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