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Sorry!! 50% (Or More) Of Retirees Will Outlive Their Retirement Savings

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Feeling safe and secure about your retirement funds? Are you in the 50% or so that will outlive your savings? Love that I am going here right now?

Dig this… yes its true, more than 50% of retirees (and even you great Gen X members) will die kinda poor if you think living on your Social Security checks of say $17,000 per year ain’t that appealing. I won’t go into major detail right now. But, I will, soon, I promise.

What has caused this? Here is a list of factors, but not all of them:

  • You simply didn’t save enough (that’s why Gen X and gen Y better start now)
  • Only 53% of workers have a pension or 401K
  • Workers age 55 to 64 had just $54,000 in their 401K in 2010
  • On average, this group has $120,000 in savings (that’s about 1/4 required according to the experts)

Bottom line? Our savings culture and systems suck. Yes, there are solutions being considered by pro-active politicians like Senator Tom Harkin (but not in time for those lucky Baby Boomers.)

Stay tuned.

 

Credit Card Debt: Who Owes The Most? Baby Boomers Or Gen X / Gen Y?

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It might make sense to think that the younger generation uses their credit cards more than most and are sitting on some serious credit card debt but, they are not the leaders. Baby Boomers, according to the report The Plastic Safety Net from the public policy outfit Demos, are winning here.

The group with the highest credit card debt is the 65+ crowd who owe on average $9,283.

Those Gen X and Gen Y  folks? They owe $2,982 for 18-24 yer olds and $5,156 for 24-34 year olds.

A key implication? Many Baby Boomers are heading into their retirement years broke and out of work. Is this alarmist? Yes. Is it true? Yes. Want more? The average total retirement savings for Baby Boomers is $78,000  — try stretching that over 10, 20 or 30 years.

Postponing Retirement … For The Long Haul

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A new study from  the Society of Actuaries says that a third of adults do not expect to retire. Not so surprising. But, what is is that this number is up 29% from two yeas ago and, yes,  this increase is significant.

Many people, more than 4 in 10 say that they cannot retire because they need the bucks and, in many cases, the employer benefits.

Uncertainty – about life-expectancy and the money required to cover long-term living expenses –  also plays a major role in per-retirement planning.

“Current trends in retirement indicate that people may need to work longer than they originally planned,” said actuary and retirement expert Carol Bogosian, ASA. “Individuals often have a difficult time estimating how long they can expect to live, how much they will earn on their investments and how much they can spend each year to avoid running out of money. In fact, many people are just guessing about how much money they will need in retirement.”

There is, of course, another reason. We might not want to stop working.

College Debt Could Lower Your Social Security Checks

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Get this… if you have defaulted on a college loan the Social Security administration has been docking Social Security checks. Smartmoney.com reports that Baby Boomers that default on  student-debt can have their Social Security benefits reduced.

“According to government data, compiled by the Treasury Department at the request of SmartMoney.com, the federal government is withholding money from a rapidly growing number of Social Security recipients who have fallen behind on federal student loans. From January through August 6, the government reduced the size of roughly 115,000 retirees’ Social Security checks on those grounds. That’s nearly double the pace of the department’s enforcement in 2011; it’s up from around 60,000 cases in all of 2007 and just 6 cases in 2000.”