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jstan
climber
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Topic Author's Original Post - Mar 3, 2017 - 11:29pm PT
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https://www.bloomberg.com/news/articles/2017-02-28/retirement-anxiety-is-gripping-america(;
2/28/17
Pensions are vanishing, and state-sponsored IRAs are under attack. Yet most Americans support both, a new survey shows.
by
Suzanne Woolley
@WealthWatch More stories by Suzanne Woolley
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Is Your 401(k) Safe During Volatile Markets?
A few weeks after the Republican-controlled U.S. House of Representatives moved to kill rules allowing states to create portable retirement savings accounts, a new survey found that 75 percent of Americans support just such an option.
The response was a common refrain in a report that echoed the growing dread of living out one’s golden years in poverty. Politicians in Washington just don’t get how hard it is to prepare for retirement, according to 85 percent of those polled by Greenwald & Associates for the National Institute on Retirement Security (NIRS).
That kind of unity was related in large part to a grim view of the future faced by the elderly:
“If current trends continue, the U.S. soon will face rates of poverty among senior citizens not seen since the Great Depression. Of the 18 million workers between the ages of 55 and 64 in 2012, more than four million will be poor or near poor at age 65. This includes 2.6 million Americans considered middle-class prior to retirement.”
The survey, part of a larger research project looking at U.S. views on retirement security, randomly polled 800 people age 25 or older by phone since the 2016 election. The report concluded that “Americans are united in their anxiety about their economic security in retirement and in their dissatisfaction with national policy makers’ inaction to address the nations retirement crisis.”
Despite the political divide that has frozen the nation in place on other issues, support for such state-sponsored savings plans was close to bipartisan. Some 83 percent of Democrats were in favor of the option for those without work-sponsored plans, compared with 72 percent of Republicans.
Party lines were even less important when it came to how respondents viewed their own prospects. Almost 76 percent of those polled worry that economic conditions might hurt their chances for a secure retirement. Meanwhile, nostalgia for the days of guaranteed income streams from defined benefit pension plans runs deep. Seventy-one percent of Americans said pensions beat 401(k)s in helping them live comfortably in retirement.
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The survey also looked at attitudes about Social Security amid talk of benefit cuts. “For most, it is the only source of lifetime income adjusted for inflation,” the report stated. 1 “Almost 22 percent of people age 65 and older live in families that depend on Social Security benefits for 90 percent or more of their income,” according to the report. “Another 24 percent receive at least half, but less than 90 percent, of their family income from Social Security.” Any cuts to government spending that would lead to lower Social Security benefits for current retirees got a thumbs down from 76 percent of those surveyed. That’s up from 67 percent in 2013.
When asked if the government should cut spending in all areas, even if it means reducing Social Security benefits for current retirees, only 24 percent of Americans agreed. What about cutting benefits for future retirees? This is where party lines became more defined: Some 13 percent of Democrats said yes, compared with 36 percent of Republicans.
More findings from the survey:
Fifty-five percent of people surveyed “strongly agreed” that the country faces a retirement crisis.
Eighty percent of those surveyed said the average worker “cannot save enough on their own to guarantee a secure retirement.” That’s up from 73 percent in 2015. More self-identified Democrats agreed with that statement (85 percent) than Republicans (77 percent).
The high cost of long-term care is a major factor behind how tough it is to prepare for retirement, according to 88 percent of survey respondents. Democrats and Republicans were very close on this measure, at 89 and 91 percent, respectively.
Eighty-two percent of Americans said that the government should make offering pensions easier for employers.
Making sure that Americans have a secure retirement should be a higher priority for Washington, according to 88 percent of those surveyed. Among Democrats, 98 percent agreed. Among Republicans, 82 percent agreed.
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Bad Climber
Trad climber
The Lawless Border Regions
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Yeah, concerning stuff. I'm about to retire in a few months here. My main concern is the fiscal health of the State Teachers Retirement System (CA) and, to a lesser extent, Social Security. If SS tanked, we'd be pretty tight, but we'd get by. If STRS tanked, life would get pretty interesting. However, we've been saving and investing hard for a long time, so we've got that, too, and we'll be putting most of the proceeds from the sale of our house into investments, too--HEAVILY diversified mofos. No guarantees in this life, but like leaving the security of a good hold and piece of gear, you have to launch out on that lead.
A big part part--the biggest part--of this retirement fear is the totally abysmal savings rates of Americans. As a population, we're just morons. I know there are a lot of people for whom saving is not really possible. They're living too close to the bone. But many millions could, with a little resolve and creativity, save a lot. But they don't, expecting, I suppose, some magic government program will save them. Social Security, assuming it doesn't tank, doesn't provide much money for the average worker, and to rely on ONLY that to get by seems the height of foolishness.
Here's some juice from USA today:
Last year, GoBankingRates surveyed more than 5,000 Americans only to uncover that 62% of them had less than $1,000 in savings. Last month GoBankingRates again posed the question to Americans of how much they had in their savings account, only this time it asked 7,052 people. The result? Nearly seven in 10 Americans (69%) had less than $1,000 in their savings account.
The article: http://www.usatoday.com/story/money/personalfinance/2016/10/09/savings-study/91083712/
Yep. We in trouble.
BAd
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Contractor
Boulder climber
CA
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Supply Siders aren't big fans of basic savings accounts, conservative government pensions or social security- in their eyes, these rob private markets of revenue.
The manipulation and leveraging of your retirement money can create very handsome returns for the house and the retiree, like a giant roulette wheel. Of course the house is very good at limiting their exposure while they gamble with your financial security.
When our economy was on it's deathbed, retirees living on fixed incomes via social security, or government pensions helped float the boat- I'm not sure we would have made it if Bush had been successful in his effort to privatize Social Security.
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Chaz
Trad climber
greater Boss Angeles area
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Good thing you've got that van project working, Tad.
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hobo_dan
Social climber
Minnesota
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I'm retiring in 12 weeks. Minnesota Teacher and i'm grabbing my SS as soon as I turn 62. The numbers cross over when I turn 80. I'm risking less money with the assumption that I'll have more fun at 62 than I will at 70.
I'm in a good place but many many are not. If 50% of the population rely on SS for 50% or more of their income I'm thinking we should reinforce that program as much as possible.
Does anyone else here feel like the 600 Billion that we sink into defense is wasteful? Defending against who? Mexico? Canada? An ocean east and west? Being the policeman of the world?
FWIW I'm pretty much out of stocks right now- I'd like to see the long Bull market correct and I'd like to see Trump start acting like an adult. I don't like putting my money down amidst such uncertainty.
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WBraun
climber
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Does anyone else here feel like the 600 Billion that we sink into defense is wasteful?
It's not for defense but for aggression.
Stoopid Americans economy is built on sh!t we don't need.
Stupid Americans call everyone any enemy because they want to be Numbah One.
Stoopid Americans spend all their time and money creating false enemies to keep their phony defense spending going.
Stoopid Americans run their consciousness to the rest of world "You're either with us or not" and then force that consciousness onto the world.
America is run on agression and violence masquarded as peace .....
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Contractor
Boulder climber
CA
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In regards to the military budget increase:
Most everyone in my family and many of my friends have served in the military- what they've sacrificed for us is very humbling.
That said, I'm not very stoked on paying for, what amounts to defense contractor subsidies and global, corporate muscle at the expense of soft diplomacy and fair trade agreements under this administration.
I agree with Warner!
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TradEddie
Trad climber
Philadelphia, PA
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I'm hoping that the obesity epidemic will reduce demand for SS, leaving something for the rest of us.
It's not Plan A however.
TE
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Moof
Big Wall climber
Orygun
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Save 30% (or more) of your post tax income. Stick it in low cost index funds and leave it the hell alone.
Too many people have been told (and believed) that 10% was enough. BS. Most can't figure out how to not live on their credit cards, let alone save 10%.
If people spent half the time on retirement planning that they do prepping for the Zombie Apocalypse they would be just fine. Instead they buy latte's and spinny rims. Crazy.
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Reilly
Mountain climber
The Other Monrovia- CA
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10% is enough, if you start in yer 20's. Right now I wouldn't put anything
in anything - equity valuations are way inflated and bonds are just an
inflation hedge, although they will improve somewhat as the Fed raises rates.
It wouldn't hurt to buy some bond funds though.
Pension funds are run by idiots, not that you have any say in the matter.
Look at all the pension funds that got sold hedge fund snake oil. Pathetic
very closely bordering on criminal.
Yer best investment these days is solid income producing property. Any
well run property should net you at least a 7-8% return which is about the
most you can possibly hope for from equities these days.
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bluering
Trad climber
Santa Clara, CA
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Does anyone else here feel like the 600 Billion that we sink into defense is wasteful?
No. It's always easy to criticize this sh#t when you're sitting high on the hog, isn't it?
"We don't need another aircraft carrier group, we have enough already and nobody attacks us anymore."
Until they do.
You're precious SS money wasn't spent on Defense, we already have a specific, dedicated budget for that. Your SS money was squandered by our Gov't in many other ways.
#DrainTheSwamp
The Gov't needs to be reigned in at all levels. It's f*#king spending is out of control.
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rick sumner
Trad climber
reno, nevada/ wasilla alaska
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Never had the inclination, or option for that matter, to depend on a public or private retirement system. Been self employed pretty much since 26. Worked hard, invested in what i know-income and speculative properties as well as some index funds. With the epedemic of underfunded pension funds and looming insolvency of SS i would also be nervous if i was in many of your shoes. Lets just hope the current administration success in taming the U.S. budgetary monster and reigniting the economic engine.
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Gunkie
Trad climber
Valles Marineris
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My first boss 'Ray' at my first job out of college was near retirement. I'm a 22 year old systems engineer just out of school who just received a massive check for the first two weeks of working at a defense contractor. Check total $807. I had never seen a check for this amount of money before.
Well, I'm staring at this check and my boss sits down at my desk and asks, "how much are you putting away?" I obnoxiously announce that I'm going to spend every dime on fast women, fast cars and climbing gear... and maybe some on my $220/month basement apartment underneath an old lady's house. And my 12 year old AMC Matador will run forever anyway.
My boss literally reaches across the desk and grabs me by the collar and says, "spend this one buckaroo, but you'd better save 10% of every check from now until you're 65 because it's no fun looking down retirement with nothing in the bank." He also tells me to not expect social security to even exist when I retire.
I think my boss had saved plenty and was just instilling the fear of destitution into me. BUT, the following Monday I go down to payroll and change my deductions to 10% pre-tax into a 401k where the employer kicks in one-for-one on the first 6%, which was awesome.
Now I'm in my mid-50's, still saving and have Ray to thank for the advice 30+ years ago. Thanks Ray, probably the best advice I ever received.
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steveA
Trad climber
Wolfeboro, NH
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Mr. Braun,
That was one of your better post, and I agree.
John,
I'm sure glad that I planned ahead for retirement. Both my kids are aggressively saving, and planning for retirement; even thou their in their early 30's.
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slabbo
Trad climber
colo south
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We have done pretty well investing over the years, but now with my somewhat forced health retirement, healthcare is the #1 concern. Too young for medicare and lots of pre-existing stuff.
Without decent heath insurance , we could piss through $$$ easy....
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Bargainhunter
climber
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This is how a dirtbag with a minimum wage job can retire as a multimillionaire:
Start saving $5/day in a Roth IRA when you turn 20.
Put it in a low cost total stock market fund. Historically this type of fund has averaged about 10% annually.
At age 70 you will have accrued more than $2.3 million tax free.
That's compound interest at work for you.
You are welcome.
*[$1825 saved annually x 50 years at 10% interest compounded annually = $2,336,546.37]
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Gary
Social climber
Desolation Basin, Calif.
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No. It's always easy to criticize this sh#t when you're sitting high on the hog, isn't it?
"We don't need another aircraft carrier group, we have enough already and nobody attacks us anymore."
Until they do.
Interesting. Exactly which navy are we worried about?
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Roger Brown
climber
Oceano, California
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My family has worked in the trades for generations. Just middle class stuff for sure, but to me there is something special about having a trade. There is always work if you are willing to travel. We have been retired for a few years now, with a good union pension, and I can always work when I feel like building something. All those years I never hated going to work. Is that cool or what:-)
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jgill
Boulder climber
The high prairie of southern Colorado
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Retired as a college prof under the state system 19 years ago, and quit teaching 17 years ago. No regrets. It's been very good to me (and my wife, a retired HS English teacher). But my daughter tells me she will probably work until 70, and has concerns about SS.
When are the politicians going to deal with SS and Medicare? Means testing is a must. I have very wealthy friends who pay a tad more a month on their Medicare, and get the same excellent (IMO) care with very little out-of-pocket expenses. Single payer system works.
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