Retirement Crisis: 29 Percent of Older Americans Have No Savings, GAO Says

[RandySF]

How bad is America doing when it comes to retirement savings? The Government Accountability Office looked into the question, and its answer is sobering.

A new GAO analysis finds that among households with members aged 55 or older, nearly 29 percent have neither retirement savings nor a traditional pension plan.

"There hasn't been a significant increase in wages, people have student loans and other debt, and many are continuing to struggle financially," said Charles Jeszeck, the GAO's director of education, workforce and income security, which analyzed the Federal Reserve's 2013 Survey of Consumer Finances to come up with its estimates. "We aren't surprised that people have not saved a lot for retirement."

Even among those who do have retirement savings, their nest eggs are small. The agency found the median amount of those savings is about $104,000 for households with members between 55 and 64 years old and $148,000 for households with members 65 to 74 years old. That's equivalent to an inflation-protected annuity of $310 and $649 per month, respectively, according to the GAO.



http://www.nbcnews.com/business/personal-finance/retirement-crisis-29-percent-older-americans-have-no-savings-gao-n369241

[onecaliberal]

1. How many of them vote for republicans?

[hollysmom]

2. I have 2 democratic friends that both have no savings and they are retired

crap happens in life and you get replaced by H1B visa people and cant get another job and are too young to retire. Savings goes fast. I was lucky because I made a lot in 1999 with the Y2K bug, and I lived on those savings and stock options until I could finally get SS at 62, 4 years after my unemployment ran out. Others I know have no been so lucky. I would say it is people from both parties

[PumpkinAle]

3. Thought we were okay and then

"shit happens" through no fault of our own just circumstances.

Now gawd knows when and if we will be able to retire. And looking at people I work with it is across the board.

[jaysunb]

4. That would be me...

didn't think it would be this way, but......

[DesertFlower]

5. i have friends who are collecting full

social security benefits and working full time. she's 70 and he's 67. they have no savings and are barely getting by. they do live in NYC and pay $3300 for a 1 bedroom which is a bargain there. moving is not an option. she works way uptown -- takes almost an hour by bus. he works downtown and takes the bus. he can't take the subway because his legs are bad. even in brooklyn the rents are high.

their 30 year old son had to move back with them because he can't afford renting an apartment.

[SoCalDem]

6. If they both quit their jobs and all three of them (son too) moved away

they might be ahead of the game..

It sounds like they are basically working to keep a roof over their heads and commuting ..

That's no way to "live"..

Most elders without savings will owe zero in income taxes, and if they can score cheaper housing, they can live on their social security..

It's really not so much the savings, as it is the debt load..

When my husband retired, our income was cut by more than 50%, yet we are comfortable because we have zero debt..

If we had debt, we would be sunk ..

[DesertFlower]

7. i agree, but they don't want to do that.

i've told them what they can get here in phoenix -- a 2 bedroom, 2 bath with washer and dryer in apartment for less that $1100 a month in a nice neighborhood. even sent them links for apartments.

change is hard when you get older.

hubby and i made the move here in '89. i was 48. he was 42. we were able to buy a nice house -- something we never could have done in NY. fortunately he was with IBM and transferred on NY salary.

[SoCalDem]

8. We are 66 (me) and almost 72 (him), and we are moving to Washington state

There is NO way we want to stay on So Cal.. We have one grandchild who lives in Washington state, and we can't wait to get out of here. The move will be very hard and costly, but once there it will be so much cheaper..and closer to her too

As soon as we can get our house sold and get out of here, we are gone..even if it is costly and hard to move

[freshwest]

9. Depends on location and situation in WA state. Many retired are being priced out. I am. Good luck.

[SoCalDem]

10. Our needs are not huge, and we have been looking for a while now

We are fortunate to have LOTS of equity in our house here and will be paying cash for our "last house".. and we are staying away from Seattle & resorty areas
Because I had a stroke in January ( and had zero after effects..yay !!), we will have to stay with Kaiser so we are limited in where we can go..

As much as I loathe Kaiser, we only had to pay $200 out of a nearly $40K bill, so it;s looking like Kelso/Longview for us the only other Kaiser place is the Seattle area,too pricey and too close ( we do not want "roommates)...

There are many really nice places in that area with everything we need for under 300K..

[freshwest]

11. It's good this discussion is finally getting some time since 2016 will be crucial for SS.

Hillary Clinton -"Social Security is not a luxury."

-Apr 20, 2015

There's a lot of loose talk about Social Security, and I do not know how people can make some of the arguments they make. Because if you look at how dependent so many people are on their social security, they worked hard for it, they retire, they postpone retirement as long as possible because they want to keep working, but they also want to get the maximum amount of payout from Social Security. The Social Security trust fund, according to the trustees, will be solvent until 2035. So what do we do to make sure it is there, and we do not mess with it, and we do not pretend that it is a luxury, because it is not a luxury.

It is a necessity for the majority of people who draw from Social Security. So I think there will be some big political arguments about Social Security. And my only question to everybody who thinks we can privatize Social Security or undermine it in some way -- and what is going to happen to all these people who worked 27 years at the southern company? What is going to happen? It is just wrong. Everybody take a deep breath.

http://www.realclearpolitics.com/video/2015/04/20/hillary_clinton_social_security_not_a_luxury_we_do_not_mess_with_it.html

[mnhtnbb]

12. Getting out of a big city with expensive housing

is really crucial.

We left Los Angeles in 1988 and never looked back.

Both my husband and I are collecting SS (he's 72 and collecting full amount) I started
collecting at 62 two years ago because I wanted to be "on the rolls" for fear the Repub
Congress would do something to delay me getting it.

While my husband is still working part-time, the day is fast approaching when he should probably
be fully retired. Fortunately, we have no debt on this house we built after the fire, but the property tax bill
is about $875/month. We rent out a studio garage apartment (that didn't burn because it was detached) that we originally
built years before the fire as guest space and place for our youngest son to have his drums. The rent from that falls short of covering the property tax bill by $150/month.

But if we had a mortgage or were having to pay rent, we'd be eating up our savings and retirement funds
pretty fast.

[SoCalDem]

13. This was the purpose of the 30 yr mortgage

You buy the house at 30...pay it off in 30 years, and even without massive savings you CAN manage...but you have to be sure you are in an affordable market when you retire...even if it means inconvenience/expense in getting to an affordable place..

Too many people used homes as investments or atms and now they are in a real pickle

You cannot be retired on a small income and have debt or have to pay rent/mortgage/..

[Sherman A1]

14. Precisely

My B-I-L who nearing retirement age and believes himself to be a sage in all things financial because he reads Money Magazine has been lucky for the most part to have high paying jobs, but also used his McMansion as an ATM through the years. He was just laid off from a large telecommunications company and had to take a lower paying job somewhere else. I am sure he has savings, but having a house paid off sure would make his life easier as he lost all his 401k savings from a previous employer when he foolishly invested it in company stock funds and they went belly up. Along with 2 daughters away at college for advanced degrees, he certainly has much more going out than coming in.

But, he reads Money Magazine and has been generous enough to offer myself and my spouse the sage advice of his knowledge which somehow we just haven't had the time to get together to do...... Oh, darn......

[mnhtnbb]

16. How many people stay in place for 30 years anymore?

Between 1988 and 2000 we moved three times: CA to MO; MO to NE; NE to NC. After the fire in 2007, we rented for a year, then bought a small house which turned out to be a bad decision (NEVER make major decisions after a trauma like that)
and finally decided we should rebuild on the lot where the house burned down and sell the small house. Another bad decision,
because we got caught buying in 2008 just before the real estate market went to hell.
In hind sight, we would have been better off dumping the lot and never buying the small house
or rebuilding. We'd have come out ahead financially if we'd just rented for a couple of years until everything
settled down and we could begin to see clearly. I hated the house we were renting so much
I HAD to get out of it. But, you have to live with the decisions you make.

[bklyncowgirl]

15. It will be even worse for our children.

My husband and I both had long careers in government service. We were able to buy one house, sell it and use the money to purchase our current place with a hefty down payment. We were lucky. We will have pensions and our savings are pretty much intact.

I lost my job a few years ago but fortunately am now eligible to claim my pension. My husband is also eligible to retire early. Most of our savings is in our home. We hope to make enough on the sale to move to a cheaper (and hopefully more beautiful) part of the country. We have a dream of opening a small business --something we can leave to our daughter.

Sadly, don't see the same sort of opportunities available to our daughter and her peers. We have to somehow turn this around.

[SoCalDem]

17. The blessing, is that many younger folks do not want what their parents have/had

By the time they are our ages, they may have figured all this stuff out better than we did..and may have embraced communal living which is infinitely kinder to nature and cheaper too

I saw a special last weekend about an elder facility in Amsterdam (yeah..I know ..) that houses younger folks for free is they do maintenance & chores and do some cooking.. It's a great big ole success..

They have a nice apartment (individually) and take turns with the chores, so they can have outside work too..and they have developed a real bond with the elders and vice versa.. and they can save money because they do not pay rent..

[mnhtnbb]

18. Retirement places are very expensive

My uncle sold his big house in Pasadena (which they'd lived in for 30 years and owned outright)
after his wife died and moved in to assisted living
at about $5000/month. By the time he'd been there a year the place was charging him
for an assistant to be with him from 7am to 7pm (because he'd had falls) and the charge
was up to over $10,000/month! His only child--who lived in Seattle--came and got him
after a year of that and constant phone calls about his care. Moved his dad in with
him and tried to care for him by himself. That didn't last long, and back he went in to
another assisted living in Seattle.

When we rebuilt here, we created a room with its own bath and separate entrance on the lower
level--only thing down there--with the idea of eventually finding someone who likes older people--
maybe a student since we're walking distance to UNC campus--so we could age in place and have
someone live rent free in the room in exchange for helping us x hours around the house. Cooking.
Driving to store or dr appointments. That kind of thing. And if we end up needing round the clock
care I guess we'll eventually rent the studio apartment above the garage to someone else who would
also be involved in taking care of us. We don't have long term care insurance. And I can't imagine how
we'd be able to afford $10,000. or more/month to live in assisted living.

[RadiationTherapy]

19. My dad lost his sight to a brain tumor at 42. His son, my brother, had cancer 2 years later

which left him permanently disabled, but alive. My parents have no savings.

[mnhtnbb]

21. This is so sad and so wrong.

I don't know when or what it will take for people in this country to rise up and demand
universal health care. Nance Greggs' post about her husband's experience with cancer--
and NO out of pocket expenses from them as Canadians--should be the case in this
country,too. We can certainly afford it, but the oligarchs have made sure that getting
sick in the US should be a money making business for them.

[melm00se]

20. Lifestyle choices are the key

(please note, I am sure that people will read this and state "that's not me!! here are my specifics" but my comments are averages, your actual mileage may vary).

People don't have long term, retirement savings for a variety of reasons. Among them is the choices that individuals make through out their lifetimes. The 2 biggest, and those with the most impact, are housing and transportation.

Personal transportation:

It wasn't until recently that people held onto their cars (on the average) more than 5 or 6 years. at the turn of the 21st century the average ownership cycle of a car was 38 months. That meant that the average person jumped from one car payment to another car payment (and based upon the rise in prices of automobiles that car payment was more than the previous one). This was a steady drain on disposable income that could have gone to savings (either short term or long term).

I don't see that this cycle, for many, won't be broken any time soon. The average car loan term has been increasing steadily over the years. in the same period as above, car loan terms have lengthed, on the average, by 20% (from 5 years to now ~6.5 years)

Housing:

This is similar to personal transportation. at the turn of the 21st century, the average homeowner stayed in their purchased home for ~6 years and usually upgraded when they did. This home-ownership cycle pretty much guarantees/guaranteed that there was an increasing drain on disposable income that could go into savings as well as impacting the likelihood of the mortgage being paid off.

This never ending mortgage cycle obviates one of the larger advantages of being a homeowner: namely the ability to lock in your future housing costs at today's costs. To put it another way: the median house price in 1980 was $64,600, in 1990 the median price had almost doubled ($122,900) in 2010 it was $221,800. If you had bought a house in 1990 (and held it), your housing costs would have been roughly the same in 2010 as it was in 1990. But if one moved from one house to another, the housing expenses would have gone up.

I am sure that with a bit more research, similar data can be pulled as it relates to credit card debt, other big ticket purchases and the like.

it is these personal finance decisions (as well as other, more mundane ones) that impact the ability to put money into savings for the long term.

Suffice it to say that thes