Wes Moss: The morbid state of retirement in America

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1 in 5 American’s would rather die than run out of money in retirement and other unsettling retirement findings for the middle class.

Wells Fargo released a survey at the end of October that studied “middle-class” American’s feelings on retirement, and the results were shocking.

The survey polled just over 1,000 people between the ages of 25 to 75 with household income ranges between $25,000 to $99,000 per year. This immediately grabbed my attention because the survey group overlaps with some of the research for my book, You Can Retire Sooner Than You Think .

From Wells Fargo’s research there were a few significant results that were particularly nerve-wracking. The first was that almost half (48%) of all the non-retirees in this study are “not confident” that they have saved enough to live the life they want in retirement. What’s more is that this lack of confidence jumped up to 71% for people between the ages of 50 and 59!

Half of the group in their 50s said that they will have to work until they are at least 80-years-old due to their lack of savings. That’s 18 years after you can start collecting social security!

According to the study, one in five people said that they would “rather die early” than not have enough money to live comfortably in retirement. For people in their 40s and 50s, one in three of these folks get depressed when just thinking about their financial life in retirement.

All of these reactions and statistics are unsettling. There are just too many people, half of the people in middle-class America, who are apparently planning to work until they die.

The surveyed group also reported that they believed that $250,000 saved for retirement would be enough to be “comfortable”, but the median amount that they are saving is $125 a month. If you do the math — $125 per month for 30 years is $45,000. If the funds are invested and earn 5 percent per year, that’s still only about $100,000. That’s $150,000 below this group’s goal! What’s worse is that in my research I found that happy retirees typically have at least $500,000 saved for retirement. That’s double what the survey respondents seem to think will give them a comfortable retirement, so $100,000 clearly doesn’t cut it.
If you’re asking yourself, “Could this be me?” then it’s time to take a hard look at your own retirement planning.

Quick Breakdown Of What To Avoid

• The group’s median amount saved for retirement was $20,000. That is down from $25,000 the prior year’s survey from 2013. It’s also way below their goal of $250,000, and extraordinarily lower than the minimum benchmark of $500,000 I suggest aiming for.

• Ages 50 – 59 are the peak years for saving for retirement, but 41% of the people in this age range in the study said they were saving absolutely nothing. Zero. Don’t fall into this group.

• In this survey 61% of the entire group admitted that they were not sacrificing “a lot” to save. You can sacrifice spending or pick up extra work, but you need to be doing something to set yourself up for a comfortable retirement.

• An overwhelming majority, 72%, of the group surveyed said that they should have started saving earlier. Hindsight is 20/20, so learn from those who already have it, and start saving today. There’s no time like the present.

Bottom Line
I’m not saying that saving for retirement is necessarily easy, but it is possible. In my book, You Can Retire Sooner Than You Think , I give you all the financial bare minimums that you should shoot for to be a happy retiree. These are the numbers you should be planning and saving towards. Don’t just plan to work until you die. Instead, plan and save now, so you can actually stop working before you’re 80 and enjoy life.

You can find Wells Fargo’s original article on their research here.

Certified financial planner Wes Moss offers financial and accessible investment advice to Atlanta Bargain Hunter readers.

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