Sad statistics about the state of American savings
“Facts are stubborn things, but statistics are more pliable.” — Mark Twain
Much of our news coverage is based upon statistics, numbers resulting from some kind of survey or study. Some statistics that made the headlines recently should make everyone take notice.
More than one-third of Americans (36 percent) have no retirement savings. Even worse, one in five people near retirement age (ages 50 to 64) hasn’t saved a cent.
That’s according to a Bankrate poll, which showed that not only does the U.S. have a large percentage with no savings, but that those who are saving aren’t socking away all that much.
About 36 percent of workers have less than $1,000 in savings and investments that could be used for retirement, not counting their primary residence or defined benefits plans such as traditional pensions, and 60 percent of workers have less than $25,000, according to a survey from the Employee Benefit Research Institute.
So why aren’t people following the advice to save something for a rainy day? It’s not that they don’t want to – it’s because they can’t afford to.
Things are getting more expensive in the near term. In another study released this week, the U.S. Department of Agriculture (USDA) found that the cost of raising a child born in 2013 to the age of 18 has reached $245,000. For a high-income family in the urban Northeast, the USDA found, that number could reach $455,000. Those figures don’t include college tuition, an expense that continues to skyrocket.
For many people, particularly those working part time or earning low wages, the biggest obstacle to a steady retirement savings plan is access. About three-fourths of private-sector workers with full-time jobs have access to a retirement plan, but that number drops to 37 percent for part-time workers, according to the Bureau of Labor Statistics.
So, what did workers say about covering expenses in retirement? The biggest resource people plan to rely on, whether or not they had savings, is Social Security, which was cited by roughly 45 percent of respondents.
A large percentage of respondents told Bankrate that their solution to their retirement savings dilemma is to not retire at all and to keep working indefinitely.
Meanwhile, the Federal Reserve released the results of its first-ever survey on how U.S. households are faring financially, and it wasn’t a pretty picture. A quarter of households say they’re “just getting by” financially, 13 percent said they were struggling to get by and 34 percent reported they were somewhat worse off or much worse off than before the Great Recession hit in 2008.
Other findings: a third of those who had applied for credit in the previous 12 months said they were turned down or given less than they requested, and 24 percent had some type of education debt.
And even more bad personal financial news: 35 percent of Americans have debt in collections, according to a study from the Urban Institute, which analyzed the credit files of 7 million Americans.
But there is a bit of good news on the horizon: The Bankrate survey showed that some people are starting to tuck away retirement savings at an earlier age. About 32 percent of people ages 30 to 49 started saving for retirement in their 20s compared with 16 percent who began in their 30s.