The Shockingly Low Amount of Retirement Savings per American
October 18-24 (this week) was recently designated as ‘National Save for Retirement’ week by Congress. Historically, the federal government has always promoted increased spending by consumers to drive us out of recessions. That’s why it’s incredibly interesting that during the largest recession since the Great Depression, Congress would approve of a ‘National Save for Retirement’ week.
Average Retirement Savings per American
It turns out that they have good reason. According to the Employee Benefits Research Institute’s 2009 Retirement Confidence Survey, 53% of workers in the U.S. have less than $25,000 in total savings and investments. The typical American household (headed by a 43 year old) has just over $18,000 in savings! That’s a scary number.
With pension plans being a thing of the past, saving for your own retirement is increasingly important. The government is starting to realize that if it doesn’t begin encouraging savings now, the expense of completely supporting tens of millions of retirees who have zero retirement savings will be catastrophic for the country. Now is the time for action.
These statistics get me absolutely fired up! My employer has a 401K match of 50% of my contributions up to the IRS maximum 401K contribution. That is an incredible benefit that I would never take for granted. However, a number of my colleagues don’t take advantage of this free cash while having no home, no kids, and no major expenses. If they aren’t taking advantage of this benefit, it’s easy to see why workers who aren’t getting a nice match are not saving at all. It kind of makes me sick on behalf of their future self looking back with regret.
I have the feeling that a good many of you are exceptions to these statistics. But why? How are most Americans not getting the message?
Retirement Savings Discussion:
- How much have you saved for retirement and what is your age?
- Why have you decided to save?
- If you could tell peers of yours why they should start saving, what would you say?