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Nearly 1 in 3 adults have no retirement savings

A federal survey also found that only 18 percent of Americans close to retirement age plan to retire on a set date and not work again.

By MSN Money Partner Aug 12, 2014 12:51PM

This post comes from Krystal Steinmetz at partner site Money Talks News.


Money Talks News on MSN MoneyMany Americans are not prepared for retirement. While that may be no surprise to you, this might: One in 5 people who are nearing retirement age have no money saved.


Piggy bank © Hemera Technologies, AbleStock.com, JupiterimagesThat alarming statistic was highlighted in a recent report by the Federal Reserve  Board (.pdf file) on the economic well-being of U.S. households. According to a report press release:

Thirty-one percent of non-retired respondents reported having no retirement savings or pension, including 19 percent of those ages 55 to 64. Additionally, almost half of adults were not actively thinking about financial planning for retirement, with 24 percent saying they had given only a little thought to financial planning for their retirement and another 25 percent saying they had done no planning at all.

So why do so many Americans lack a retirement savings account? The survey found that many young people haven't started saving for retirement yet. But it goes beyond that, the report said.

Part of the story also seems to be one of financial fragility for some households, who lack retirement savings and also have little financial cushion at all. Over half (54 percent) of those with incomes under $25,000 reported having no retirement savings or pension, compared with 10 percent of those earning $100,000 or more. Of those who reported that they had no retirement savings or pension, 67 percent also reported that they did not regularly set aside part of their income in some type of savings account, compared to 47 percent of the overall population.

The report also includes these retirement statistics:

  • Of those Americans close to retirement age (55 to 64), just 18 percent said they planned to work full time until a set retirement date, then not work again. About a quarter said they would work as long as possible. Another 18 percent said they anticipated retiring, then taking on a part-time job. And 9 percent said they'd retire and then work for themselves.
  • About two-fifths of Americans ages 45 and older who had not yet retired said the Great Recession pushed back their planned retirement date.
  • Nearly 3 in 4 retired people included Social Security benefits as one source of retirement funds. Another 44 percent cited defined benefit pension payments as retirement income. And 32 percent said they use savings outside a retirement account.

The Fed surveyed more than 4,000 working and retirement-age Americans.


Are you surprised that 31 percent of Americans have saved zilch for retirement?


More from Money Talks News

83Comments
Aug 12, 2014 2:01PM
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I think this situation calls for confiscation of money from those who worked hard and saved for retirement and given to the incompetent, stupid and lazy who didn't.  That's how america works now, isn't it?

Aug 12, 2014 1:20PM
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The emphasis on financial planning and retirement in high school is non existent. I feel it is much more important to teach high school kids how to file taxes, apply for a loan, manage debt, and plan for retirement then to teach them almost any other subject (these things can all be taught in a few days too). It is sad that most people have no idea what a 401k is or if they do what it is invested in. A little knowledge can go a long way in making people self sufficient.
Aug 12, 2014 1:11PM
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I'm willing to wager that this picture looked much better in 2008.  Since then, everything positive is down and everything negative is up:  

The number of people working - DOWN 
Household incomes - DOWN 
Number of full-time jobs being created - DOWN
Number of owner-occupied residences - DOWN 

Number of food stamp recipients - UP 
Number of kids getting free breakfast and lunch at school - UP 
Number of disability claims - UP 
Number of medicaid recipients - UP

Incomes are dropping while the cost of living is moving much higher.  No wonder 1 in 3 don't have any retirement savings.
Aug 12, 2014 1:44PM
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Not surprised at all that 31% of Americans have saved zilch for retirement. Our economy and society seem to be built on the "get it now mentality" and "keeping up with the Joneses" instead of saving for what you really need first, then pay cash for it. It is too easy to just put it on the card and worry about paying for it later or not at all. Banks make bad decisions and get the government to bail them out, and many consumers are acting the same way. Look at the housing bubble caused by banks loaning money to folks who only had a small chance to pay the loan back. Housing prices soaring out of control and folks just taking cash out to get it now. I'm sure that many of these people just figure that the government will take care of their needs when they are old and broke. 

Live below your means and save for the future as you can't always get what you want but you'll end up with what you really need.
Aug 12, 2014 1:33PM
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Just a couple of weeks ago MSN ran an article stating that elder people were holding on to more money than ever.  You should have read the comments on that article by younger people calling the older people hoarders

 

More  typical MSN junk news

Aug 12, 2014 4:54PM
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All of us who have paid taxes our entire working lives will no doubt be supporting all those who didn't save.  It just never stops.  I say that, but acknowledge that some folks work their entire lives at low wage jobs and thus cannot save, as every dollar they make goes to pay their daily living expenses.  I have no problem helping people who retire from that category. I resent, in the biggest way, continuing to pay the support of the scum that has lived off the government (we taxpayers) most or all of their adult lives.  I have a sister-in-law who fits that description, and she has lived off the system her entire adult life.  And that includes having 3 kids and never getting married - food stamps, housing assistance, free medical via Medicaid, etc.  Makes me sick.
Aug 12, 2014 4:37PM
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But how many of them have been laid off for a period of time in which they had to use savings and investments meant for retirement? How many were reduced to part time? How many had their salary cut? How many, since being laid off, have yet to find gainful/permanent employment with a salary at least equal to what they were making? Too many unanswered questions with this incomplete survey.
Aug 12, 2014 2:11PM
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Oh well they will have to live off SS and me. I'm sure they will still get their food stamps and other assistance at my expense.
Aug 12, 2014 9:22PM
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If people don't save for their retirement, they will be a burden on their families and society.  For the most part, and there are exceptions, you can always save something, always.  You might have to give up the iPhone and the cable tv, maybe take a sack lunch to work, maybe find a part time job for a while, maybe the less expensive internet connection, there are always savings.  Most important, pay yourself first!  If the money is taken from you check before you see it, it's harder to spend. 


Why do I feel like I'm whistling into the wind.....

Aug 13, 2014 9:50AM
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IT's worse than that. I'm semi retired by choice not necessity. I had a CPA Practice and did taxes and accounting. I saw many people with no savings, some regarded their 401K, or 403B as savings and had no other savings. Usually people don't ask for advice in advance, they tell you what they did or got a 1099 and show you that. I've seen some very wealthy people with big pension accounts a big house mortgaged to the hilt and no other savings or investments.


It all comes down to education and many people have no idea what to do and live beyond their means.

Aug 12, 2014 1:34PM
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The typical working-age household saw an income decline of $2,700 from 2007 to 2009. Furthermore, given the great recession came on the heels of one of the worst business cycles (2000-07) on record in terms of job creation, the typical working-age household brought in roughly $5,000 less in 2009 than it did in the year 2000. 


Job loss in the Great Recession was by far the most severe of any recession since WWII.  In the two years from December 2007 to December 2009, the labor market shed 6.1% of all payroll employment.  By comparison, in the deep recession that began in 1981, job loss, at 3.1%, was about half as severe.  


While the peak unemployment rate was slightly higher in the 1981 recession than in the Great Recession, the increase in unemployment associated with the Great Recession was the largest increase in any recession in 70 years.

Aug 13, 2014 9:33AM
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 The only ones people have to blame are themselves.  We have free education, college assistance etc. and still want more.  The real problem is that if people make 30K a year  want to live like they make 40k and so on.  We do not wait to save up for a purchase, we buy on credit.....have to have it now.........We do not budget...it takes to much time......We got to have the latest phone, purse, shoes  and so on.  We live outside our means for years and then at retirement time its time to pay the price for our life style and we cry that its not fair.
Aug 12, 2014 5:05PM
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AS YOU SOW, SO SHALL YOU REAP... Too many dumb $hits out there that don't know their aphorisms.
Aug 13, 2014 10:25AM
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      There was a time not that long ago, when people helped people because it was the right thing to do. There was a time when people saw a need and worked in the community to provide for the need. There was a time when family helped family and generations lived together to help provide for each other. There was a time when if a person had a problem they solved it themselves or asked for help from family and friends. There was a time when people had respect for each other. There was a time when religion was an important part of our lives. There was a time when it was okay to believe in God and let everyone know it. There was a time when religious organizations were free to help those in need and provide services to all without interference. There was a time when neighbor helped neighbor and knew each other’s names. 
      Now people help people just for there own self-esteem and public image. Now when people see a need they wait for someone else to fix it or run to the government. Now we regard family as a burden and would consider living together a hardship, so we run to the government. Now if we have a problem we run to government and expect them to make it all better. Now it’s everyone for themselves and everything you do is wrong and the government can do it better. Now religion is something to be hidden, only whispered about and we run to the government to protect us from another’s beliefs. Now if a religious organization tries to help they have to give up their own customs and identity so no one they are helping gets offended, and the people run to the government to complain if they see a symbol. Now we try to be as far away from our neighbor as possible, and we don’t even know our neighbors name as we expect them to give up there rights and we run to the government to force our neighbor to do what we want so we are not offended.    
Aug 13, 2014 8:32AM
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Even if you save a nominal percentage of your income, if your income is such that even doing that is a hardship, there are no dividends on savings anymore which will grow your savings to a point where you can live on it at retirement. You must get the best education you can, a job with the best pay you can and, more importantly, retirement benefits, i.e. 401ks. THEN keep that job, save that money and live within your means. Love yourself, love your family, be proud of your hard work and
sacrifices and take care of your own. It is possible..........just look back in time!
Aug 12, 2014 4:28PM
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WIC --pays for food of new born babies

Food stamps -pays for food of poor folks

Medicaid- pays for medical of poor folks

Medicare-pays for medical of old folks

Affordable Care Act- I guess pays for medical care for some of folks that are not poor or old

Disability --provides income for folks that can't work because of an illness or other medical issues

Public schools-- pay for education breakfast and lunch

SNAP- Additional nutritional programs not quite sure what you need to qualify

HUD- Helps defray the cost of housing for poor and middle income

Social Security- Income paid to old folks for being old

DOE -has energy assistance programs

Department of Agriculture- Besides food stamps- also pays assistance to farmers

States also have additional aid programs to poor, middle class and businesses

Student aid--Helps pay for schooling

Subsidies are given to business that have trouble surviving on their own.

The list goes on and on.


With all of the above being paid for by taxes and borrowing from future generations, it  leaves less money for working people to save. With all of the above programs is there an incentive to save or earn money? If you put food out everyday for stray cats, the cats will continue to show up at your house. What happens if the generous care-giver moves or dies? What happens to the stray cats? Is the caregiver being good to the cats or cruel? Does the care-giver have good intentions?



Aug 12, 2014 3:59PM
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Get real - on a household income of $25k, you don't need any retirement savings.  SS and other government benefits will nearly fund that standard of living.  Assuming a household includes two people, $25k is not even full employment at minimum wage.
Aug 12, 2014 5:31PM
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The best chance to retire on your terms is to start planning and saving/investing early in life, do it with every paycheck and take advantage of any opportunity to increase your nest egg (employer matching plans, catch up contributions when you reach 50,etc.). Many do not think or plan for retirement and the recent recession had no effect on their retirement nest egg. I use several sits for retirement planning and investing including Dividendchannel, ETFchannel and the site Retirement And Good Living which provides information on investing, planning, downsizing, frugal living. retirement locations and many other retirement topics that can help those who are planning for retirement or are already retired.

Aug 13, 2014 8:42AM
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Kinda hard to save for anything with only a $25,000 income for those that do work. and wages not moving
Aug 13, 2014 1:04PM
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The spirit of Eeyore is abroad in the land, but of course that's just why the so-called "journalist" wrote this piece. There's really nothing new here, the same was true 30 years ago. Young people don't think about retirement, middle-aged people are busy trying to make ends meet and put the kids through college. It's mostly only people over 45 who start to think a lot about retirement. I'm surprised that 82% of them do (the opposite of the 18% they make a big deal of, but then it doesn't "sell papers" to say that, does it?)

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