The statistic that made me rethink retirement savings completely

I was reading a report from the Employee Benefit Research Institute last week and found out that nearly 40% of households aged 55-64 have less than $25,000 saved for retirement. That number shocked me because I always assumed most people in that age range had at least a decent nest egg built up. On one hand, maybe those people have pensions or other assets that aren't counted in that survey, like home equity or rental properties. On the other hand, it seems like a huge warning sign that our retirement system is failing a lot of folks. What do you all think, is this stat misleading or is it really that bad for so many people?

3 comments

3 Comments

wren6386d ago

yeah that stat is rough but honestly not that surprising when you think about how many people just never got the memo on how much you actually need. my buddy's parents are in that age bracket and they've got basically nothing saved because they assumed social security would cover them like it did their parents. the thing that actually woke me up was opening a Roth IRA for my nephew when he was 16 and showing him what compound interest looks like over 40 years lol. if you're reading this and you're under 40, just start throwing even $50 a month into something like a target date fund and don't touch it. that 25k number is scary but the real lesson is that a lot of people are banking on the house being their retirement plan and that can backfire hard if the market dips when you need to sell.

tessa_murray5d ago

@the_taylor's got a point though. This only matters if you plan to stop working.

the_taylor6d agoMost Upvoted

Hold on, are we sure this stat is painting the full picture? I get why it sounds scary, but I've met a ton of folks in that age group who have most of their money tied up in a house they own outright or in a small business they're planning to sell. The number of people who actually retire with nothing but Social Security might be lower than that 40% makes it look. Plus, a lot of people had pensions back in the day that get cashed out as a lump sum, and that money might not show up in a retirement account survey if they already spent it paying off debt or fixing up their house. I'm not saying everything's fine, but those numbers need some context before we all start panicking.