Wednesday, March 20, 2013

Sweet retirement

The 401k method of funding personal retirements has been noted for some time as not working very well.   The matching funds that a company provides can be nice, but the fees are often extremely high. The limits to the amount of money that you can put into an IRA (generally around $5,000 a year) are too be more than a bonus amount, and generally require a booming investment market to make the tax reductions worth the withdrawl headaches.
So when the Wall Street Journal has an article saying that workers don't have enough money to retire on, it's not exactly shocking news.
Kelly Greene and Vipal Monga, Wall Street Journal, 19 March 2013
Fifty-seven percent of U.S. workers surveyed reported less than $25,000 in total household savings and investments excluding their homes, according to a report to be released Tuesday by the Employee Benefit Research Institute. Only 49% reported having so little money saved in 2008.
The survey also found that 28% of Americans have no confidence they will have enough money to retire comfortably—the highest level in the study's 23-year history.
What I find most discomforting is not that 57% of workers have less than 25,000 in total household savings, but that only 28% have no confidence in being able to retire comfortably.  It is not particularly helpful that as retirees have become more Republican - I guess you could call it the Reagan Cohort - the Democrats have been more willing to take shots at Social Security payments.  It is not the sacred cow that it once was.  Given the size of the baby boom bubble retiring, it propably never could be.


Francis Lee said...

A lot of us will end up working until we die!

russell1200 said...

Francis: A lot of people say that but after we get to about 55, it is very hard to find employment if we lose our job. So you get a forced retirement, early retirement with no money.