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Ridiculous retirement news

By Barbara Whelehan ·
Friday, August 31, 2012
Posted: 12 pm ET

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 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 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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September 04, 2012 at 2:28 pm

Wow, Carrie, how dare you ridicule lazy layabouts! Seriously.....take a deep breath. What you read as ridicule is read by many of us as "food for thought".
I've been working since I was age twelve and, forty-seven years later, I am still working. That includes serving twenty years in the U.S. military. So, I never expect to be "money-rich" and that is o-k with me. Unless you have traveled to the same places that I have and seen first-hand, you probably have no idea what downright poor looks like.

Steve J
September 02, 2012 at 12:55 pm


If you need 90K to live in retirement, you need to move or evaluate
what you are spending your money on.
I live on a slightly higher income in one of the most expensive
cities in the country and want for nothing.
$90K ins plenty.

August 31, 2012 at 3:44 pm

The 17K maximum only applies to the pre-tax limit. The post-tax limits go up to $49K. Besides that the 401K and SS won't cut it anyway... obviously need to have other avenues such as IRAs and Roth IRAs, as well as taxable accounts.

Its really not that hard.. I'm turning 31 this year and by year end expect to exceed $350k across my designated retirement accounts. When I started saving at 24 I had $8K in the bank I used it to buy a house which I have taken a significant unrealized loss on to date... and don't expect it to ever make me any money.. all the more reason to keep saving up...

Did I mention I'm just your typical engineer nothing special about my background just some one determined to make a living and have fun doing it.

August 31, 2012 at 1:56 pm

How dare you ridicule those you consider rich! Do you have any idea how hard those folks making $300k a year actually work? How many years they were out of the real work force for schooling, leaving them unable to put away money for retirement during those years? How many family members that salary supports? How much of the taxes they paid go to support lazy layabouts that choose not to work and let government take care of them?

An annual income of $90k for a couple in retirement is definitely not "rich" in many parts of the US. In some parts, including those considered desirable during retirement, that would be downright poor.