The typical American worker has $955 saved for retirement. But why?

Photo above - record international audiences are expected to tune in for today's Superbowl.

God bless the US Census Bureau, and a think tank called The National Institute on Retirement, and CBS news. Through their combined efforts we have learned that the average American has only $955 saved for retirement. (see link at bottom)

Before I reflexively blame the usual suspects (drugs, mobile gambling, and DoorDash), lets do a deeper dive. How about the people who DO have 401K and/or IRA accounts? There is good news –turns that a whopping 68% of American adults have a tax deferred retirement account. Far more than I’d have guessed. The bad news? The median balance is $40K. So that means that almost everyone has next to zero in their account.

How far does $40K go in retirement? Nobody actually knows. But the government says we need $1.1 million in that 401K to stay out of poverty. And we should probably withdraw only 4% a year. So that’s about $40,000 in annual withdrawals. Congrats – at the end of year 1 your balance would be zero. (Disclaimer - future inflation is not accounted for in these numbers.)

I totally get what The National Institute for Retirement is trying to tell us. Open a 401K, and max out your contributions. But what the link doesn’t talk about is why that’s impossible. Even without fentanyl, Doordash, and FanDuel, over half of Americans live paycheck to paycheck. Taxes on those paychecks build space telescopes and armies, while our schools crumble. We have 800 military bases around the world but can’t protect anyone from terrorism or invasion. Ukraine is down to 4 hours of electricity per day, in the middle of the coldest winter in decades. NATO, what the hell???

The US national debt is over $38 trillion. $400,000 for every family. 10 times larger than the average 401K. Maybe the problem ISNT that we’re not saving enough. Maybe it’s all the money spent by congress on things nobody wants or needs?

Superbowl fan alert: Good seats are still available. Unsold tickets are dropping to bargain prices. Some are nearly below $3,000. if you find that you still cannot afford to attend in person, please don’t bet all your spare change at sites like FanDuel.

I’m just sayin’ . . .

The typical American worker has $955 saved for retirement

https://www.msn.com/en-us/money/retirement/the-typical-american-worker-has-955-saved-for-retirement/ar-AA1VLUac?ocid=BingNewsSerp

dancingtongue · 80-89, M

Best advice I ever got -- from an uncle who was like a second father to me -- was to set aside 10% of what I earned for retirement starting immediately, no matter how hard I thought it was. "It sounds big," he said, "but that is only a dime out of each dollar. Pocket change, most likely squandered on some impulse purchase you don't really need."

The first few years were difficult, Seldom had the latest materialistic crap that was trendy. But my employer was matching it for the IRA, and when I could I increased it to the max of 25%. Been retired 30 years and still living comfortably on it.

SusanInFlorida · 31-35, F

@dancingtongue good advice. 10% is in the same zone as a 6% 401K contribution, and a matching 50% (additional 3%) match from the corporation.

Crazywaterspring · 61-69, M

Most people aren't actually paid that much. And many have a vague idea of personal finance. Many who had retirement accounts had to liquidate them to cover periods of unemployment.

Some think lottery winnings are an excuse for planning for retirement.