America’s retirement crisis is the most gruesome wreck you’ll find on Main Street. New victims are discovered every day amid a financial bloodbath of too much debt, not enough savings, and stalled wages. We can’t look away — nor should we.
More than ever, you need to take an active role in preparing your future self for a time when you’ll want or need to retire. The company-pension airbag is officially deflated. In 1974, the original IRA was introduced after Congress passed the Employee Retirement Income Security Act. Four years later, the IRS added a little paragraph to the tax code that led to the first 401(k) being created in 1981. Today, IRA and 401(K) retirement accounts have replaced pensions, with one glaring downside: They are do-it-yourself retirement plans.
When faced with a choice on a seemingly complex subject such as saving for retirement, individuals often take the default or “no decision” choice. In the case of voluntary retirement plans, which require participants to take action in order to save money, the “no decision” choice is a decision not to save. This is slowly changing as more employers are automatically enrolling workers into 401(k) plans, but if you need a good scare to get you interested in your own retirement, we’ve assembled a list of the scariest retirement statistics.
Let’s take a look at 10 retirement statistics that will scare the crap out of you, and hopefully get you thinking about saving more for your future self.
1. Nothing saved for retirement
Your mama may have told you to be happy with what you’ve got, but that isn’t much if we’re talking about retirement savings. A recent survey from GoBankingRates.com finds more than half of Americans have less than $10,000 saved for retirement, with one in three having nothing saved. The National Institute on Retirement Security estimates the nation’s retirement savings gap is between $6.8 and $14 trillion.
Exactly how much you need to save for retirement is an ongoing debate, but one thing is clear: You’ll need more than nothing.