Most workers have saved just $25,000 for retirement

By CNN
Posted March 15 at 5:50 a.m.

Most Americans have less than $25,000 saved up for retirement, putting retirement confidence at record lows.

More than a quarter, or 27 percent, of workers say they are “not at all confident“ about retirement, according to an annual survey from the Employee Benefit Research Institute and Mathew Greenwald & Associates Inc. That’s up from 22 percent last year, which was the lowest level recorded in the two decades the survey has been conducted.

Meanwhile, only 13 percent of workers are “very confident“ about having enough money to retire, which is unchanged from 2009.

While this sounds dismal, EBRI says it’s about time people started waking up to reality. And this drop in confidence may simply be a sign that people are finally realizing how much they must save, instead of being overly confident as they have been in previous years.

For example, confidence among the worst savers slipped sharply this year. The number of workers with savings of less than $25,000 and who reported being “not at all“ confident about their retirement savings surged to 43 percent this year, from only 19 percent in 2007.

“People are increasingly recognizing the level of savings realistically needed for a comfortable retirement,“ said Jack VanDerhei, EBRI research director and co-author of the report. “We know from previous surveys that far too many people had false confidence in the past.“

About 56 percent of workers report having less than $25,000 in savings and investments (not including the value of their primary home and benefit plans) and 29 percent of workers have less than $1,000 saved.

Plus, while 59 percent of workers say they are currently saving for retirement, about a third of all Americans — 34 percent of workers and 33 percent of retirees — were forced to tap into their savings last year just to cover basic expenses.

“People’s expectations need to come closer to reality so they will save more and delay retirement until it is financially feasible,“ said VanDerhei.

About 20 percent of workers said they now plan to retire later than they had desired, with the number of people expecting to retire after age 65 rising to 36 percent, compared with 25 percent in 2006.

The poor economy is the top reason people are delaying retirement this year, followed by “a lack of faith in Social Security or the government,“ a change in their employment situation, or simply because they can’t afford it.

About 74 percent of workers now plan to hold paying jobs in retirement, which is up from 70 percent in 2010 and triple the percentage of current retirees who say they worked for pay in retirement.

Nearly half of current retirees say they retired earlier than they had intended, due mainly to health problems or disability.

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24 comments:

  1. Richard Trumka March 15 at 7:23 a.m.

    Everyone will be fine since we all have pensions.

  2. pete March 15 at 7:53 a.m.

    Here’s an idea maybe if the Illinois and Federal Government got their foot off the neck of the average tax payer they might have a couple more dollars to put away for the rainy day.

  3. Kman March 15 at 8:16 a.m.

    I seriously doubt the accuracy of this report, as 25% seems extremely high. All of my co-workers that I have spoken with are not worried about their retirement savings and feel confident that they will be able to retire with significant, post-retirement income. I plan to retire much earlier than 65 and can not comprehend that people are electing to work after that age. Now if you will excuse me, I have to get back to teaching 1st Period Math.

  4. Kevin March 15 at 9:16 a.m.

    Here’s an idea; universal healthcare coverage. Now, I know our Republican overlords and their corporate masters will never allow that but if healthcare costs didn’t have to be paid for individually, retirement costs would be much easier to fund on a personal level.

  5. James March 15 at 9:18 a.m.

    With people dishing out as much as 50 – 60% on tax this is not surprising. Welcome to communist America. America sucks!

  6. jim March 15 at 9:36 a.m.

    That 13% that is confident about retirement happen to be the 13% of citizens that work for the government.

  7. Rj Chicago March 15 at 9:57 a.m.

    Several points on this missive from CNN which by the way appeared a week or two ago on other sites.

    a) If what I recall from a documentary on the UAL Bankruptcy is at all accurate – the program aired on Frontline some 6 or 7 years ago and titled “Can you afford to retire” – it outlined the dismal state of 401K’s, the lack if investments, equity extracted from houses and the then build up of credit card debt – and all this BEFORE the finance melt down – I think the number who are nowhere near ready to retire is too LOW!! I recommend this program to you and I think it is still viewable in the Frontline archives – It is nothing short of an eyeopener and one that just caused me to take a very deep breath about the future of this nation and what I see a destitution on a scale we have not known here.

    b) There are numerous sources besides CNN for heaven’s sake that anyone can access to understand this intractable problem and one that ain’t going away folks. There are overview sites such as Business Insider (much can’t be taken seriously from certain posters there – others are very good however so be selective) – Barry Ritholz’s ‘Big Picture’, Calcualted Risk (the blog part – filled with charts galore – I would encourage anyone to learn to read the charts if you don’t know how), Exonomix – there are so many. Big Picture happens to be my favoite and the most informative on the technicals.

    c) So….the bottom line is – the desire of the current admin (of which Ellen Warren is a part and who is in the program mentioned above – and I ain’t no fan of Ellen Warren mind you) the tax, tax, tax and spend as much as he can POTUS and his minions see it as desireable to redistribute the wealth of those who have been wise enough to save to those of our society who have not. In essence the motivation to do the very thing that will address the problem is the very thing the POTUS does not advocate – that of an incentive to work, to better your lot in life and that of your kids and if you are wise to save a bit from every time you are paid for a rainy day and retirement.

    d) If I am correct, our society is the only society in the history of mankind (correct me if I am wrong) to have a retirement system. Throughout history mankind worked until they could not work anymore and then were left to the care of their families until death.

    e) The Ponzi scheme to fund retirement is crashing folks. Social Security does not have enough revenue (given the smaller generations coming in behind the boomers) to cover the needed allocations as boomers retire. And with the way policy is headed in DEE CEE the government has to tax at higher rates across the income spectrum to pay for its bad debt. I suspect we will see the chickens coming home to roost again as Bernanke and the boys pull back from QE2. The Fed has been purchasing some 70% of all US treasuries (IOU’s) in the recent cycle leaving only 30% of the world to cover the rest (foreign bond traders, investment trusts etc.). And right now they dont’ have a strong appetite for US debt. So….who will be making up that huge gap – the only thing that can happen is the dollar gets whacked, prices shoot up, and more taxes are needed to cover the outstanding debt with the result being the US market tanks.

    f) Sorry to be so…..doom and gloom. I am sure the Feds have seen this massive hole comeing for some time. I equate this to the old story of the frog and the boiling pot of water. I suspect the Fed is just easing us in to the pain much like a frog who if put in boiling water jumps out immediately but put him in luke warm water and start to dial up the heat – well he doesnt’ jump out and is literally boiled to death. Awake, awake citizens we are having the heat slowly turned up on us!!!

  8. Lips March 15 at 10:01 a.m.

    We are heading to a welfare nation because of the big pushdown of wages since 9/11. There is less money available to put into the losing returement 401K plans. Big corporate America does not want to provide health insurance and pension plans to its meployees even after pushing down the average wage. Now we will raise social security retirement age to 70 years old. Why not raise it to 100 years old? More people age 50 or over will go on disabilty which will cost us more than the current early retirement age of 62. The naive conservatives are in for a rude awakening when the deficit will increase under their control as it did under Bush.
    I will call it the new “Tea Party Folly.” I will watch every moment as America deteriorates into a third world country under this so called naive thinking. The country that I love will wither and become part of the communist empire under the GOP. The subversion has begun as we are surrendering our rights to the conservative dictators – GOP governors.

  9. John March 15 at 10:16 a.m.

    The problem with stories like this is that they are including people of all ages, those who are nearing retirement and those who are just beginning their careers. It would be more helpful to report the amounts that different age groups have saved. The way that this is reported is irresponsible and calculated to cause panic.

  10. suecarey March 15 at 10:25 a.m.

    I’ll never be able to retire in this lifetime. Not in this country, that’s for sure. But just maybe in one of those retirement meccas in Mexico, the Dominican Republic, or Panama, or Thailand – where US Social Security is actually a livable wage. Maybe. I hope I can afford to get there if I ever have to stop working. My chance of not becoming homeless in this country is zero.

  11. MinisterR March 15 at 11:10 a.m.

    Sue How much have you put into social security? Why should you expect to get more than you put in? Where is that supposed to come from?

    The reasons SSN is failing are clear. On top of the fact that the “trust fund” is full of IOUs, meaning the money is spent the second it comes in. People are living longer, you have people getting Soc Sec who have never paid into it, you have children getting soc sec until they are 21 if a parent who was paying in passed away. These are but a few reasons why it IS bankrupt today (the system pays out more than it takes as of Oct 2010)

    I happen to know a family, 3 kids and wife, who’s husband was far from retirement. All 4 people receive Soc sec benefits, and receive benefits from almost every public aid agency around. She is healthy, the kids are in their teens, she has 3 cars and a big house and vacations many times a year. She does not work, well her job is managing the aid programs.

    This isn’t about envy but about corruption and unintended consequences of systems like Soc Sec that you rightly are entitled to

    **
    suecarey Today at 10:25 a.m.

    I’ll never be able to retire in this lifetime. Not in this country, that’s for sure. But just maybe in one of those retirement meccas in Mexico, the Dominican Republic, or Panama, or Thailand – where US Social Security is actually a livable wage. Maybe. I hope I can afford to get there if I ever have to stop working. My chance of not becoming homeless in this country is zero.

  12. Boy George March 15 at 11:39 a.m.

    Minister R,
    What you have described is pure fiction. You must be a Republican.
    My wife and I will retire outside the U.S. as the GOP is slowly but surely transforming this country into another Brazil, where 95% of the wealth is held by the top 10% of the population.

  13. Karl March 15 at 12:09 pm

    Unless you stratify the workers by age, this is pretty meaningless. All workers includes teenagers saving money for college. Even if they have tens thousands of dollars in savings, it is for college and they have zero retirement savings.

    Now if you looked at the data by age group and controlled for those few who have pensions, you might have some meaningful information with which to write a story. I suspect the answer may still be that many people have little savings and that Social Security income will be the primary source of their retirement income.

  14. I don't take the train March 15 at 12:39 pm

    Another “miss” on the economics page from CNN. While EBRI wants people to “delay retirement until it is financially feasible” the article concludes, without comment, with the acknowledgment that “Nearly half of current retirees say they retired earlier than they had intended, due mainly to health problems or disability.” Since “early retirement” isn’t voluntary, maybe next time, CNN can tell us what to do about these involuntary joblessness bouts that end up being called “retirement.”

  15. eieio March 15 at 12:40 pm

    It’s ok fellow American Comrades, not to worry. My hard work at saving will be taxed away from me by democrat party! and entitlemented to those who not prepare for life after job. Now we get moose and squirrel.

  16. MinisterR March 15 at 12:54 pm

    @Boy George your are lost. You say I wrote fiction? Really? How can you prove that?

    But because you are clearly incapable or unwilling to see I will save you some trouble. Here is the Soc Security Data FOOL
    **
    http://money.cnn.com/2010/08/05/news/economy/social_security_trustees_report/index.htm
    **
    For the first time in nearly 30 years, the system will pay out more benefits than it receives in payroll taxes both this year and next, the government officials who oversee Social Security said

    ***

    The fund reflects the roughly $2.5 trillion in excess payroll tax revenue that Uncle Sam has borrowed from Social Security since 1983. The money has been spent but the government promised to pay it back.

  17. MinisterR March 15 at 12:56 pm

    For the clueless BOY GEORGE

    **
    http://abcnews.go.com/Business/story?id=7572462&page=1

    ***
    Medicare is now paying out more than it receives.
    The trustees said the program for hospital expenses will pay out more in benefits than it collects this year and will be insolvent by 2017, two years earlier than the date projected in last year’s report.

  18. MinisterR March 15 at 1:00 pm

    AGAIN FOR LOSER BOY GEORGE

    **
    http://www.ssa.gov/pubs/10085.html
    **
    About 3.8 million children receive approximately $1.6 billion each month because one or both of their parents are disabled, retired or deceased. Those dollars help to provide the necessities of life for family members and help to make it possible for those children to complete high school. When a parent becomes disabled or dies, Social Security benefits help to stabilize the family’s financial future.

    NOTE: Disabled children whose parents have little income or resources may be eligible for Supplemental Security Income benefits

    there is a limit to the amount of money that can be paid to a family. The family maximum payment is determined as part of every Social Security benefit computation and can be from 150 to 180 percent of the parent’s full benefit amount.

  19. MinisterR March 15 at 1:01 pm

    I will use your logic. Since that money will be spent outside of the US, which is a form out outsourcing we need to tax your benefits at a hire rate.

    **
    Boy George Today at 11:39 a.m.

    Minister R,
    What you have described is pure fiction. You must be a Republican.
    My wife and I will retire outside the U.S. as the GOP is slowly but surely transforming this country into another Brazil, where 95% of the wealth is held by the top 10% of the population.

  20. MinisterR March 15 at 1:08 pm

    I will use your logic. Since the money you have will be spent outside of the US, which is a form of outsourcing we need to tax your benefits at a higher rate.

    BTW, I am not saying we should be cutting SSN, Medicare/caid, SSI or anything I am just pointing out the facts. They are underfunded, the money has been spent, we pay out more than we take in, this path is unsustainable. That is not “pure fiction”.

    **
    Boy George Today at 11:39 a.m.

    Minister R,
    What you have described is pure fiction. You must be a Republican.
    My wife and I will retire outside the U.S. as the GOP is slowly but surely transforming this country into another Brazil, where 95% of the wealth is held by the top 10% of the population.

  21. Everyday American March 15 at 1:22 pm

    Minister R is one of the biggest Republican shills on these comment boards. It’s hard to take him seriously. I highly doubt that the little anecdote he shares with us about the perpetually vacationing people on the dole. It sounds more like one of those stories Republicans tell each other they “heard of” or “know,” and gets passed around to the extent that they all believe it’s true, although it has no foundation in reality whatsoever.

    I’ll bet if you go to another news comment board for another city, you’ll see another “conservative” who just happens to claim to “know” the same family that Minister R claims to know. It’s funny to see the kinds of stories Republicans read on the Internet and believe because it seems to support their demented world views. Due to the apparent gullibility of “conservatives,” and their willingness to so readily spread lies, I never believe these stupid anecdotes that these people try to get others to believe. My guess is, like much else these people spew, that it’s a complete lie.

  22. MJM March 15 at 2:28 pm

    Don’t worry. As obama says, “Yes we can” bail your lazy f#$ks out.

  23. MinisterR March 15 at 2:42 pm

    Listen idiot I live in dearborn park on plymouth ct.

    Since you know so much why don’t you produce some evidence to support your position that I am shill. I didn’t read anything you wrote that contradicts the US Dept of Treas or the CBO. All I read was your denial of the truth.

    **
    Everyday American Today at 1:22 pm

    Minister R is one of the biggest Republican shills on these comment boards. It’s hard to take him seriously. I highly doubt that the little anecdote he shares with us about the perpetually vacationing people on the dole.

  24. MinisterR March 15 at 2:42 pm

    Listen idiot I live in dearborn park on plymouth ct. The people I describe live in a town home right down the street

    Since you know so much why don’t you produce some evidence to support your position that I am shill. I didn’t read anything you wrote that contradicts the US Dept of Treas or the CBO. All I read was your denial of the truth.

    **
    Everyday American Today at 1:22 pm

    Minister R is one of the biggest Republican shills on these comment boards. It’s hard to take him seriously. I highly doubt that the little anecdote he shares with us about the perpetually vacationing people on the dole.