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Alright, alright. I’ll get into details if I must. First, the good news:
According to the 2016 Retirement Confidence Survey published by the Employee Benefit Research Institute, people are starting to move out of their recession fears. The percentage of workers “very confident” in having enough to retire, went up from 13% in 2013 to 22% in 2015. This year it went down slightly to 21%, but overall, people are feeling a bit more confident in these insane market days.
The question is: Should they feel this confident?
26% of the surveyed workers that provided actual investment numbers reported they had less than $1000! Now, I’m assuming/hoping those 26% had NO OVERLAP with the 21% feeling “Very confident,” but I don’t actually know.
Let’s look at a different source. The Economic Policy Institute has put together a chartbook on the State of American Retirement. In their findings, 47% families between the ages of 32-61 are contributing to NO PLAN AT ALL!
Now if you’re like me, you like to compare your numbers. Here is a chart of the averages of each of the different age groups. As you’ll see, the savings amounts do increase as people age, but not nearly as much as they should be! 56-61 year olds with less than $200,000! I can happily say we are currently higher than the average 44-49-year-olds, but I hope to surpass even the averages of the 56-61 year olds soon!
This calculates to a total overall average of $95,766. But the story gets WORSE. This is the AVERAGE! What happens when you average two people with $1,000 of total savings and one guy with $1,000,000? You get an average of about $334,000. See how that one guy skews everything? Another indicator is called median which orders everyone from lowest to highest and looks at what the guy in the middle is saving. They found that (because 47% have no savings at all) the median was just $5,000! What about the 90th percentile family? They were only up to $274,000! What about the median of families WITH retirement plans? $60,000! All of this shows there is HUGE INEQUALITY. It turns out white, married, educated people are WAY more likely to have retirement plans and ones with higher balances. ugh. And the gap between the upper crust and the lower crust has INCREASED since the recession.
The 1% had $1,080,000 or more. This does not bode well for the general public. But guess what? It does bode well for YOU! You know how easy it is to make $1,000,000 over a long period of time! And you know it’s possible to do it in less! That means YOU, regardless of race, gender, marital status, or education level can become a 1 percenter!
Also, stop reading your retirement newsletter. THE PEOPLE NEED TO KNOW THEY CAN DO BETTER!