Financing retirement in America

Like most boomers, I’m retired. My retirement is funded by (a) a 403b plan, (b) Social Security and (c) personal savings. I waited until age 70 for SS benefits, to max those out. Not everyone is so fortunate.

“How's this for a somber retirement forecast: The typical American worker has less than $1,000 saved for retirement, according to a new report from the National Institute on Retirement Security (NIRS).”

OK, but that covers all workers, age 21-65. A 21-year-old won't have saved as much as a 65-year-ole. 


By the time I finished grad school at age 27, I had more than $1000 saved, between a 403b and personal savings, and that’s in nominal dollars, not inflation-corrected. Of course, I didn’t own a car until I was 26 and didn’t buy my first home until I was 32. But this isn’t about me.

“In Fidelity's 26,000 defined-contribution plans at companies across the country, covering 24.8 million participants, account balances last year clocked in at record highs, with an average 401(k) balance of $144,400 and an average IRA account balance of $137,902.

“For these folks, the average 401(k) savings rate was 9.5%, and the average employer contribution rate was 4.7%, bringing the combined employee and employer 401(k) contributions to a record high of 14.2%. Fidelity's suggested savings rate is 15%.

“The NIRS snapshot of US workers, however, is grimmer. The typical employee contribution rate is between 5% and 6%, and the typical employer contribution rate is just under 3%.”

So regardless of your employment situation, start saving for retirement ASAP. The earlier you start, even with a little bit, the less painful it is.

But what about Social Security? SS was never intended as a sole source retirement plan. SS was meant to keep you from having to live under a bridge eating cat food.

“Many workers are not confident Social Security will be there for them when they need it, the NIRS researchers found. They figure either Social Security will go belly up before they're eligible to claim benefits or the benefits will be slashed.”

OK, this is just bullshit. If nothing is done before the trust fund is exhausted, SS will still pay 77% of projected benefits. SS cannot go bankrupt as long as there are workers in America. Still:

“For about half of seniors, monthly Social Security benefits provide at least 50% of their income, and for about one in four seniors, it provides at least 90% of their income.”

Statistically, a large fraction of vulnerable retirees are GOP voters. The GOP isn’t interested in bailing out struggling retirees. How to convince those folks to stop supporting a party that doesn’t care about them?


https://finance.yahoo.com/news/955-saved-for-retirement-millions-are-in-that-boat-150003868.html

Comments

Post a Comment

Popular posts from this blog

Yes, the CDC can change its mind

The Nobel Laureate economist Paul Samuelson famously acknowledged in a Meet the Press interview: “Well when events change, I change my mind. What do you do?” This observation applies to the advice from medical authorities such as the CDC and WHO during the COVID pandemic. Some members of the public are fond of pillorying these agencies for having published different guidelines at different times, as though health officials are in the business of issuing ex cathedra dogma rather than responding to incomplete and ambiguous information. Science doesn’t deal in proof, it deals with the weight of evidence. A scientific hypothesis is one that is capable of being tested and falsified by experiment. I get it. I used to teach problem-based learning to first year medical students, and they often struggled with what to do with incomplete and ambiguous information, which is what physicians in clinics do every day. Sometimes, one cannot wait for all the tests to be completed and all the data analyz...
Read more

About that Trump lawsuit

So Trump is suing Rupert Murdoch for defamation because of the release of a salacious doodle. Nothing remarkable about Donald J. Trump weaponizing the legal system against his opponents, I know. But there are some things that do bear remark here: “ . . . he's suing Rupert Murdoch personally. But you know who he's not suing? Lachlan Murdoch, who's actually the chairperson of News Corp and Fox, who's actually the decision-maker. Rupert Murdoch has no official role there anymore. He's an adviser.   “So, I thought that was revealing in a lot of ways, because it isn't just about going after the entity. It's sort of this expansion spillover, trying to send as much of a message as you possibly can. He's sort of hitting every potential lever, not just against Murdoch and that empire, but then all the other media properties in the future. It's also about sending an example.” “HAYES: Yeah. That, to me, is the point here, is that these lawsuits are not lawsuits...
Read more

I agree with RFK Jr.

Though it feels weird to say it, RFK Jr and I agree on something: curtailing direct-to-consumer marketing of pharmaceuticals. “ The Trump administration is discussing policies that would make it harder and more expensive for pharmaceutical companies to advertise directly to patients, in a move that could disrupt more than $10 billion in annual ad spending.   Although the US is the only place, besides New Zealand, where pharma companies can directly advertise, banning pharma ads outright could make the administration vulnerable to lawsuits, so it’s instead focusing on cutting down on the practice by adding legal and financial hurdles, according to people familiar with the plans who weren’t authorized to speak publicly on the matter.   “The two policies the administration has focused in on would be to require greater disclosures of side effects of a drug within each ad — likely making broadcast ads much longer and prohibitively expensive — or removing the industry’s ability to d...
Read more