on retiring at age 67. Even on days where I feel we are living paycheck to paycheck I have to remind myself that we are putting money away for retirement and savings. A link of the article is below:

http://www.reuters.com/article/2015/05/27/usa-economy-retirement-idUSL1N0YI1E420150527

May 27 (Reuters) - Many Americans are not financially prepared for retirement, with almost a third of working adults without savings or a pension, according to a Federal Reserve survey published on Wednesday.

The Fed's 2014 Survey of Household Economics and Decisionmaking found that about 38 percent of the more than 5,800 respondents have either no intention to retire or plan to keep working for as long as possible.

"Thirty-one percent of non-retirees have no retirement savings or pension, including nearly a quarter of those older than 45," the Fed said.

"Even among individuals who are saving, fewer than half of adults with self-directed retirement savings are mostly or very confident in their ability to make the right investment decisions when managing their retirement savings."

The survey, which was conducted in October and November last year on behalf of the Fed board, also found that among lower-income respondents, whose household income is less than $40,000 per year, 55 percent plan to keep working as long as possible or never plan to retire.

It found a modest improvement in individuals' perceptions of financial well-being compared to 2013, though their optimism about future financial prospects increased significantly.

Sixty-five percent of respondents viewed their families to be either "doing okay" or "living comfortably" financially, a 3 percentage points increase from the 2013 survey.

Twenty-nine percent expected their income to rise this year, up from 21 percent in the 2013 survey.

Still, the finances of many families are shaky. Only 53 percent of respondents said they could cover a hypothetical emergency expense costing $400 without selling something or borrowing money.

"Thirty-one percent of respondents report going without some form of medical care in the past year because they could not afford it," the Fed said. (Reporting by Lucia Mutikani; Editing by Andrea Ricci)

noffgurl · May 2015

DH's Dad is the only one I know of in our families to ever have a retirement account besides us now.

vlagrl29 · May 2015

I mean at a certain point a person can't really work anymore. You get older and maybe need to be in a retirement/nursing home - then what do you do?

noffgurl · May 2015

So far what I've seen in my family is S.S. [which I don't think would be around much longer]; S.S.I.; kids; rental home; and their own business.

AprilZ81 · May 2015

I consider myself to be an intelligent person and articles like that make my head spin. They just start spitting out percentages and statistics with very little explanation about how they arrived at those numbers.

I tend to agree with the article that a lot of Americans are not doing anything (or enough) to prepare for retirement, but a lot of times authors tend to look only at traditional retirement accounts (IRAs, 410(k), pensions, state sponsored plans, etc.). They don't count mutual funds, general stock purchases, money in savings accounts (which of course isn't making any money), real estate (rental income or those who plan to sell their primary residence and downsize) or other non-traditional "retirement" savings.

Xstatic3333 · May 2015

I definitely agree with April that articles like these tend to skew the numbers quite a bit, but this issue is one that has been on my mind lately since we learned that H's mom has nothing saved for retirement. She is married and they own their home outright, but I am not sure if she would inherit much from her husband since he has grown kids and grandkids that are the apple of his eye. She did just start in a state job, so if she can work 10 more years there is the hope of a pension, but sadly her health is already not so great. We're pretty sure the same is true of his dad and stepmom since they have been through a foreclosure and near bankruptcy. They got a great deal on a resale modular home in FL, however, and should be okay as long as they can handle their HOA fees.

We're both onlies and struggling with what to do, what our responsibility will be, etc. We don't want to leave anyone hanging, but also want to keep saving so that our kids won't have the same thing to worry about.

smerka · May 2015

I am scared for the baby boomers. I believe a lot of them have no money set aside for retirement either in traditional retirement accounts or elsewhere. They think SS will be there to maintain their lifestyle, but that is not what SS was designed for. It is to keep people off the streets in their old age.

jessica490 · May 2015

It's really too bad people aren't saving enough for retirement. I'd rather save as much as I can, retire early and have enough to play with and enjoy the last active years of my life before old age really starts kicking in.

I'm glad I had good role models growing up and started saving early. My in-laws struggle as it is and I know they won't have a lot for retirement...so I'm not sure how that's going to play out.

als1982 · May 2015

I have to believe it. My H and I, seeing how others around us live (new cars, big houses, always buying new clothes, etc.) always wonder how they do it. My guess is no savings, debt or both. I'd much rather work hard now and save as much as I can and then when kids come and we get older, we have much more flexibility to adjust our lifestyle. I think many of our peers are going to hit an "oh crap" point in their 40s which will be eye-opening. I'm also very worried, mostly for my marriage, when the time comes that my FIL needs help. He has zero savings and debt even in his 60s all because of terrible choices (some of which were/are even illegal). I'm going to have a really hard time agreeing to help him since his situation is completely his own fault. We believe MIL and SFIL have some savings, but I'm not sure it's going to provide for them at the level they are expecting. Fortunately, my mom is a millionaire, if not several times over.

formerlyGDaisy09 · May 2015

I feel fortunate that my parents have planned and saved for their retirement. However I do fear that H's parents have not adequately planned for their retirement. H's parents are young, his mom is 50 and dad is 53, I think. However, his dad reitred on his pension from working in law enforcement last year, and that is the only retirement the two of them have to live on.

They moved south and are living with H's grandfather because they have nothing in savings to purchase a home until they sell their home here. We get weekly phone calls asking for advice or help with the house, which is a dump and will never sell at the price they think it's worth. Neither of H's sister's have financial legs to stand on. one is an unemployed single mother also living with H's parents and grandfather, the other has a family of 5, she and her H work part-time for minimal pay and can only afford to "rent" h's parent's home for the cost of the taxes on it.

We've already become the ones "parenting" H's parents, telling them they need to set boundaries for the sisters. tell the one she needs to find a job and tell the other that the rental arrangement of the house is not working and the house is going on the market, and they better be prepared to move if it sells. both sisters are burried in credit card debt, I just hope H's parents can manage on the pension and figure out a way to buy a home.

bridejl · May 2015

I don't know how much my parents have saved for retirement, but they are very smart with their money so I have no doubt that they will be set.

My IL's, on the other hand, worry me. My MIL has 'borrowed' from her 401k early to pay bills and I doubt there was much in there in the first place. She's buried in credit card and new medical debt, but keeps paying for cable with extra channels. As a PP said, her financial problems are largely of her own doing and H and I are increasingly hesitant to help financially until she puts forth an effort to help herself. She's 'joked' that she won't be able to retire, which is likely true. I'm worried about what will happen when she retires/isn't able to work anymore.

Xstatic3333 · May 2015

Sounds like a lot of us are in the same boats with our inlaws :-/ Has anybody had the SO bring up long term care insurance? This has been on my mind since mine are in their late 50s and approaching when it would make sense to buy it. In our case their situation isn't the result of any gross irresponsibility, just a lack of knowledge and assumption that SS would be enough combined with some bad luck in the housing market, so I'm not opposed to helping a little as long as we're still saving enough for ourselves.

als1982 · May 2015

Xstatic3333 said:
Sounds like a lot of us are in the same boats with our inlaws :-/ Has anybody had the SO bring up long term care insurance? This has been on my mind since mine are in their late 50s and approaching when it would make sense to buy it. In our case their situation isn't the result of any gross irresponsibility, just a lack of knowledge and assumption that SS would be enough combined with some bad luck in the housing market, so I'm not opposed to helping a little as long as we're still saving enough for ourselves.

We've looked into it and priced it out, but considering age and health, he couldn't afford the $190 a month price tag and I'm not willing for us to pick up the cost.

Edited with corrected cost, which covers $3,000 a month for 3 years.

brij2006 · May 2015

My FIL is part of this stereotype. He has a small amount invested (about $20k, he's 53), and he's borrowed $15k against it. He thinks his kids will take care of him. There he is with his $50k in cars (both with loans), a house nicer and newer than ours (mortgaged to the gills), and a nice shiny Harley (financed too). Yet he thinks we're going to take care of him. My H has said that he'll be damned if he takes care of him when he hasn't made an ounce of sacrifice to get himself to retirement, and here we are cutting cable, driving beater cars, and going nowhere so we can live a life with no debt and plenty in retirement.

We're very very close with FIL and see him at least 3 times a week. However, H has said that he'll let him live in poverty before he steps in to help him in retirement. He needs to understand the consequences to what he's doing. We try to talk to him about it, and he flat out says "well you guys will take care of me." We tell him that we have to take care of ourselves first, so he better not rely on us.

Then on the other end of the spectrum; MIL will live comfortably in retirement, and will leave us a good chunk. Then my parents are worth a lot and will be leaving a large legacy to me. Both of them have said they will write us out of their will if we ever help FIL. That's sad.

Oh, and the other day FIL was complaining about his debit card being declined for NSF at the gas pump. Yet he said it was SMIL's fault because she paid bills. Seriously? I just don't get it.

*Side note: He's filed bankruptcy 3 times in his life. Once as a single person, once when he was married to MIL, then the 3rd time while married to SMIL. When I started dating H, he mentioned they had $80k in credit card debt. A year later they filed for bankruptcy for the 3rd time.....Obviously bankruptcy has taught him nothing. Except that your credit score is perfect right afterwards.

smerka · May 2015

My inlaws are very religous. All of their financial plans revolve around the idea that God will take care of everything. For a long time they were helping DH's idiot brothers. I think when one asked for grocery money and then left for a trip to Disney World, they finally stopped. At this point I don't care if we inherit anything from them(DH's grandma left the kids a big chunk of money, but the inlaws are blowing through it). I just don't want to have to help them because we aren't in a position to do so.

vlagrl29 · May 2015

good gawd @brij2006 - that's so crazy! How irresponsible is he to assume his kids will take care of him when he should be taking care of himself. The others shouldn't be talking about will write offs - that's just silly.

brij2006 · May 2015

vlagrl29 said:

good gawd @brij2006 - that's so crazy! How irresponsible is he to assume his kids will take care of him when he should be taking care of himself. The others shouldn't be talking about will write offs - that's just silly.

He's a peach. He actually is a pretty nice guy and has helped us with the entire remodel of our house. However, he tries constantly to give us financial advice, and is always giving his 2 cents on every aspect of our lives (including me giving breast milk to our daughter). He really just doesn't know where to mind his own. We have actually had them take a deposit to our bank for us before, in an envelope. The bank put the receipt back into the envelope and gave it back to them. They opened the envelope and read the balance on our bank account from it. He later then made a comment to us about having a lot of money, and that we need to live a little more because we can afford it. Hello, we have that money in there because we don't spend like crazy. Him and SMIL will never be trusted again.

We have also discussed writing him out of our will and flat out telling him that. He will get absolutely nothing upon our death until he straightens his crap out.

vlagrl29 · May 2015

You totally shouldn't put him in your will, he would spend it in a day! My cousin is the same way -always asking my grandma for money and filed bankruptcy twice.

This article and post inspired me to log into my fidelity account and research some funds I'm low on in my portfolio. Gonna make some more investing this next week

MommyLiberty5013 · May 2015

Back when I worked in banking and had to take the CO insurance exam (all this was on my mind for ILs and parents), I began talking with my parents about long-term care insurance. Dad agreed. They have it and have had it for a few years.

My parents have no debt and own their home outright. They have plenty saved for retirement and both will get SS plus, both lucked out at will get pensions!

ILs are set with savings and farm income. Their homes are paid off and so are their cars. Zero debt also.

blondie42107 · May 2015

als1982 said:

Xstatic3333 said:
Sounds like a lot of us are in the same boats with our inlaws :-/ Has anybody had the SO bring up long term care insurance? This has been on my mind since mine are in their late 50s and approaching when it would make sense to buy it. In our case their situation isn't the result of any gross irresponsibility, just a lack of knowledge and assumption that SS would be enough combined with some bad luck in the housing market, so I'm not opposed to helping a little as long as we're still saving enough for ourselves.
We've looked into it and priced it out, but considering age and health, he couldn't afford the $190 a month price tag and I'm not willing for us to pick up the cost.

Edited with corrected cost, which covers $3,000 a month for 3 years.

Most long-term policies aren't really worth buying. Average nursing home care cost is $7000/month in my area. Average assisted living in my area starts out at $3000/month. Medicare (and supplemental insurance) does not cover long-term care services (only skilled care and there are limits). Assisted living is primarily private pay.

I work with the aging population and majority of them rely solely on Social Security. A chunk of them have pensions but most are pretty small. Other investment options just weren't popular or not available back then, like they are today. Also women aged 70 and older - most of them really didn't work outside of the home so they collect Social Security off their spouse and it's a lesser amount.

hoffse · May 2015

My parents are going to be fine. I have no concerns with them, and I will likely inherit quite a bit from them. I don't want it, but I'm an only and they aren't as into charitable giving as I wish they were.

I'm concerned about my H's parents. His mom should be getting a pension from the feds, but it can't possibly be enough to maintain their lifestyle. While H's dad is pretty conservative, I think he also has the euro mentality that the state is supposed to take care of you in your old age. He doesn't understand why the US doesn't do some of the things that the French do, for example.

Honestly, this is one thing H and I haven't talked about much. I don't think my inlaws will ask for help, but if they did I think H would have a hard time saying no. I have no inclination to help them though.

abrewer5 · June 2015

This all really hits home for me. My parents are not set up for retirement at all. They've always lived pay check to pay check and my mom has worked multiple jobs for as long as I can remember. None of my parents (divorced/remarried) are really great with money and I think that is a large part of my problem, which is why I'm trying to turn it around do things the right way.

I want the best for my parents but unfortunately, I doubt they'll ever be able to retire. My (step) dad is 60 and not in the best health, but no where near retirement. My mom works 7 days a week at 48 and not any where near retirement either. They could make changes to help themselves now, but they just won't do it. I've tried encouraging them with no luck. It's really unfortunate because they are wonderful people and extremely hard working, so it just makes me sad. They have a lot of debt, and not a lot of income.

I'd love to be able to help them some day, but I'm just not sure what to do.

My in laws on the other hand are set for retirement. They're all high income earners and have some smart investments, so I'm happy for them.

ETA: My parents are not expecting my sister and I to take care of them in retirement. I just don't think they received the guidance needed to make smart financial decisions throughout life, and they've hit some rough patches that have been major set backs to them emotionally/financially.

UncleL1228 · June 2015

formerlyGDaisy09 said:

I feel fortunate that my parents have planned and saved for their retirement. However I do fear that H's parents have not adequately planned for their retirement. H's parents are young, his mom is 50 and dad is 53, I think. However, his dad reitred on his pension from working in law enforcement last year, and that is the only retirement the two of them have to live on.

They moved south and are living with H's grandfather because they have nothing in savings to purchase a home until they sell their home here. We get weekly phone calls asking for advice or help with the house, which is a dump and will never sell at the price they think it's worth. Neither of H's sister's have financial legs to stand on. one is an unemployed single mother also living with H's parents and grandfather, the other has a family of 5, she and her H work part-time for minimal pay and can only afford to "rent" h's parent's home for the cost of the taxes on it.

We've already become the ones "parenting" H's parents, telling them they need to set boundaries for the sisters. tell the one she needs to find a job and tell the other that the rental arrangement of the house is not working and the house is going on the market, and they better be prepared to move if it sells. both sisters are burried in credit card debt, I just hope H's parents can manage on the pension and figure out a way to buy a home.

This is an interesting point to consider...one generation of people who become financially ignorant can negatively affect family dynamics across generations...

And if there is any truth to this article there is great reason to be discouraged. Not only is our country in debt but we now must consider the affects of financial irresponsibility at the individual level.

formerlyGDaisy09 · June 2015

hoffse said:

My parents are going to be fine. I have no concerns with them, and I will likely inherit quite a bit from them. I don't want it, but I'm an only and they aren't as into charitable giving as I wish they were.

I'm concerned about my H's parents. His mom should be getting a pension from the feds, but it can't possibly be enough to maintain their lifestyle. While H's dad is pretty conservative, I think he also has the euro mentality that the state is supposed to take care of you in your old age. He doesn't understand why the US doesn't do some of the things that the French do, for example.

Honestly, this is one thing H and I haven't talked about much. I don't think my inlaws will ask for help, but if they did I think H would have a hard time saying no. I have no inclination to help them though.

H and I are starting to get on the same page about this. He's been of the opinion that when it's family, you just help out, but he's finally starting to see that that doesn't actually help anyone. Something clicked for him when his sister was going through a divorce last fall, she had no money, a toddler and a second child on the way, she asked H for $200 to pay for gas to go to job interviews, she said she would pay us back. H had a check written and was about to put it in the mail. Thanks to help from this board, I managed to convince him to send her $100 in gas cards and to tell her it was a gift (it was right around her birthday, we don't even spend that much on eachother for birthdays, but whatever). We never even got a thank you note, that irked H and has made him start to see that sending family money when they ask for it isn't a great idea.

TravelJunkie1234 · June 2015

This whole thing really hits home for me too. My parents are in their mid 50s and have maybe $10,000 saved up for retirement (I'm being generous here). My mom left the workforce when I was born and never returned and while my dad has a good job and they should be living comfortably most months they barely have anything leftover.

Add to that the very distinct possibility that my parents will be splitting up soon and I'm fairly sure we'll end up taking care of my mom at some point. She's been out of the workforce for so long (almost 30 years) that no one will hire her, and she cashed out her small 401K years ago when my dad lost his job years ago and they were strapped for cash.

I'm so lucky that my in-laws are good with money. They've got plenty saved for retirement and have been an inspiration to help me get my act together. It's a shame that DH's brothers didn't seem to learn anything from their parents--they can barely stay afloat on their own, and while we're all still pretty young, none of them can make it through the month without asking for financial help (especially the oldest who has 4 kids that he and his gf can't afford to take care of). It's hard to say no when you know that the kids are going to be the ones to suffer.

mana8503 · June 2015

My parents will more than likely live with us in the next 5 years. My dad has a pension from the carpenter's local, and SS. My mom is currently on disability for a heart condition. Thank god for ACA so my mom has good insurance, but I think starting this morth she's on Medicare due to the disability. She has about 10k in medical bills from before ACA. The amount of retirement my dad did save for, paid off their house when they retired.

MIL just remarried and supposedly her new H is LOADED. Not the case. He will drop 2k during a weekend to make it look like he's loaded, but he only has 1/8 of what I hope to have saved up by retirement. He's 66, poor health. I think MIL does have a retirement, but only recently started it (last 10 years). She's 60.

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