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One-Quarter of Working Americans Have Zero Retirement Savings (wsj.com)
60 points by spking 31 days ago | hide | past | web | favorite | 24 comments

Also, a quarter of working Americans are early in a career, and people generally earn most of their retirement wealth later in a career.

Here's [1] a interesting set of data that demonstrates this. Here's an age breakdown of the worforce [2].

Since about a quarter of the workforce is under 25, I'd not expect them to have much retirement at all. Sure some older people also have too little, but this article makes it sound much worse than it probably is by treating wealth as static.

So since younger workers generally (and historically) have had little net worth but ended up with decent net worth, I wish articles like this would point this effect out and explain the nuance better.

[1] https://dqydj.com/net-worth-by-age-calculator-united-states/

[2] https://dqydj.com/workforce-by-age-calculator-united-states/

> Since about a quarter of the workforce is under 25

Your [2] source shows 12.18% under 25 in 2015.

You’re right. But the overall point still stands when comparing with net worth by age graphs. People have median low net worth till later in their careers. And early on much of that worth is equity, not retirement savings.

This is kind of an unhelpful statistic. Thanks to extended adolescence and over education many Americans don’t really start working until their mid to late 20s. So the fact that younger workers have no savings doesn’t say much about the economy. It also ignores social security. Even if you earn $15,000 a year, so long as you work 35 years, social security will keep you around the poverty level. It also ignores pensions, which 13% of workers (and almost a quarter of baby boomers) are entitled to receive.

Oh Lord, it says a lot about the economy. People aren't entering extended adolecense because they love Mom's spaghetti.

I don't have a WSJ subscription but are the people that don't start working until the mid to late 20s counted as working Americans?

I'm also not sure if that stat is saying anything about the economy. Rather it is an observation of the personal finances of a segment of our population.

I wish Social Security was the icing on the retirement income cake but often it is the other way around.

The data cited in this article comes from the Federal Reserve's Survey of Household Economics and Decisionmaking. Their website[1] has the full 2018 report[2] as well as CSV of the data going back to 2013 when it started.

The headline comes from the Retirement section of the PDF, which begins on page 55 of the PDF.

As mentioned by others, this "None" category isn't nearly so interesting as some of the other data in the report. Notably:

> When asked about their finances, 75 percent of adults say they are either doing okay or living comfortably. This result in 2018 is similar to 2017 and is 12 percentage points higher than 2013.

[1] https://www.federalreserve.gov/consumerscommunities/shed.htm [2] https://www.federalreserve.gov/consumerscommunities/files/20...

75 percent of adults say they are either doing okay or living comfortably

That percentage would go up if people's expectations of what "doing okay" means goes down. If society is telling millennials that they're doing well if they can afford a room in a shared house and a new iPhone then they will report that they're "doing okay", especially if they have peers who can't afford those things. That doesn't make it true compared to a generation before them who could afford to buy a house and a new car at the same age and strata of society.

It's a measure of perception rather than anything objectively useful.

As an early 'Millennial' I'm quite surprised by how much those about a decade or younger than myself are okay with things being much worse for them than they were for me.

It was easier for me to find housing, study without massive student loans, and receive health care without high costs and/or navigating complicated options.

While I can't tell for sure, it also seems like it was easier for me to get a job out of college that paid acceptably, and that offered decent prospects for the future.

Perhaps I shouldn't be surprised, because what I've heard from those a decade or so older than me is the same story. Among them, things like being a 'long-term student' or getting a job with a straight track to various promotions, seemed much more common, and rent was cheaper. And they've expressed being surprised that I seemed so okay with things getting a bit worse than it was for them.

And of the ones that do there is a lot of leakage with people taking loans or cashing out accounts when they change employers.

This is specifically what I am working on but taking the angle of helping people break the paycheck-to-paycheck cycle and make some progress towards their goals. If someone can save up enough to establish a small emergency fund then they are less likely to raid their retirement savings when their car breaks down or they get a medical bill they cannot afford. Further, when one feels like they have their financial life in order they are more willing to make 401(k) contributions beyond their matching amount.

It is difficult though. The default action for people and their personal finances is inaction. Working through some ideas to help that but there is no silver bullet.

In order to even consider the problem in terms of savings though, we first have to get to a place where 78% of American workers are not living paycheck to paycheck.


Yup, budgeting really is step one in building up enough of a cushion to break that cycle. And budgeting is a change of mindset that is hard for people to adopt. Going from looking at "how much is in my account" to "how much do I have left in my grocery budget" takes time but, when fully bought into, is a powerful way to take charge of your finances and drive the changes needed to build an emergency fund, get out of debt, save for retirement, etc.

Of course a budget doesn't always work. Sometimes one can only reduce their spending so much but still not reach a balanced budget let alone save a few dollars. In those cases the income side of the equation needs to be focused on. I suspect, but don't have data to back this up, that the job market isn't as strong as the official numbers would lead us to believe so there might not be a higher paying opportunity waiting down the street. Certainly wage growth is lagging. There is definitely a disconnect between the macro economy and Main St. in a lot of towns.

This is a huge problem that is only getting bigger as health care costs continue to rise, particularly for people stuck in the Medigap in retirement. But there are no easy answers or short cuts. I think we continue to do what we can to chip away at the problem and, like with budgeting, small improvements can have outsized results over the long term.

My personal anecdata is that I started saving more money and contributing more to my 401K after I got a substantial raise from switching jobs.

Before that? The majority of my income went to expenses and keeping my head above water. There are plenty of people who are irresponsible, yes. But I'm guessing there are many more who are just trying to pay the rent, bills, etc. to stay off the street.


I think it would be very hard to have substantial retirement savings on the bottom 25th quartile of American wages. Especially when most Americans are living paycheck to paycheck. Want people to save more? Pay them more.

This is the direct result of failure in the educational system.

With a little bit of financial knowledge (applied), nearly every American should have something to fall back on.

Financial education should be mandatory.

With the baby boomers planning for retirement, housing over-valued, and land likely in a similar over-valuation (anywhere that's actually useful)...

Where exactly should I be stashing my retirement to last past when the baby boomers?

I guess maybe that's why people buy so many guns and such, they have a valuation and will be worth something come revolution or as collectors items...

A percentage equal to your age in long term bonds and the rest in index funds, I strongly recommend Vanguard. It is my opinion that investing in rental property is the best thing you can do. If the the economy tanks, that just means people who had money have to sell their house and rent.

Rental property is fine but it's not hands-off. Probably more risky and error-fraught than is suitable for most people, unless they want a full-on side gig.

Rental property is a good income stream and investment, but it definitely isn't free money. Things will come up, and you have to be ready to either spend money or put some sweat in to fix problems. And you're on call and have to respond if things go sideways.

I mean, just the other day I got a call from one of my tenants, and had to leave dinner to go clean up a squirrel that crawled into the ceiling and died up there... I've been on vacation in Mexico in the middle of February and got the call that the oil burner had quit, and had to scramble from there to get it replaced before the house froze.

Your first and second sentence seem to contradict each other.

I think that's fair to say. If you wish to incur risk and put some of your savings to work, then I would recommend the rental property game. I think it is the most effective way for a white collar worker to amass wealth in a single working lifetime. You must also take advantage of compounding savings in the market.

The mix of these 2 is dependent on the risk the person/couple is willing to incur.

When I said 'planning' I'm trying to include current plans and revisions to them. My point being that there's a major population bubble to contend with and we haven't really addressed how to handle that (at least in America).

>(O)r as collectors items...

Any form of serious gun control is likely to include a grandfathering clause in order to keep it constitutional (beyond simply 2nd amendment issues). A few semi-auto firearms and other assorted "naughty" items like drum magazines are likely to be some of the best investments out there if things continue down the current path. AR-15s were selling for $3k during the AWB years and although the supply is several orders of magnitude greater today, a high quality AR will still appreciate massively in value under a new AWB. There is a large quality gap between the most common ARs (PSA build kits, M&P Sports, etc) and a high end one. In a regulated market with limited supply and bureaucratic hurdles to obtaining licensure, demand shifts to value the highest possible quality.

Just look at the firearm suppressor market for example. While they are legal, the effect of a $200 tax stamp and a 6 month waiting period for approval (caused by inefficiency rather than statute) means the market is almost exclusively comprised of ~$700 options designed to last a lifetime as any replacement requires going through the whole process again. If suppressors were regulated like other common firearms-related items, there would be more sub-$30 oil filter adapters than you could shake a stick at. Since that isn't the case, incredibly durable and costly machined titanium and stainless steel rules the day.

I’m actually surprised the number is that low, tbh.

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