Some people don’t want to stop working. They retire, piddle around a few months, get bored, then get a job to keep them occupied. But other people – most people we’d argue – don’t want to work after 65, into their 70s and even 80s.
But the way Americans are saving for retirement, which is dismally poor by recent studies, people who don’t want to work may have to. With the holiday shopping season in high gear, money is on the brain. It’s a good time to remember that buying gifts and splurging at times can be fun - but without saving and planning now, the forecast for your golden years could be grim.
ClarkHoward.com reports that 94 percent of seniors polled said the advice they would like to give to younger people is to start saving earlier, save more during their career, find small ways to save that add up, and maximize work retirement programs – advice we should all take before it’s too late. Proponents for the local Seniors for Change movement, the group that wants to increase senior tax exemptions in Pickens County, argue that seniors on fixed incomes can’t afford to pay their property taxes, which is true in many cases (although not only seniors on fixed incomes would benefit from the additional exemptions).
Here are a few stats:
•One out of every three Americans has zero dollars saved for retirement, ZERO, which means they would rely totally on Social Security payouts. A GoBankingRates Retirement Rates survey found that of those who do save, 55 percent have less than $10,000.
•The average monthly retirement benefit is $1,371, or $16,452 per year. The overall maximum monthly Social Security benefit (which Money.com reports only six percent of people qualify) of those retiring at 65 in 2017 is $2,687, or $32,000 for the year.
•People are living longer. According to the Social Security Administration, "About one out of every four 65-year-olds today will live past age 90, and one out of 10 will live past age 95. That means if you retire at 65, you might need money to live on for 25 years or more.
What are we wasting our money on?
Somewhere along the line, the American attitude about what’s required to live a decent life shifted. Older generations made things last and worked decades to build up to a new house or car. These days people want the big, fully-furnished house and expensive car right after they get married (with the average wedding now costing over $25,000), among other luxuries.
Here are just a few of the items we waste money on, in addition to things like lottery tickets, entertainment, clothes and other retail shopping, alcohol, and cigarettes:
•Eating out and food waste: For giggles (or sobs) check out your bank statement one month and add up how much you spend on restaurants. Let’s say you spend $10 a day on lunch/dinner and $3 a day on a coffee/snack at the gas station. Over the course of a year that’s $4,745 for one person (The max contribution to a 401k is $5,500 if you’re under 50). This amount doesn’t even include what’s wasted throwing out food that could be eaten the next day as leftovers – which in America is estimated to be almost half.
•Vehicles: The average cost of a new vehicles are on the rise, with the average now at $34,000 according to Kelly Blue Book. A NY Times report found that new cars are typically too expensive for the typical family, but they still buy them. The average term for a new-car loan is now 68 months, with some loans stretching as long as seven years.
We’re not advocating for super couponing or never splurging on entertainment or vacations – but with all our spending and dismal savings it’s in our best interest to put away now so we won’t be crying later.