People who don't save for retirement

[Anonymous]

Everytime I look up what I should have saved up, I get stats on what the average American actually has. And they don’t have much. So what do all these people actually do when they reach their 60s and 70s?

[Anonymous]

Social security and medicare

[Anonymous]

Anonymous wrote:Social security and medicare

And live with adult children at a certain point. Pretty much back to the way humans have lived for all of history.

[Anonymous]

Those stats might not be accurate. Average 401k balance doesn’t mean total net worth.

I have a Roth IRA with only $7000 in it and another IRA with 60k. One of my 401k’s has 120k. Total net worth is in the millions.

[Anonymous]

Anonymous wrote:Those stats might not be accurate. Average 401k balance doesn’t mean total net worth.

I have a Roth IRA with only $7000 in it and another IRA with 60k. One of my 401k’s has 120k. Total net worth is in the millions.

The you did save. Not relevant. Social security.

[Anonymous]

Anonymous wrote:Those stats might not be accurate. Average 401k balance doesn’t mean total net worth.

I have a Roth IRA with only $7000 in it and another IRA with 60k. One of my 401k’s has 120k. Total net worth is in the millions.

Same here, but I do think that for the "average" American, the first saving vehicle is a 401K or IRA or similar, and so the stats portray a certain level of poverty and lack of preparedness. They don't all have millions in a brokerage account, and don't own several properties.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Those stats might not be accurate. Average 401k balance doesn’t mean total net worth.

I have a Roth IRA with only $7000 in it and another IRA with 60k. One of my 401k’s has 120k. Total net worth is in the millions.

The you did save. Not relevant. Social security.

People these days job hop all the time so there aren’t very many people with huge 7 figure retirement accounts unless you consolidate them or stayed in the same job for 20 years

[Anonymous]

Certainly there are millions of poor old people, but the average retired American is doing OK.

The people who are struggling in retirement are typically (but not always) those who struggled financially earlier in life. Poverty rates for older people are lower than for those in late middle age.

"Survey data from Vanguard show that less than 5 percent of retirees consider their own financial situation to be a 'retirement crisis.' Gallup finds that 4 in 5 seniors say they have enough money, not just to survive, but to 'live comfortably.'"

In 1979, the average household aged over 65 had an income of $45,100 (measured in today's dollars), but by 2021, the average retiree household's income had more than doubled to $116,700.

https://www.dailymail.co.uk/yourmoney/article-15350935/retirement-crisis-andrew-biggs-analysis.html

[Anonymous]

Anonymous wrote:Those stats might not be accurate. Average 401k balance doesn’t mean total net worth.

I have a Roth IRA with only $7000 in it and another IRA with 60k. One of my 401k’s has 120k. Total net worth is in the millions.

But why didn't you take advantage of tax free growth for years?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Those stats might not be accurate. Average 401k balance doesn’t mean total net worth.

I have a Roth IRA with only $7000 in it and another IRA with 60k. One of my 401k’s has 120k. Total net worth is in the millions.

But why didn't you take advantage of tax free growth for years?

I only directly contributed $2k to my Roth when I was in my mid 20’s and low earning. As soon as I became high earning I’m no longer eligible. I currently do a mega backdoor Roth 401k and contribute 20k a year into that. I could do a normal backdoor conversion to my IRA but I’m too lazy.

[Anonymous]

I will be working until I die. I can't afford to retire. That's for rich people.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Social security and medicare

And live with adult children at a certain point. Pretty much back to the way humans have lived for all of history.

+1 DH's parents were working class with minimal savings. Worked until they physically couldn't, lived in a small paid-off house, in a low-cost city. One young-adult grandchild moved in with FIL after MIL died. Near end of life, it was looking like FIL would need nursing home care and DH and I would have paid for any costs not covered, but he ended up passing away while in rehab after a surgery.

[Anonymous]

These people are typically working later into life until they physically can’t. The rest of their life is depending on family and government programs.

[Anonymous]

DH is from a small town in PA. All of his relatives live off of Medicare and SS. Their houses are paid off by the time they retire, but they were like 50k. None of them have any issue living within what they get from SS. It's not a great life, but they still can afford to eat out and a trip every once in a while. In small towns I think SS goes pretty far.

DH's grandma needed a nursing home for her last 3 months and medicaid paid for it. It wasn't "nice" and did have 3 to a room, but she wasn't left out in the cold. Frankly I think that's how medicaid should be. No frills, but you still get care.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Those stats might not be accurate. Average 401k balance doesn’t mean total net worth.

I have a Roth IRA with only $7000 in it and another IRA with 60k. One of my 401k’s has 120k. Total net worth is in the millions.

The you did save. Not relevant. Social security.

People these days job hop all the time so there aren’t very many people with huge 7 figure retirement accounts unless you consolidate them or stayed in the same job for 20 years

I have wondered how they're calculating this. Is it by person or by retirement account? DH and I both have some from prior jobs that have less than 20k.