No question the amount you earn has a lot to do with a capability to save. Its the mindset/ability that makes it difficult for most along with all those variables that could possibly have something to do with them having ZERO saved.
In Dog Beers I've only had two.
Interesting article, I've noticed this for some time and know quite a few people who make good salaries and are in a similar position.
A lot can be blamed on the 2008-09 meltdown. Not only did some nest-eggs go from healthy amounts to near nothing, but then cash strapped families in bad mortgages as well as the millions who lost their jobs (there were millions of jobs lost) had to dip into their 401K'a to survive, many totally depleting them.
Another longer term symptom...401K's are not what they used to be. Back in the 90's they had much more generous matching than TSP...I knew a few folks who had 8% matching.
Today, nearly a third of companies who offer 401K offer NO Matching. For those who match, average matching is much lower than the 1990s also, near 4%.
And lets face it...we are poor savers, Its the human condition. Especially in our consumer economy where every commercial urges you to use your credit card to keep up with the Jones's.
Make no mistake, this is a huge crisis. And a big part of wage stagnation and no inflation. With an ever increasing senior population, we have a bigger and bigger portion of America that can't afford to pay higher prices for anything. That affects the costs of products, which stays the same, and the salaries/wages that produce those products then stay the same. In the very short term, I guess that is good for us. But not for long.
We need 401K laws like other nations have. Mandatory contributions from your paycheck of at least 3%. Mandatory matching of at least 5%.
And a lockbox...no dipping into your fund is allowed. Australia has this. Some might say this is too much Big Gov't, but we as a nation have proven we can't save for our retirement without the nanny to spank us once in a while. And the crisis they are creating is affecting as all.
CURRENTLY 30% C, 20% S and 50% G (as of COB 04/11/2024) 1st April IFT
Well said Sir.
[COLOR=#0000ff][FONT=comic sans ms][I]"In the land of idiots, the moron is King."--Unknown[/I][/FONT][/COLOR]
I honestly think the root cause of this is lack of education / ignorance when it comes to the importance of investing.
When I first joined the military, the TSP was there, but I didn't enroll basically because I barely heard anything about it. It wasn't until I started working my current job 6 years ago, and talking to some of the old timers that I got into investing. Nothing really changed other than just being informed about the importance of putting money aside for retirement (and a little bit of the know-how).
I agree with Tom, there should be a mandatory course in high school dealing with financial /retirement planning / investing.
Well, in order to really figure this out, you have to remove 29% of the population of 55-65 year olds as they never saved a dime because the other 71% of them averaged $104k into 100%
Their average retirement account is probably much higher once you remove that 29%
Still its scary.
I have been a saver for so long, I don't think I know how to overspend.
11.80% for 2012, 24.79% for 2013, -5.13% for 2014 , 4.94% for 2015 WTF?, -0.04% for 2016 , 13.09% for 2017======= 8.23% , Moved to Vanguard in 2018
Weatherweenie's Account Talk
Teddy Roosevelt: Patriotism means to stand by the country. It does not mean to stand by the president or any other public official. Retired on November 30, 2023 with 30+ years of service.
No I'm not counting on SS because as this crisis gets worse the Government is going to tax more and more of it away from us who have anything to support those who have nothing. SS is only going to be a welfare program for the retired poor. I think FERS employees are going to be hit extra hard in the future as we are accused of double dipping. We will be accused of having two government pensions (FERS & SS) and something needs to be done about that. That's why a number of us around here put so much stock in our TSP (and so much of our TSP into stocks ). It's the only thing we have any control over. My own investments is what I'm counting on.
Allocations as of COB Dec 28 : 100% S. | Retirement Date:Dec 2025
Past Returns: 2020 31.85%,2019 27.97%,2018 -3.36%,2017 13.10%, 2016 -1.79%, 5Yr Avg 12.61%
CURRENTLY 30% C, 20% S and 50% G (as of COB 04/11/2024) 1st April IFT
11.80% for 2012, 24.79% for 2013, -5.13% for 2014 , 4.94% for 2015 WTF?, -0.04% for 2016 , 13.09% for 2017======= 8.23% , Moved to Vanguard in 2018
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EFA (I Fund) (delayed) (Stockcharts.com Real-time) |
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