Half of All Workers Have Savings less than $25K? Really? April 11, 2007Posted by pf in Expenses and Savings, Uncategorized.
Tags: debt, Have less than 25K in savings?, net worth, Retirement, savings
Today, CNN Money posted an article by Jeanne Sahadi entitled “Have less than $25K in savings? Get in line”. The idea that most of us do not have enough saved for retirement is not all that shocking. However, seeing the actual numbers and how little we have actually saved is a bit startling. Granted, when you look at the distribution of the workforce, the data is skewed a bit toward those who are younger in their careers, etc (makes sense). However, even accounting for those differences, the picture does not get that much better for the crowd further along the retirement path.
The article cites statistics from a recent survey – 2007 Retirement Confidence Survey by the Employee Benefit Research Institute and Matthew Greenwald & Associates:
- 40% of respondents are not currently saving for retirement at all
- 34% don’t have any retirement monies saved at all
- 25% have no savings – period!
Making my jaw drop just a bit further are some of the statistics that show as many as 30% of the respondents indicated they would require retirement funds less than 5x their current income. Of course, if those respondents include people who have a healthy pension plan, etc…I guess it could be possible. However, my intuition suggests otherwise.
One of the things I find most frustrating is I wonder if these people are even aware of the risks they are taking by not saving or whether or not they really have any idea whatsoever about how much they really need to fund their retirement? Everything I’ve read and my intuition suggests not. After all, would someone really “plan” not have enough? I suspect these people do not have any plan at all. Adding to my discouragement is that despite all the information available, including personal finance blogs such as this one will likely never reach many of them.
Don’t get me wrong, I recognize that many people are working hard and doing their best to “make ends meet”, much less think about saving for retirement. However, the day will inevitably arrive where work is no longer an option and they will have to find some means to support themselves. Ultimately, my fear is that if we don’t do more to “force” savings (ex: automatic 401(k) enrollments, etc) and create better education on personal finance in our schools (when at least we have some of their attention), then you and I, the taxpayer will have to foot the bill.