These folks say most are, maybe 80-90%. That should come as little surprise if you think about. However, this uses a "comprehensive" definition of wealth that includes Social Security. That makes up about $180,000 of the average person's $900,000 or so of "comprehensive" wealth. And of course the importance of that SS wealth varies wildly according to income and total wealth level of the individual, again no surprise. They do a bit of a calculation on what a 25% cut in benefit might do to the--average--person.The authors do almost nothing on varying health outcomes, barely mentioning Medicare or the disastrous financial shape that program is in, much worse than SS. Medicare benefits are a huge component of "comprehensive" wealth for the retiree, the authors barely touch that issue.So very very sketchy indeed. Does not stop some from saying this study proves much, when it doesn't. Do think it is a nice bit of antidote to the financial advisor community's terrorist tactics on retirement planning. Frankly, that's all some of them are, financial terrorists.Finally, the authors do not even mention that savings as a percentage of income has fallen from 9% in 1978 to (-1.5%) last two years. You would have to be as credulous as an "economist" to believe that will not have a severe impact--again wildly unevenly distributed impact--in the future. My Granny retired early and she had asset wealth, like most of her friends. But she had saved at least 9%, can guarantee you she and her friends were NOT spending more than their income year after year. Lastly, debt to GDP of the federal government (taxpayers) fell WWII--1980. Since then everyone knows the story. 3 trillion dollars new debt in six years with El Bush, 500 billion more last year in a "Goldilocks" economy. And in a recession? When the Boomers have all retired and quit saving?For what it's worth, (not much).Is There a Savings Crisis? Measuring the Adequacy of HouseholdRetirement Wealth October 2006We find that most households have suffcient resources to finance adequate consumption in retirement, with a median annuity value of $32,000 per person ($40,000 after accounting for household economies of scale) and a median ratio of wealth to poverty of 3.56. About 12 percent of households, however, have insuffcient wealth to consistently finance consumption equal to the poverty line over their expected lifetimes.http://www.albany.edu/econ/Research/fall06/1027.pdf
Most People Saving Enough?<folks say most are, maybe 80-90%. This uses a "comprehensive" definition that includes Social Security. That makes up about $180,000 of the average person's $900,000 or so of "comprehensive" wealth...So sketchy...the financial advisor community's terrorist tactics on retirement planning....that's all some are, financial terrorists.>If this description were a picture, I'd call it rosy--too rosy. "Average person $900K," even including SS? You can find endless "studies" of adequate retirement planning, but I think some balance is called for. Maybe we need a little "black" to mix into the rose for some "financial terrorism" you mentioned. Nearly 28 million households--37% of the total--do not own a retirement account. Among households who owned a retirement savings account of any kind, according to a 2004 report by the Congressional Research Service, the average value of all such accounts was $95,943. That was distorted by the relatively few large accounts, and the median value of all accounts was just $27,000.<For what it's worth, (not much)...We find most households have suffcient resources to finance adequate consumption in retirement> Also from the below link: "Just 11% of all Americans have retirement savings of $250,000 or more." Of the remaining 89%, I'd hesitate to use the words "most households"; majority of.. at best and some of... at the worst. (http://www.forbes.com/retirement/2005/05/04/cx_da_0504topnews.html)I'm not a professional demographer, not especially skilled in math, and my last name isn't Gallup, of poll fame. All I know is that I see/hear more people wringing their hands rather than clapping them.
Oh..my heart bleeds for Ben Stein's friends who make a million a year, and don't have the 15 million in savings to preserve their way of life in Malibu....OK..so they retire to TX, sell their multi-million dollar house, and live very comfy on 'only $100,000' a year or more. Do we need to shed crocodile tears for this 'poor friends' who haven't saved enough? "Nearly 28 million households--37% of the total--do not own a retirement account. Among households who owned a retirement savings account of any kind, according to a 2004 report by the Congressional Research Service, the average value of all such accounts was $95,943. That was distorted by the relatively few large accounts, and the median value of all accounts was just $27,000.Nice stat, but what was the MEDIAN age of the folks? If these are 20-40 year olds, you don't expect them to have $1000000 portfolios, YET.....Nor does it put it in perspective to their income. If you have $20,000 earners with balances of $27,000 in their retirement funds at age 38, they are likely proceding well. Most of the savings plans really only got started 15 years ago with 401K plans...... IRAs were a pretty poor excuse before than for many years, with many limited to CDs or other high load funds and high commissions and annual fees. So throw the numbers around, but they don't mean a hill of beans without age and income correlation.....Those at the bottom end of the income ladder need the least amount of savings, relatively speaking, since SS replaces a larger portion of their retirement income...t.
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