
1 in 3 Americans Have $0 Saved for Retirement (2016) - helloworld
https://www.gobankingrates.com/retirement/1-3-americans-0-saved-retirement/
======
fastbeef
This is really scary. The whole western world is in for a rude awakaning in
the coming years with regards to retirement.

Retirement is the golden carrot dangled in front of us for all our working
lives, an embodiment of Protestant work ethic - "work hard and you will be
rewarded in the end". However, very much has changed since retirement and
pensions were designed. I can't find a good source, but (in Sweden) when
pensions were introduced after WW2 people worked from their late teens until
they died (40+ years of productivity), produced 3 or more children per woman
(good population age distribution, the classic "pyramid") and the average
lifespan was 64 years (1 year before retirement).

Nowadays, many of my peers don't get a "real" job until their early/mid-
thirties (work for 30 years of producitivty), produce 1.7 children per woman
if they reproduce at all (leading to a top-heavy population where fewer and
fewer young people must support more and more old people) and life expectancy
is much, much higher. Now, these things are in of themselves good, but they
break the original design horribly. I really, _really_ hope that we can cross
the chasm to a robot-centric/base-income society before it all breaks down.

EDIT: Found this after posting:
[https://en.wikipedia.org/wiki/Pensions_crisis](https://en.wikipedia.org/wiki/Pensions_crisis)

~~~
bengale
Who could possible afford 3 children these days?

~~~
hellweaver666
I have 3 kids. I earn a decent wage but nothing excessive and my wife doesn't
work (she looks after the kids). We live in a city, don't own a car and walk
or bike most places.

They don't cost that much more if you're willing to be sensible (each kid
doesn't need a TV and a games console or even their own bedroom). We're very
moderate on how we spend our money - we don't blow thousands at Christmas just
to give kids tat they won't play with, we keep clothes and re-use them as the
younger kids grow up. We eat at home as a family, don't take extravagant
holidays etc etc.

~~~
dagenleg
And what part of your budget do the kids take?

~~~
buro9
Are you asking a person to justify the lives of three other people using only
a financial metric?

The value of a person is never purely the financial cost.

~~~
dagenleg
I am just curious. Why would anyone ever need to justify himself in the
anonymous comment thread?

------
sametmax
Not just in America. I don't have any saving at all, and a lot of people
around me neither, and I'm in France.

Now theoretically, we all pay regularly to the state for that. But in
practice, none of us believe we will see the color of it when we grow old.

Last week a dear and poor friend of us said she wanted to go to school again,
but that the one she wanted in cost 5000€/year and she didn't have the money.

We secretly discussed to create a common money pot to pay the tuition for her.
I suggested that we all put 500 € each and solve the problem.

All the participants were all above 30, none of them had children, all of them
were working. Half of them don't even own a car, as in my city it's a useless
expense. Yet it was a rude awakening: most of the people at the table could
not afford such an amount. Even once in their life for a very old friend.

So we discussed a bit, and it turns out most of us don't have any saving and
just live by the day. Comfortably, granted. They are not poor, they eat well,
they have clothes and can afford pleasures. But if anything happen to any of
us, we are screwed. We have no buffer of any kind.

The cost of life is, of course, part of the cause of this. But also the fact
that our lives are very instable : breakups, job changes, moving in/out, make
it hard to save. It's also a cultural problem: enjoying ourself have been more
important that savings.

But there is also another issue: individualism. The thing is, most of us could
probably find 500 € to give away. But the solidarity is not strong enough for
this effort.

So if friends won't get out of their way to do that, I have little hope that
society will solve the retirement puzzle. People care about _their_
retirement, not about everybody's retirement, not how society will find a
balance or how their neighbor is going to survive.

~~~
oskarth
> So we discussed a bit, and it turns out most of us don't have any saving and
> just live by the day. Comfortably, granted. They are not poor, they eat
> well, they have clothes and can afford pleasures. But if anything happen to
> any of us, we are screwed. We have no buffer of any kind.

The solution to this largely a matter of a shift in attitude. Start saving 10%
of your salary right now and stop buying new clothes, eating out etc. Having a
buffer is way more important. There are plenty of resources for learning how
to live frugally. The benefits of having a cushion, however small, are
enormous.

Of course, that doesn't take away from the other points you mention. But it's
by no means an unsolvable problem for the average comfortably-living
individual.

~~~
sametmax
I agree, hence the "It's also a cultural problem".

There is also the fact that we know the French health care system, the social
aids you get if you loose your job, and your family will all come into play
for some category of problems.

And there is the gamble for more comfort vs responsibility. My generation
really don't want to take any kind of responsibility for anything, including
society, the planet and their own life.

But even if you consider that:

\- saving 10% of my income will not, in any way, let me live through my
retirements. Not at half of my current life style anyway. And I do earn more
money that most people.

\- those are people in a very comfortable situation. Now take people with
children, a loan and a standard job, and you have a much less simple picture.

\- most people have been told the story that the retirement system will work,
or that we will make it work. Beside, they don't thing 30 years ahead for
anything.

\- a lot of people won't make rational choices in their life. Taking a loan
they should not, making a child they can't afford, getting married with the
wrong person... Expecting people to save is already at another level of
planning. We failed at educating people, but we also told them it was ok to do
what they were doing.

\- we have a huge value scale issue here. frugality, quality, solidarity...
Those are not the thing that society promotes. Solving the retirement problem
is not just an economical issue. When banks are bailed out, medias scream
"money and consumption" and Trump rules the most powerful country in the
world, convincing somebody to not go for take out is quite hard.

\- fixing and cookie are getting a lost art.

\- things do cost way more. 10% is a lot for some people.

~~~
keithpeter
If you can manage to save enough to live on for 6 months at your present level
of expenditure you have some kind of insurance against the idiocies of life
and employers.

~~~
sametmax
I agree.

Although I find it very peculiar that my parents could live the life my friend
live, but afford children, have saving and yet now have a retirement.

A 30 years old single person with no children an a job that doesn't have a
loan or crazy spending habits should not have to choose between savings and
pleasures.

~~~
keithpeter
Yup the biggest social change in my generation (I'm 60 soon) was women going
out to work. Mysteriously, having two wage earners per family has not actually
increased apparent wealth. In fact it has decreased.

In UK housing has become much more expensive as a proportion of earnings, and
wage rates seem to have declined in real terms.

------
headmelted
Maybe you shouldn't save for a retirement then. Maybe no-one should.

I think about this quite a bit. I'm quite frugal in my personal life (although
certainly I could be more so), so I actively save for the future as a matter
of course.

I'm also aware of the statistics around personal debt levels and net assets in
the public at large and while it's clear there's a rude awakening to be had,
I'm less and less convinced over time that the "awakening" is going to be of
those who have no savings in place when they need them.

It seems pretty apparent to me that if the majority of people have no assets
in a couple of years/decades (regardless of why that might be) and wealth
inequality peaks to such extremes, then it's very likely the first political
candidate to offer hard socialism (debt-driven basic income guarantee coupled
with ultra taxation of higher net worth individuals) will sweep in an
election, and the money problem will correct itself at an individual level.

Of course this isn't a solution to the living-beyond-your-means problem, and
causes it's own problems (inflate the currency with QE, capital flight of high
net worth individuals to friendlier jurisdictions), but I don't think that
will matter in this scenario.

If the nature of people now is to be relatively short-sighted with regards to
money, then what reason is there to expect that people in general are going to
be any different in the future?

I fully expect it will be people who _are_ saving their income that will pay
to fund those who are not in the future if the latter is the majority.

~~~
kamaal
>>it's very likely the first political candidate to offer hard socialism
(debt-driven basic income guarantee coupled with ultra taxation of higher net
worth individuals) will sweep in an election, and the money problem will
correct itself at an individual level.

As someone who has had experience living in that system let me tell you the
moment something like that can even happen. Most rich people from whom you
could take significant for your socialist schemes will leave the country.
Leaving behind a very very small part of usable money for your schemes. It
will be over before it begins.

You have also now scared away almost every single economic prime mover
individual from the economy to a point almost any body smart will only have
one option for a good future- To leave the country and immigrate to else
where. And there will always be some capitalist heaven which will welcome all
this smart people with open arms.

With this set up your common pool of money from which you wished to pay for
your Basic income will shrink year after year, until bankruptcy and total
investor loss stares you in the face.

>>I fully expect it will be people who are saving their income that will pay
to fund those who are not in the future if the latter is the majority.

They won't(rightly so) and that is what will be the biggest problem in the
times to come.

The only way in the future is to make good decisions for the future or suffer.

~~~
hkmurakami
The United States has an exit tax to prevent such "problems" of capital
exodus.

~~~
kamaal
This is assuming they haven't found a tax haven where they already park their
money.

These days no one stores money beneath their mattress. Most money is in global
businesses. So exit tax strategy is already a failure. Capital exodus today is
called 'foreign direct investments'.

Besides you still are left with a problem with losing a lot of bright young
people every single year without whom and taxes from their ventures you won't
have anything to run your schemes on.

~~~
hkmurakami
The global business holdings are typically held in US accounts. Transactions
from there are 100% traceable.

Overseas accounts in HK and Switzerland are being cracked down hard. (I mean
if you want to break the law, you can always break the law...)

It's not that easy to move funds into tax haven without some risk (ex: whether
your GRAT will actually pan out) or advance tax event. (The easiest way is to
start businesses in a tax haven in the first place, which is different from
moving capital once it has been created).

Great point about human capital. I would leave for Canada or Singapore under
such a regime as well!

~~~
kamaal
You can't stop people from leaving. Look at USSR, India or any other ex-
socialist economy. Unless you turn your country into a kind of North Korea,
these things can't be stopped. And even if you did turn your country into
North Korea, the rich will likely be in the top party positions and do
whatever is best for them.

Every other socialist economy has had this thing in the past to make it hard
for people to leave. They don't work because you can't make people stay
against their will.

Most countries have now learned this the hard way. On the longer time period
you can only encourage people to do good work, you can't punish them into
doing it.

~~~
hkmurakami
Ah ok I think I get what you're saying better now. Once people decide they're
leaving and _never coming back_ , whatever rules you have in place are
worthless since they're going to ignore your exit taxes or whatever since
they're not coming back and they think your regime is illegitimate anyways.

------
maaaats
A few years ago I learned about the FIRE-community. Financial Independence,
Retire Early. I'm more in the FI part, saving a big portion of my income. By
living on roughly half my income, I save up for a "year of not working" each
year. This gives me a lot of freedom and ease of mind.

Keeping this up, one could theoretically retire with 16 years of working
according to this calculator. It also shows americans saving the least
[https://networthify.com/calculator/earlyretirement](https://networthify.com/calculator/earlyretirement)

~~~
wiz21c
Honest question : how much do you sacrifice to be able to live on roughly half
your income ?

~~~
maaaats
People like to ask that question, as it gives them an easy out; "those guys
probably live boring lifes".

I'd say I don't sacrifice much. I spent a month income on vacation this
summer, went skiing in the alps this winter. I have hobbies I enjoy where I
don't cheap out on gear or experiences.

I'm privileged to have an income that enables this. But still I'm baffled on
how my peers with the same income use all their money. And I don't really see
how they are able to spend most of their money, and how they benefit from it
compared to me. For comparison, my salary is about $70K in Norway.

IF I'd felt I now sacrifices something of importance, it still would be worth
it. I can take years off and do what I want, switch to a lower paying job with
higher QoL etc, retire early or other things, while those not making the same
"sacrifices" will have to work.

~~~
silvestrov
Getting a new car every 3-4 years is _extremly_ expensive. A lot of people
think they can't live with an old beater, that they absolutely must have a
"new-ish" car. An old beater for those people is a 5 year old car. An old
beater for me is an 15-20 year old car.

"Warren Buffett lives in a modest house that's worth 0.001% of his total
wealth".

~~~
SmallDeadGuy
An old beater car can be a huge inconvenience though. My 16-year old (when
bought) Saxo had to have bearings replaced, but the bolts for the suspension
arm were so rusted they snapped during the process and cost me 1/2 the price
of the car to get a new arm and bolts, too. Replaced that car with a 15-year
old Astra for a little more oomph (1.6L over 1.1L) which recently had it's
handbrake rust onto the disc. A few whacks with a hammer fixed that, but I
couldn't use it until after the place I wanted to go was closed because I
needed my girlfriend to be able to hit the foot brake when I hit the handbrake
off.

Both cars required a replacement battery within a year of buying, as well as
new stereo wires for the Saxo which I had to acquire from a Peugeot 106 in a
scrapyard and various bulbs for the Astra. These problems are less about age
but more about previous owners and myself.

I can't wait until I can afford a newer car, something closer to 5-10 years
old instead of 15-20, because I won't be praying that my car will pull off
every time I haven't used it for 3 days.

------
foxfired
This is a direct testament to:

> Socialism never took root in America because the poor see themselves not as
> an exploited proletariat, but as temporarily embarrassed millionaires.

~~~
patrickaljord
This is assuming that socialism helps the poor, which is something anyone who
has even very basic knowledge of 20th century history knows could not be
farther from true.

~~~
bhaak
I think you and the OP have a clash of definition and are looking at different
models of socialism.

You look at the socialism how it was conducted in the USSR and Eastern Europe
where OP is probably looking at Western Europe.

Socialism isn't well defined and ranges from far left to Democratic socialism.
Discussions with an American POV often neglect to acknowledge that in Europe
lots of governments in Europe have socialist parties in them.

~~~
patrickaljord
I'm French, I use the definition of socialism other French thinkers have such
as Tocqueville, Jean-Baptiste Say or Bastiat. This definition includes all the
kinds of socialism you described and as these thinkers say they are all bad
and since the 20th century we also know they are criminal the more they are
enforced.

~~~
bhaak
Whereas we already know since the 19th century that capitalism is criminal the
more it is enforced?

If your government is criminal it doesn't matter if you're living in a
capitalist, socialist, communist, or pastafarian state.

I fail to see how the mixture of socialism and capitalism as it was
implemented in most of Western Europe in the second half of the last century
could be used as an argument for the hypothesis that "all kinds of socialism
are bad".

~~~
patrickaljord
Capitalism doesn't need to be enforced, people willingly exchanging things
happens naturally, regulating and taxing these exchanges requires initiation
of force though (socialism).

> I fail to see how the mixture of socialism and capitalism as it was
> implemented in most of Western Europe in the second half of the last century
> could be used as an argument for the hypothesis that "all kinds of socialism
> are bad".

And there lies the problem. Just Google issues of Keynesianism and why it's
bad or have a blast and go read some Tocqueville, Jean-Baptiste Say or
Bastiat.

~~~
copyright_sux
Of course full capitalism needs to be enforced. People using the resources
they need happens naturally. Protecting private property requires initiation
of force. Just Google issues of Libertarianism.

~~~
patrickaljord
If your body is your private property, then anyone trying to trespass without
your consent is initiating force and enforcing is not initiation of force. I
consider the fruit of my labor to be, like my body, my private property and
anyone trespassing it without my consent is initiating force.

~~~
copyright_sux
Most people protect their body, because they have instinct for self-
preservation, regardless of their beliefs about property. You presented no
argument why we should treat natural resources or fruit of labor the same as
human body. You just assume Libertarian definitions. It's a bit like
fundamentalist religious person saying "I consider love to be a product of a
god, so you feeling love confirms gods existence." There is no interesting
argument in that statement.

~~~
patrickaljord
Actually most mammals instinctively defend with force the fruit of their labor
or their private property. Just try to steal a monkey's food of try to walk on
the land of a lion he peed on to mark it as his and see what happens to you.
It's natural to most mammals (and even reptiles) to protect their private
property and fruit of labor as if it was their own body because their survival
depends on these things not being trespassed.

~~~
copyright_sux
I don't see why rules of human society should be based on a subset of behavior
of animals, that you conviniently cherry-picked.

~~~
patrickaljord
We're animals too, mammals to be precise, sounds like an honest cherry-picked
as it's literally the family of animals we belong to. Hard to fight one of our
most basic animal nature: the defense of our body and personal territory and
property.

------
jldugger
Well, that's not super surprising, for a variety of reasons.

1\. Young people don't save. The survey defines millienals as age 18-34. I
figure half of that group is working low skill jobs and can't afford to "save"
(more on that later), or attending college and is not eligible to 'save'. And
many of those graduated at age 22 should spend the next 10 years focusing on
student loan debt repayment -- very few investments pay off better than 6.8
percent fixed!

2\. Social Security covers spouses. Stay at home moms who divorce at year 11
after a midlife crisis gone wrong are eligible for 50 percent of their
spouse's eventual benefit. More if they're dead.

3\. Social Security does alright by low income workers. Reuters estimates a
hypothetical 'return' of 6.79 for a very low income couple born in 1943.
[https://www.reuters.com/article/us-column-miller-
socialsecur...](https://www.reuters.com/article/us-column-miller-
socialsecurity-idUSBRE89H0YG20121018)

4\. A lot of Americans live paycheck to paycheck. There was that Federal
Reserve study that said something like half of americans surveyed couldn't
come up with 400 dollars to pay for an emergency. I don't anyone actually
thought 'maybe it's because their savings are all locked up age 59 & 1/2'.

~~~
JumpCrisscross
> _Young people don 't save_

Balancing that equation, however, one can expect-- _ceteris paribus_ \--those
people to have some combination of lower (a) taxes to fund education for the
next generation or (b) costs associated with having to pay for their
respective kids' college costs (since those kids will also take on debt to
finance education). Blowing a hole in this model is the increasingly-glaring
reality that today's generation will have received no support from the last
one, thus being forced to finance its education _and_ have to pay for the next
generations' educations.

~~~
icelancer
The best fix for this - which is in the works - is destroying the higher
education model through MOOCs and alternative credentialing programs. The
education bubble can't be long for this world.

~~~
kamaal
This makes the future even more scarier. In India where I live, there are
colleges and schools aplenty in too much abundance. To a point you could say
most institutions are bad replacements for MOOCs. The problem with things like
these is Universities and college education, offer time based deadline within
which you need to finish your academic work.

Most people aren't that disciplined, if left on their own, many will
procrastinate heavily.

But those serious will make great progress, the gap between the two groups
will too high. You will arrive back at the inequality problem.

~~~
icelancer
>But those serious will make great progress, the gap between the two groups
will too high. You will arrive back at the inequality problem.

Yes, but with several billion (trillion?) dollars less in debt. That solves a
major inequality problem on its own.

~~~
kamaal
You solve a smaller problem of debt accountability. But you install a bigger
problem of human motivation. From all my experience in all my schooling. In a
class of 100 kids, maybe 10 have sufficient motivation to do it purely if they
relied on MOOC's and do it from home. The remainder will likely play games and
sports all day, or while away time with their peer groups. Or worse do drugs,
cigarettes or alcohol way early in life.

The problem with things like MOOC's, Open source projects etc is you need be
very motivated for long periods of time to keep with college education. That
doesn't happen even as of now.

~~~
jononor
With a MOOC the costs and barriers to entry are _alot_ lower than for college
education. One would hope that this enables people to 'shop around' a bit
more, finding something they are actually interested in - which is one
important part of motivation. The quality of the lectures available can also
be much higher, e.g. I can see and follow what top professors in the field are
up to regardless of geographic or other access problems. Over time, I also
hope for a bit more specialization - instead of mostly Phd/professors wanting
to do research having mandatory lectures, we'll have more people passionate
about teaching itself.

Not that there aren't challenges as well...

------
oliyoung
All of this is thankfully foreign to the average Australian, an employer in
mandated to pay +9% of an employee's salary into a superannuation account that
cannot be withdrawn from unless you retire (or suffer “severe financial
hardship").

The average 39 year old man will retire with AU$300k, while Women retire on
AU$180k.

[https://en.wikipedia.org/wiki/Superannuation_in_Australia](https://en.wikipedia.org/wiki/Superannuation_in_Australia)

~~~
xxxxxxxx
Unless you get divorced and lose half. Divorce twice? Now you 're in really
big trouble.

What if you die before retirement? You have made the mandatory payments, but
got nothing for it.

What if the stock market crashes the day you retire?

The Australian system is not perfect - it's a compromise.

~~~
oliyoung
I've been divorced, it's not included, if I die, it's my estate, and it
survived 2007's crash

------
mjevans
I don't believe the stock market is a stable or good place to invest
(anymore).

I think the historic performance figures of the US stock market related to the
unusually positive world position of the country after the last world war.

There was a baby boom, there was a space race, there was a 'cold war' and lots
of planned spending and many tech advances.

I've seen an unending series of bubbles (and suspect they were happening even
when I was a kid); the baby boomers looking for places to invest for a quick
return, only to have their nest eggs smashed by the greedy sales people who (I
at least hope) believed those were actually sound investments even though they
should have known better.

Thus, I see the stock market as almost a casino; with odds rigged for the rich
with not-quite insider trading.

My 'retirement plan' is to keep working, and to keep working, and to maybe
live long enough that real socialism can happen after automation eats every
job I don't want.

~~~
sddfd
What about exchange traded funds?

The general trend is still upwards and the Bubbles don't change that.

Of course if you get in just before a bubble bursts, you lose at first and may
have to wait a long time to break even. But judging from history (data since
1900) you will break even eventually.

~~~
blubb-fish
That's my strategy.

I invest in 1000+ Euro batches in ETFs. By now I covered half of the world or
more.

Nonetheless it is a bit frustrating to see ETFs bouncing up and down -
everytime Mr Trump says something stupid you can expect the MSCI World to drop
and with it everything else, too.

Even a globally diversified ETF seems to be indirectly highly US centric. The
DJ drops - then also ETFs focusing on Asian EMs drop. It's a bit ridiculous.

And sometimes I am sceptical if the average market growth of up to 10% per
year can be expected for the future.

~~~
apexalpha
>Nonetheless it is a bit frustrating to see ETFs bouncing up and down -
everytime Mr Trump says something stupid you can expect the MSCI World to drop
and with it everything else, too.

That is all part of it though. You shouldn't look at 1, 2 or 5 year yields.
Look at 50 year yields. It will go up on average over all those years.
Including crises like 2008.

You only die on a rollercoaster if you get off in the middle.

~~~
blubb-fish
come one - 50 years? :D I'm beyond 30 - in 50 years I'm likely calling a
little wooden box my home. So, let's say 20 to 30 years. That's the horizon I
calculate with.

You are totally right with performance to be looked at for long periods of
time. But I sometimes reflect on my ETF prices in relation to the news and I
feel like there is a deeper and deepening fundamental issue with economy that
might severely handicap my funds even on a long time scale.

~~~
apexalpha
Fair enough, but the point is that 5 tot 10 years is realtively short term.
Imagine looking at the stock market from 2006 to 2011. Ouch!

But then 2011 until 2016 looks amazing! Wow!

There will always be up and downs. The trick is not to try and time them, just
ride it out.

And don't forget to put a bigger percentage of your portfolio in bonds / safe
things the older you get. You don't want to retire one year after the next
'2008' and have everything in stocks.

------
will_brown
I wonder what these figure would be in countries like Russia or China.

I would also say American's are simply bad at planning for the future, and
highlight the fact that 75% of Americans die intestate (or without a Will).
But, I think the truth is that is only part of the explanation. While a Will
would benefit and be applicable to everyone, not just people with assets,
retirement is purely for people who have some type of financial surplus and
lets get real. Most Americans are debt financed, from housing, to
transportation, to schooling, to even putting food on the table.

It would be very interesting to see how many of those 2/3's who are saving for
retirement are actually debt financing their retirement funds (which
admittedly makes sense with employer matching), meaning they are living off
credit and going (further) into debt while simultaneously _saving for
retirement_. I would venture to guess the numbers are much worse than this
article even concludes.

~~~
lsiebert
I'm not sure what fundamental characteristic of Americans would make them
significantly different then the overall population of the earth in terms of
planning.

Systemic economic reasons seem more likely. I'd note that you have to have
wealth to pass it on, and that economic mobility in America has been in
decline since the 80s,
[https://www.theatlantic.com/business/archive/2016/07/social-...](https://www.theatlantic.com/business/archive/2016/07/social-
mobility-america/491240/)

~~~
jk2323
Americans, both people and companies, are much more short term focused then,
lets say Germans or Nordic countries in Europe.

And again, no comparison with let's say China. A government in China may not
only make a 5 year plan, but a 50, 100, 150 year plan. This may look mind
puzzling to you and you can doubt it's effectiveness. But nevertheless they
do.

It is said that Deng said, when asked what he thinks about the French
revolution (1789!): "It is to early to tell"

------
peterburkimsher
I don't expect to live in the same country 5 years from now. I currently live
in Taiwan, and hope to move to New Zealand at the end of the year. My dad told
me I should think about retirement, but I see no reason to save for retirement
when I can barely pay for the visa application. I've already made the
lifestyle sacrifices - I don't even have a driving license, I can't afford to
marry, and I travel once or twice a year only to visit parents.

Once, I had money that I thought I didn't need for a year. It was a
scholarship from university, awarded simply because I studied engineering. I
decided to invest it. I bought $1000 of gold, and $1000 of shares. I wanted to
buy Apple shares, but the banker at UBS told me that I would have to pay huge
fees simply to get the shares - unless I bought shares in the bank, which had
no fees. But that was 2008.

The bank shares went down to $300. The gold went up to $1070. It was a
terrible investment. I lost all trust in bankers.

During that year, I went on exchange programme to California and some
situations in life meant that I desperately needed the money. But it was
locked up in shares and gold, and I couldn't get to it. So now I just keep a
current account. Major life problems happen to me quite regularly, and I can't
have my resources locked away when I need them.

Maybe I'll be able to save after I settle down somewhere. But I also wonder
whether just giving it all away to friends would provide a better investment.
Social capital is resistant to inflation, war, banking crises, environmental
disasters, and everything else I expect to happen during my lifetime.

~~~
tehlike
giving it all away to friends? terrible idea. Most often in life, you are on
your own.

------
StanislavPetrov
What makes this even worse is that a lot of "savings" that people DO have put
away for retirement are in the form of pensions, bonds, and other financial
obligations that are underfunded and mostly illusory. You need look no farther
than the state of Illinois to see just how bad the situation can get. A lot of
people who think they have pensions and other payments coming from the state
of Illinois (and soon, many other states, cities, and municipalities) are
going to be very, very disappointed. We are drowning in debt on every level,
both personal and governmental, and the FED and other central banks are
running out of ways to make it seems like it isn't a big problem.

~~~
kamaal
Pensions have long been a mess because of shady union practices. They
generously award over time to retirees in the last 3-4 years of service, this
often sends up their average compensation by a factor of 3 to 4. Then you also
have other benefits. No pension fund can pay for something like this. So you
have to take money from the tax payer to pay for these people. The day tax
payers decide to call it quits, it will all collapse.

Plus this still doesn't say anything about people in non-govt sectors.

------
lsiebert
Health care, education and other costs keep rising, (even when adjusting for
inflation).

Wages have been stagnant when adjusting for inflation.

And hey, it's almost time for the census to report. September 12, 2017.
[https://www.census.gov/newsroom/press-
releases/2017/advisory...](https://www.census.gov/newsroom/press-
releases/2017/advisory-income-poverty.html)

~~~
l5870uoo9y
If we are to realise the great potential that lies ahead with mass
automatisation and AI, we must ensure that whole of society benefits from
this. There must be more focus on sectors such as logistics which are being
hit first by mass automation. We need to define a new social contract between
employees, workers and technology to make this work.

~~~
lsiebert
Hmm... Contracts tend to favor those with more power. I worry that the wealthy
will see those less fortunate not as a potential engine to accelerate overall
growth, but as a burden, and, with the weakening of workers rights and unions
accelerated by the trends you mention, the new social contract may be less
beneficial then even current circumstances.

In which case I'm sure there will be those who blame immigrants, people of
color, the government, unions, etc. Certainly it won't be the wealthy who are
blamed, they will be instead admired for their supposed acumen, despite the
fact that the majority of the wealthy inherit their wealth, and that majority
has been rising.
[https://www.economist.com/blogs/buttonwood/2014/03/inequalit...](https://www.economist.com/blogs/buttonwood/2014/03/inequality)

------
lwhalen
I have accepted a long time ago that I will be unable to 'retire' in the
traditional sense. I fully expect to be working pretty close to 40+ hours a
week when I keel over (hopefully quickly, and without a prolonged illness).
"Die old, happy, and fast".

------
askvictor
Clickbait-y title, or at the very least a sensationalist and simplistic
interpretation of the data. That 1 in 3 is mostly young people; they have
neither the ability to save (due to low wages, student debt, being priced out
of the market) nor the incentive (retirement is too far away, perhaps also
concerns the stock market is not a safe place). Probably not much trust in the
system overall either, given how the older folks seem to keep pulling the
levers to maintain things for their own benefit.

------
micheljansen
A few months ago, someone gave me a simple piece of financial planning advice
that completely changed the way I think about retirement.

Most financial planning advice focuses on regularly putting money away for
some returns. Returns are important, but they are only part of the story. Much
more important is that putting a portion of your income away every month
creates habits that stick by making you get used to having less money
available, while _at the same time_ ensuring that in the future, you will have
more available. It cuts both ways!

Think of it like this: say you have an income of 5.000 per month. You don't
put away anything away and when you retire, you receive a state pension of
1.000, so your income drops by a staggering 3.000 per month.

Or you could pretend that your income is only 4.000 per month and put away the
rest. You live a bit more frugally, but now when you retire, your pension is
3.000 per month, so the difference is much smaller.

Of course there are also other ways besides saving for pension that address
the amount of money you need in the future, rather than increasing the money
that you have available from a pension. Buying a house and paying it off is a
good example. The principle is the same: reduce the gap between your
income/expenses now and your future income/expenses.

Disclaimer: I am not a financial advisor, so please do not base major life
decisions on this.

------
godzillabrennus
The wealth imbalance taking shape over the last 40 years is likely why.

Everything in our modern world feels like it's about to pop. Too much change
too quickly for our establishment to adapt.

~~~
WalterBright
Don't overlook the massive increases in government spending at all levels.
That money has to come from somewhere.

~~~
RobertoG
Government spending could be called also government investment.

Money is only a number. Real resources is what have to come from somewhere.

------
scarface74
I come from a middle class background and I haven't personally seen what
retirement based on your own savings looks like. My grandparents lived off of
social security, my parents are living off of a combination of pensions,
social security, my mom sort of working as a consultant when she gets bored
and generous company stock benefits from when my dad was working as are most
of my relatives of that generation.

Because of a lot of dumb decisions made earlier in life, my retirement savings
are relatively meager. But on the other hand, I don't dream of the day that I
can retire. My job as a software developer is not physically demanding and my
job was my hobby for 10 years before I started working professionally. In 20
years of working, I've never hated my career. I imagine retirement for me to
be doing contracting/consulting/ teaching part of the year instead of working
for a full year.

I wouldn't need to retire to enjoy my hobbies -- I enjoy my hobbies everyday
and get paid for it. My only other hobby is exercise and I don't need to
retire to enjoy that.

------
throwaway2016a
To relate this to Hacker News even more...

We are constantly told that we should risk our financial freedom to start a
company. Go without pay take massive credit card debt to fund our company,
etc. and we glorify people who have done that successfully and write off
people who failed.

Or worse, told to go without pay / deferred pay / less pay to work at someone
else's company with less than 5% equity. Often less than 0.5%

When someone tells me they felt a $4000+ booth at a conference was so critical
to their company that they maxed out their personal cards I cringe.

What this survey doesn't seem to have is how many of those people have
negative savings (aka, debt).

Also, it is unclear to me if homeowner equity is in the mix. Where I am the
average house is $250k. In my neighborhood that is $400k. If I pay my mortgage
diligently for the next 25 years and do basic upkeep (new roof, new furnace,
etc) I will be in the $300k+ bracket too.

I know for a huge number of people home ownership isn't an option but I'd
point out it could very well explain why a large portion of people sit at
$300k+.

------
michaelbrooks
I'm from the UK and have little to no savings. What has helped me to save is
using a Messenger bot called Plum. It looks at my income and outgoings and
will save little bits of money when it thinks is the best time to take it out.
It also knows exactly what amount to take out at the time as well and is super
clever. I have managed to save just over £200 over the period of 5 months
which may not seem like a lot, but it's the most I've saved and has helped me
a lot.

Imagine how much I can save in 5 years if I don't take anything out and this
is without having to lift a finger or even think about what I need to do in
order to start saving. If America has anything like this, then I recommend you
try it out.

~~~
iuguy
If you want a good place to go to look into getting more for your financial
future that's UK relevant, the /r/ukpersonalfinance reddit has a really
amazing flowchart and they're really helpful.

~~~
michaelbrooks
That is definitely a great subreddit. I have also created my own site to help
people in the UK save and manage their money through the use of apps and bots
[0].

[http://aisaver.co.uk](http://aisaver.co.uk)

~~~
iuguy
That looks really really good! I hope you're getting signup referrals. I think
it could be a good thing to post on the sub.

------
Aoyagi
But they do have a new iPhone the week it comes out, right?

~~~
kobeya
The 1 in 3 that don't have any savings? Probably not.

~~~
Sholmesy
I would say they probably do.

I think the OP's point is that those that save often spend or debt-finance a
lot of things like phones & cars.

I feel slightly jaded when I see people with $1k phones who clearly can't
afford it, when I'm rocking an iPhone 5. Probably not a healthy psychological
state and I feel a bit like a "financial puritan" at times, but it irks me for
some reason.

I understand debt and having access to capital is useful in a lot of ways
(expansion, plant & asset purchase etc), but I feel like being able to buy a
rapidly depreciating asset on credit, at extortionate rates, that provides no
additional utility to capture value (a $200 and $1k phone have similar
utility) is a bit of a ridiculous scenario.

------
gasof
What incentives do people under 30 have left to build a pension?

Is it a better deal than schemes like putting 80% of your extra money on the
bank and 20% in riskier investments?

~~~
gehsty
In the UK the benefits of paying into a pension are tax based, you don't pay
tax on what you put in, and you then take it out at a lower tax threshold on
retirement (compared to what you would pay to have it in your pay packet).

If you are a higher rate tax payer this is a huge benefit - you can take up
£40k before it becomes taxable, tax for high earners can be 40% - but it
doesn't really help people on lower incomes who are at most risk of not having
any savings.

~~~
anonymousDan
Aren't you at risk though of the government shifting the goalposts (e.g. wrt
retirement age)?

~~~
danielmg
Not really. They are moving the state pension age out but the private pension
age stays static at 55. They have also given more freedom on how to use the
private pension funds come retirement.

THe idea is to reduce the burden of the state pension. It would be counter
productive to do anything counter to that.

However - the left keep wanting to take away higher tax relief on pensions.
Which sounds great unless you are a nuclear family where 2 people will rely on
one person's pension (like my wife will - we also have other compounding
circumstances). If they cut this relief I'll leave the country or go self-
employed and play the system, as it will push my marginal tax rate to a stupid
rate.

------
edison85
Luckily social Security is there and spouses that don't work receive 50% of
the benifits so there's a big chunk of the 1 in 3. Add up all your yearly
earnings capped at $110k today's dollars, convert to today's dollars, divide
by 420. Take 90% of first 850, 33% of 850-5200, and 16% of the rest. If you've
worked minimum wage for your entire life and your spouse stays at home, that's
still 95% of your yearly income. If you have home equity that means no
mortgage payments or even a potential reverse mortgage.

If you are Middle class, can move to lower CoL too. It's really not that big
of a problem if we increase age/decrease benifits for extremely high earners

------
mschuster91
Doesn't surprise me, and the problem exists also in countries like Germany.

Common point seems to be that "millennials" (and low-earning people) in cities
suffer from extremely high rents which take away their ability to save
anything, especially for downpayments on an owned flat/house, and those on the
countryside have low costs of living but often enough nothing more than Social
Security to pay the bills. Trump didn't get elected in the flyover states
without reason, and the AfD in Germany has their stronghold in the poorer
parts of Germany.

In addition, in the US you can go bankrupt from being injured. Your medical
system is... unimaginably bad from German POV.

------
NicoJuicy
This is actually depressing, i save over 1500 € / month in Belgium...

But, i need to invest more. And then again, i don't spend money on stupid
things ( perhaps reason #1 why people can't save money.. I don't need the
latest iphone or anything. My car is used from 2008, some people just want to
buy a new one and spend 5x as much for a vehicle)

Only 2 ways to get rich: Invest or save more than someone else.

~~~
aidenn0
In the US, if you don't have health insurance, than having savings is arguably
unwise. A single illness or injury that requires an ER visit can easily total
$250k which would completely wipe out the savings of someone making 2x the
minimum wage ($7.50/hr) and saving at a rate of 10%[1].

If you don't have the assets, then the hospital is limited in how much it can
recoup from you, and they usually write it off rather than garnishing your
wages. Might as well live large until that happens.

1: Also as a note, this person making double minimum wage and working 40 hours
per week is making ~2150€ / month. There are vast numbers of people doing
_much_ worse than this. In fact it's fairly close to the 33rd percentile of
household (not individual) income in the US (~$30k/year which works out to
2121 € / month).

~~~
nicky0
As someone from a country with a state care system. This is fascinating, I
never heard that perspective. Why save, when they'll just come and take it
from you when you get sick! It's pretty tragic but it makes perfect sense.

------
codingmyway
Bring back 'long life' insurance, the one where the money of those 'lucky'
enough to not run out of money before they die goes to the survivors who need
it.

It became taboo and phased out or banned because of obvious conflicts of
interest and incentives but if managed well to not enable those incentives it
could make a come back.

------
cbanek
I also imagine that some of the people with $0 saved toward retirement also
have it even worse than that, and may have a negative net worth, especially
after the housing crisis. Things like credit card debt and payday loans will
bleed you dry before you can even think about retirement as well.

------
meirdavis
I don't think this study paints a complete picture. It asked about specific
retirement funds, rather than wealth in general. If someone aged 50 has 20k in
an earmarked retirement fund but a net worth of 1.5m, that person is fine, but
considered by this study to be unprepared for retirement.

~~~
systematical
Okay, but how many Americans have that kind of networth?

------
ge96
I know everybody gets old but this idea of "saving for retirement" rather be
limber and free than old and free. I realize it would also suck flipping
burgers at 70.

So I don't really have an argument, chasing the dream, maybe not see the age
of retirement.

------
chank
It's way worse than that. Less than half of respondents even have more than
10K saved. It's likely that most still won't have enough at retirement age to
do so.

------
robertlagrant
The graphs showing what different ages groups have saved for retirement seem
to forget that older people have had more time to save.

~~~
dredmorbius
Analysis will generally look at what cohorts had at the equivalent stages of
their lives.

------
maruhan2
ok so if we assume that the average life expectancy is 90 years old with equal
distribution. 1/3 of Americans are 30 years and younger. Most people saving
starting then. Looking at it that way, 1/3 seems like a high number.

