It's been one of those weeks where news about retirement was more entertaining than depressing.
For instance, a TD Ameritrade survey reveals that only 8 percent of "Generation Z" folks are saving for retirement. Generation Z consists of adolescents and very young adults -- those who range in age from 13 to 22.
Shouldn't the takeaway be that our retirement fears have filtered down to our children and grandchildren, and some of them are already beginning to save for their golden years? These young savers will be in great shape if they continue on that path.
Then there was this rather amusing headline: Executives need help filling retirement income gap. The story on PlanSponsor.com reveals that the $17,000 contribution limit on 401(k) plans doesn't cut it for highly compensated people. Executives who make $300,000 a year and save in a 401(k) plan for 20 years will only get the equivalent of 30 percent of their final pay from Social Security and 401(k) savings if they max it out every year, according to the Todd Organization.
Gosh oh golly gee. Such an exec would have to make do with an annual income of $90,000. It looks like he or she might have to cut back on round-the-world cruises. Maybe these high-income earners should take a lesson from Generation Z and begin saving at age 13 instead of waiting until 40 before they start their retirement planning.
Oh, and here's a good one: The State Budget Solutions Project released its third annual State Debt Report, which concludes that aggregate debt in the 50 states adds up to a staggering $4.19 trillion. Market-valued unfunded public pension liabilities, at $2.8 trillion, make up roughly two-thirds of the total.
Guess who carries the biggest unfunded pension liabilities? If you guessed California, you are right. Its pensions are underfunded by $398 billion and change. And just this week, Gov. Jerry Brown announced a pension reform plan that, if enacted by the California legislature by midnight Saturday, would save somewhere between $40 billion and $60 billion over 30 years, according to an article on MercuryNews.com. Wow -- that maverick California governor really does know how to solve the problem!
And then finally, this piece of news, which is rather depressing: A study released by the Employee Benefit Research Institute this week finds that for about one-third of American households in the workforce, toiling away until age 70 will not be enough to ensure retirement income security.
The happy news is that nearly two-thirds (64 percent) of households approaching retirement age (50 to 59 in 2007) would be ready to retire at age 70. Just more than half of boomers in that age category could retire at 65.
I wish I'd thought of saving for retirement when I was 13! Instead, I saved up for a Yamaha guitar. I guess I could play it and sing the blues.
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