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URL:  http://boards.fool.com/0gre-writes-however-many-people-consume-because-22314163.aspx

Subject:  Re: FI might not mean wealthy Date:  4/5/2005  4:09 PM
Author:  FoolMeOnce Number:  3165 of 5068

0gre writes:

However many people consume because they don't know better and they just don't understand that the reason they can never get ahead is because they are paying for last years lifestyle.

Exactly. I don't begrudge anyone the pleasures and yes, the luxuries that life has to offer. But like Stanley Johnson in the Lending Tree commercials, consumption can become a problem if it is for the wrong reasons and contrary to an individual's own best interests.

It is a national disgrace that so many people reach an advanced age with barely two nickels to rub together. Imagine the hundreds of thousands of dollars which they must have earned during a working lifetime that now provide no security. Just today the Employee Benefits Research Institute (EBRI) issued a press release contained the following:

"Workers Behind Schedule on Savings The survey found that most workers, buffeted by daily living expenses, say they are behind chedule in saving for retirement. But a large majority (66 percent) believes they will reach their savings goal by the time they stop working, even if they have only guessed at the amount of money they will need—an indication that many people's confidence may be misplaced. Why aren't workers meeting their own retirement savings schedules? The RCS found that three reasons stand out: The cost of paying everyday expenses (49 percent), child-rearing expenses (39 percent), and medical costs (35 percent). Just over half of workers (51 percent) said that high expenses are preventing them from achieving their retirement savings goals. Still, nearly 8 in 10 workers (79 percent) said they expect to have at least an adequate standard of living in retirement, reflecting an apparent confidence that they will be able to bolster their savings before they stop working or that they will be comfortable living with less. Another question, long part of the survey, found that 64 percent of workers are somewhat or very confident that they will accumulate the resources they anticipate they will need to retire. However, as previous waves of the survey have found, the 2005 RCS again suggests this may well be false confidence for many Americans: Less than half (42 percent) of those surveyed said they had even tried to figure out how much money they will actually need in retirement. Of those who said they had tried to calculate their retirement needs, 35 percent said they asked a financial advisor, but 37 percent said they came up with their own estimate and 10 percent admitted they simply guessed at the amount needed. The rest gave a variety of answers. Asked to evaluate their own timetable for planning and saving for retirement, more than half of workers (55 percent) said they were behind schedule by various amounts. But more than one-third of workers (37 percent) said they were on track. Workers reported their progress in planning and savings had changed little over the last year."

http://www.ebri.org/prrel/PR_692_5Apr05.pdf

Everyone thinks thing are going to retire but few have any savings or even a plan to achieve sufficient savings. Americans are great consumers and perhaps even greater procrastinators.

Regards,
FMO

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