Half Of Americans Are Not Saving For Retirement: Report

Half of all Americans are not saving for retirement at all, according to a new study.

An alarming number of Americans may have to work until they die.

One in two Americans are not saving at all for retirement, according to a new study issued by LIMRA, a financial services trade association, and noted by CNN Money.

The youngest and the poorest are the least likely to be putting money aside. Fifty-six percent of all 18- to 34-year-olds are not saving at all for retirement, according to the study. In addition, just 23 percent of Americans earning less than $50,000 per year contributed at least $2,500 to their retirement accounts over the past year.

"In order to have the adequate savings necessary to meet their financial needs in retirement -- which could last 20 or more years -- it is critical that these individuals begin saving systematically early in their working years," said Matthew Drinkwater, associate managing director at LIMRA, according to CNN Money.

Unfortunately, most young Americans do not start saving early. Just one in three Americans begin putting away money for retirement in their 20s, according to Bankrate.

Meanwhile, retiree health care costs have risen 6 percent a year since 2002. Health care bills now run to $240,000 for a 65-year-old couple over a 20-year-period, according to a recent study by Fidelity Investments cited by USA Today.

As they face high living costs and low bank balances, more and more older Americans are finding themselves in tough financial positions. The number of senior citizens who are working has doubled over the past 15 years to a record 7.2 million, according to The New York Times. More than nine million senior citizens cannot pay their bills, and 60 percent of older women cannot afford basic expenses, according to two recent studies from the group Wider Opportunities for Women.

At the same time, many younger Americans simply cannot afford to start saving for retirement. Just one in two recent college graduates have full-time jobs, according to a study by Rutgers released on Thursday. And the average debt burden of twenty-somethings is $45,000, according to a recent study by PNC Bank.

That financial insecurity lasts throughout the lives of many. Forty-three percent of all American households are one crisis away from poverty, according to a recent study -- meaning saving for retirement is all but impossible.

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Comments

[mmmmmbbbbbmmmmm]

11:49 PM on 05/15/2012

It is rather difficult to save for retirement. For one, because we have a fiat currency system, and the Federal Reserve keeps pumping out dollars, we have inflation. OK, lets say you save with gold..well, when you take the gold out many years later, you will still have the same purchasing power with gold, but because of inflation, it will buy more dollars, and the govt. will say you have a capital gain (you really don't, you just have the same amount of gold) and take away some the value in taxes. You could buy stocks, but if you are unlucky, you could hit a long patch of no increase in value, like now. The Federal Reserve also manipulates interest rates, so its almost impossible to earn significantly above inflation. Interest rates have gone down slowly over the last 30 years, increasing bond values..now interest rates have nowhere to go but up, and the value of a long term bond purchased now will go down. Consider buying some real estate now that will produce some income. What should young people do? I suggest three things...you and your spouse both get Federal govt. jobs..the Fed govt. will take care of its own, or get a job where you will know how to invest money, like a higher level position in finance or real estate..the more international the better..or just try to get rich enough that it won't make any difference.

[RealistBC]

09:43 PM on 05/14/2012

It is not possible to save for retirement when one supports un- and under-employed adult relatives who would otherwise starve. I refuse to go Ayn Randian like a seflish neocon.

[Core-Sample]

03:41 PM on 05/14/2012

Retirement? LOL!

[freeSpeakr]

03:30 PM on 05/12/2012

Gee, maybe your trickle-downy supply-sidey thing is broken.

http://www.good.is/post/americans-are-horribly-misinformed-about-who-has-money/ http://goo.gl/Vb3H

Who Rules America? http://goo.gl/7cS7J

15 Wealth Distn Charts http://goo.gl/5u32a

Control of the press CFR http://goo.gl/CPDA

Profiteer or human person http://goo.gl/mLx96

Bursting Eugene Fama's bubble. http://mises.org/daily/4056”

[KarmaPatrol]

01:22 PM on 05/12/2012

The idea that the stock market returns in a 401K/IRAs will replace reliance on Social Security is pretty much doomed - as is any politician telling (armed) constituents they aren't getting their Social Security. Prepare the printing presses, cause as the song goes, "baby, you ain't seen nothing yet".

[KarmaPatrol]

01:37 PM on 05/12/2012

That should be Doomed .. capital D (almost exact same words as a Blackrock hedge fund guru when asked about a similar problem where most retirement savers just missed the last 3 years of bull market. Doomed).

[StJames]

07:53 PM on 05/11/2012

Half of Americans aren't earning enough money to pay federal income tax, yet alone save for retirement. 40+ years of "trickle down " economics have screwed them royally. At the end of the 19th and first half of the 20th century it was common for people to work until they died. One of the often overlooked benefits of Social Security is that it allowed people to retire and create vacancies for the younger generation. Now there are 7+ million people are working in jobs while the young remained unemployed. There is something very wrong with that picture.

[tax evader]

02:24 PM on 05/11/2012

Anyone tired of articles with this subject? Their idea of saving for retirement is putting it in the stock market (401k and mutual funds). I save for my retirement and it's definitely not going into these retirement instruments. I'm 39 years old and have been putting away money since age 18. I live a frugal life (still manage to have fun) and at retirement age I will be just fine.

[WorkInCanada]

03:21 PM on 05/12/2012

You have learned well from witnessing the stock market. Good for you. I think I'm going to start doing the same thing. Pretty tired of the top .1% stealing my money.

[tax evader]

09:38 PM on 05/14/2012

I say go for it. That way, years after a big drop in the market (there will be another one) and losing a lot of your principal, you won't be irritated by some market pundit saying, "had the investor not got out and stayed at it (contributed monthly) he would be up right now or back to even." To me it's not that encouraging when it has more to do with my contributions not getting badly chopped in a fairly stable market. GLTY

[IslamicPacifist]

01:25 AM on 05/15/2012

Just know that you lost half of your money through inflation over the past 10 years

[tax evader]

08:43 PM on 05/15/2012

I knew I would hear that argument. I don't care! Happy to lose to inflation and have principal rather than lose to inflation and lose principal. I guess you missed the part in my rant where I say I live a frugal life.

[satyrday]

02:12 PM on 05/11/2012

If Obamacare is struck down, it seems like there's a good chance that all of your hard saved money would just go straight to hospital bills anyway. So you're left living on SSI anyway.

Looking at the present situation, saving seems futile.

[suds mcduff]

01:05 PM on 05/11/2012

For the working poor and some of the middle class, it's impossible to save for retirement unless you live in a tent and eat gruel...retirement used to be based on the "three legged stool"----pension, savings, and social security....conservatives have managed to remove one leg and are working on the other....

[RealistBC]

10:37 PM on 05/14/2012

And who got YOUR savings?

[suds mcduff]

07:07 AM on 05/15/2012

A lot was eliminated in the Repub Crash of 2008...401Ks were turned into 201Ks overnight, remember?

[Andrew Cole]

12:53 PM on 05/11/2012

First of all, I can't believe that half of American's can save for retirement. A lot of people can barely put food in their stomach, assuming they are lucky enough to work. Second, even if people do save, inflation is going to eat it up. A dollar is worth more today than it will be when you retire. What else are you going to do with it? Invest? Even "safe" investments carry a risk and might not beat inflation. The only winners there are the financial workers and traders who make money no matter what happens. Maybe if we had an environment that was conducive to saving people would do more of it.

[WorkInCanada]

03:24 PM on 05/12/2012

I wondered about that stat, too. Half of Americans are actually saving for retirement? hmmm...wonder what goes into that stat. Are they including people working jobs that have pensions? If so, that can't be considered saving since if the company goes belly up or the markets crash again, there goes that 'savings.

[IslamicPacifist]

01:35 AM on 05/15/2012

*shrugs*
I put my savings in physical silver
and I live a very simple/easy life
No Children to be responsible for
Cheap rent
No debt
No frivolous purchases
I put away nearly half of my income (which isn't much)

[realitybaby]

12:32 PM on 05/11/2012

we are TOTALLY SCREWED. Monies that should be going to US/ME AND YOU are being shipped overseas in truckloads - I would prefer that money to be saved for me for FOOD STAMPS cause for sure when I retire I aint gonna be able to buy food on my own - and that's through no fault of my own - my 401K was destroyed in 08 and not much improvement at all. After all you and I didnt have the benefit of INSIDER TRADING INFO LIKE OUR REPS IN DC!

[krm1255]

11:43 AM on 05/11/2012

I have friends who saved for retirement and had quite a lot put aside in the stock market. 2008 wiped out half of their savings. I'm not sure how much they've managed to recover, but saving is not the total answer.

[lofttypeofaview]

07:55 AM on 05/12/2012

It also depends upon how money is saved. I have always believed that stocks are lottery tickets, never invest what you can't afford to lose and never reinvest what you've gained.

[dukeitout]

11:21 AM on 05/11/2012

Saving for retirement?? Saving for retirement?? You are surely joking. The challange is to accumulate enough money during the week to feed one's self or family; pay the rent; and pay for wars in Afghansitan and Iraq. Geesh! First things first.

[Melinda Brunner]

11:10 AM on 05/11/2012

How can one save when fuel is 4 bucks a gal.

The only solution is revolution.

[satyrday]

02:17 PM on 05/11/2012

No, guns are expensive.

[signgrrl]

02:35 PM on 05/11/2012

pitchforks are much less expensive.

[IslamicPacifist]

01:38 AM on 05/15/2012

I'm pretty handy with wood and metal
I could make a few guillotines pretty cheaply

[OldTulsan]

11:00 AM on 05/11/2012

For those espousing "personal responsibility", the U.S. is the only major country where someone, even with medical insurance, can be forced into bankruptcy by a medical disaster.

Over 60% of personal bankruptci­es are caused by medical disasters.

http://www.consumeraffairs.com/news04/2005/bankruptcy_study.html
Medical Bills Leading Cause of Bankruptcy­­, Harvard Study Finds

"...Today'­s health insurance policies -- with high deductible­s, co-pays, and many exclusions -- offer little protection during a serious illness. Uncovered medical bills averaged $13,460 for those with private insurance at the start of their illness. People with cancer had average medical debts of $35,878.

"The paradox is that the costliest health system in the world performs so poorly. We waste one-third of every health care dollar on insurance bureaucrac­y and profits while two million people go bankrupt annually and we leave 45 million uninsured" said Dr. Quentin Young, national coordinato­r of Physicians for a National Health Program.

"With national health insurance ('Medicare for All'), we could provide comprehens­ive, lifelong coverage to all Americans for the same amount we are spending now and end the cruelty of ruining families financiall­y when they get sick."