More than one-third of Americans say they've never had a retirement account

[Yo_Mama_Been_Loggin]

Never had a retirement account? You’re not alone – 36% of American workers said they’ve never had a retirement account, such as a 401(k) plan or an IRA, a new Bankrate survey found.

Generation Z and lower-income households were more likely to fall in this group. This includes about half of workers with annual income of less than $50,000, according to the survey. Bankrate’s survey included interviews of 2,225 American adults.

More than half of all workers said they felt they were behind on their retirement savings, and only 21% said they were on track. Another 16% said they weren’t sure where they stand, and 11% thought they were ahead. This is self-reported survey findings, which means people report what they believe to be true of their retirement security, but it is not necessarily accurate – sometimes, individuals may underestimate how much they’ve saved, or worse, they might overestimate and face a potential shortfall come retirement.

Older generations were more likely than their younger counterparts to feel behind.

https://www.msn.com/en-us/money/savingandinvesting/more-than-one-third-of-americans-say-theyve-never-had-a-retirement-account/ar-AATkGQx

[Farmer-Rick]

1. Well, that's what happens

When you pay so little that 4 jobs per family is the norm to just make ends meet.

[Bluethroughu]

2. +1

[uponit7771]

3. +1,

[paleotn]

12. Exactly.

[cadoman]

4. one of the best things the gov could do is treat retirement account as a special savings account

Untie it from employment. Make it so employers or contractors can fund it directly. Eliminate the fucking withdrawal penalties (that punish the most financially pressed). Allow citizens complete control of how they invest it (rather than the hokey 401k plans with limited options and high expense ratios).

It's an area of legislation that is in dire need of being updated, so how come it never gets fixed?

[VarryOn]

5. Those ideas all have merit, especially...

With the elimination of withdrawl penalties. How about treating folks as adults and trusting that if they are dipping into their retirement, they have a good reason?

I'd also significantly increase or remove the limit one is allowed to put into 401(k) or IRAs each year. If someone is willing to put more into their retirement accounts, let them.

[jimfields33]

6. I agree with allowing more but not taking it out until retirement

No way should it be allowed to be spent before retirement. Some are going to be so sorry doing so.

[PoindexterOglethorpe]

8. Withdrawing before retirement totally eliminates the whole

point of such an account.

Removing the limit that one can put into such an account only benefits the wealthy.

Several years ago, when starting a new job, and discussing the retirement account with someone in HR, I asked out of idle curiosity, what the maximum allowable contribution was. Turns out it was more than my regular paycheck.

[TimeToGo]

13. It's usually a percentage of your pay

[PoindexterOglethorpe]

16. Correct. That job was part time, and at a low level of pay.

Those who were full time and at a very high level of pay could clearly contribute a whole lot more. Please don't understand. I was not resentful of them, just astonished that someone could contribute even more than I could earn.

I'll add this. Because my needs were so very modest, I could live on that paycheck, as little as it was. Oh, and I was also contributing to the 401(c) at my job. Hooray!

[VarryOn]

19. The 2022 401(k) max contribution is $20,500...

And $27,000, if you're over 50.

I'm comfortable, but far from wealthy. Still, as I've gone further in my career, those limits have come into play in years with good bonuses. Ideally, I'd point every cent from bonuses into retirement.

Rather than remove the limit, at least raise it higher but not so high the wealthy couldn't abuse.

[cadoman]

20. agreed on the limits--they are completely arbitrary and punish hardcore savers

Speaking of which, why not let people retire early if they want to? Work hard in your peak years and take some extra time off later. Why shouldn't we be allowed to do that?

There have also been some years where I couldn't contribute much, while other years I could have gone more but there were limits and no catch up.

Believe me, if this were a problem affecting billionaires, all of Congress would mobilize overnight and fix it... Kind of like they did in 2008 for the banksters.

[Ms. Toad]

11. De-linking it from employment is critical.

When I was employed in my most lucrative job (6 figures) my employers didn't trust the banks/stock market. Because they didn't (and they also didn't trust the lower paid employees to responsibly manage retirement accounts), they didn't offer a 401K plan. That meant I was limited to the deposits to my IRA. Those were also the years when my daughter was in college, so any savings that was not a retirement account was presumed available to pay her tuition. (And the wonderful liberal college which recognized my marriage - even though it was not yet legally recognized - counted my spouse's assets as well - even though there were real world tax penalties we incurred because our marriage was not recognized.)

i.e. we got royally screwed

Relatively speaking. I know that even though I'm wired to save, my ability to retire comfortably at 65 has a lot to do with things beyond my control (parents who valued education, skin color, brain power, a stable marriage with a partner who is similarly wired). But - to a lesser extent, tying the ability to save for retirement to employment makes it more challenging even for those born with fewer resources than I was blessed to have.

NOW - that doesn't mean that employers should not be able to offer 401K plans (and match employee donations). Just that they should not be the ONLY option for building a retirement nest egg.

[Poiuyt]

7. I once heard that the average person retires with just $11,000 to their name

It was a while ago, and I may have that wrong.

[PoindexterOglethorpe]

9. That must have been a very long time ago.

A quick Google search gives a median retirement amount of $65,000, although perhaps only 50% of all Americans have any kind of savings account at all.

Another source says the average amount of retirement savings for 65- to 74-year-olds is just north of $426,000. Again, that's probably those who have any kind of savings.

I'm old enough at 73 to remember how incredible Social Security was at keeping old people from abject poverty. My paternal grandparents died before SS helped them. My maternal grandparents got a small stipend from SS. They also lived with my mother's sister, which made a huge difference. They had a roof over their heads, and the small amount they got was a contribution to the household.

We've grown used to the notion that people can live on their own after leaving a paid job. That's a relatively recent phenomenon. For most of human history people literally worked until they dropped, and if they lived a long time, did not live on their own, but with younger family members.

I will say I get very frustrated at those who say it is IMPOSSIBLE to save money. I want to tell them that there are those out there living on at least a couple of thousand dollars a year than you are, so don't say that. Cut back on what you spend.

Much of my life I have been relatively poor. I've even gone searching for spare change so I could buy something to fix for dinner. The up side of that is that in times of prosperity I've appreciated the prosperity, but never lost the mindset of being poor. When my marriage came to an end, my income dropped precipitously, no surprise. Fortunately I had spend many years scrimping and saving, and I was able to go back to that.

Compared to some I am rich, compared to others I am poor. The important thing is that I can live comfortably on my income. Like many of us, I wish I had more money. But I can not only cover my life expenses, but I have money left over for various indulgences.

[Poiuyt]

10. Thanks Poindexter

Like I said, I wasn't sure. It may have been how much money people have when they die. This was maybe 20 years ago.

[bucolic_frolic]

14. In my view, policy should get back to basic needs for retirement

Fund the low end, invest it well, sequester it where it can't be touched. The current system is more tuned to building vast sums for well off people than support for low income people. The imprudent and the poor will always use it or lose it before retirement. Government policy should mitigate those propensities. Then they wouldn't need so much supplemental support of various kinds for low income people.

[PoindexterOglethorpe]

17. Fund the low end, invest it well, sequester it where it can't be touched.

That describes Social Security.

Those who are imprudent, well I don't know what to say.

[Hekate]

15. I am surprised it is that few. When big companies went bankrupt and stole the pension money...

… this is exactly what I figured would happen. People promoting the notion of 401K and IRA accounts as the great new business model just sounded like idiots to me — greedy idiots. It just infuriated me — and kind of broke my heart.

There is a great swathe of workers in this country who live from paycheck to paycheck, and I would like to know just how they are ever going to start or maintain a pension plan. There’s another great swathe who find themselves in need of a quick loan and, hey! presto! They can cash in their 401K.

Is this a great country or what?

[PoindexterOglethorpe]

18. I am one whose pension is less than a third of what it should be.

Fortunately for me, I never thought that pension would amount to much in my retirement, since it was a job I had in the decade of my 20s. I'm lucky. A good friend who worked for that same company for some 35 years, and who expected the pension would be a significant part of his retirement, has been totally screwed. Essentially he did everything right, worked for the same company most of his adult life, lived within his means, and after he retired found his pension cut by two-thirds. Needless to say, he's struggling financially.

The up side of a 401(k) is that the money can't be stolen from you, the way a pension can be.

[DBoon]

21. remove the cap on the social security tax

and raise the minimum benefit to match.

Individual retirement savings accounts are just icing on the cake. Nobody should have to rely on them for survival

[moondust]

22. Apparently the 1% needed the money.

Rand Corp: The Top 1% of Americans Have Taken $50 Trillion From the Bottom 90% between 1975 and 2018. The study may have been posted here in the past.

I heard about it from a Noam Chomsky interview on Al Jazeera a couple days ago: