We have previously discussed the income disparity in the country and the alarming lack of savings for a great percentage of our fellow citizens. Now a study shows that roughly one third of the population have saved less than $1,000 for retirement. Equally surprising is the estimate of what will be needed to live comfortably in the future.
One study entitled “Preparing for Retirement in America,” by Employee Benefit Research Institute (EBRI) and Greenwald and Associates says that only 65 percent of workers have any savings for retirement. The number of people with such funds fell from 75 percent in 2009 to 65 percent today.
You then have the 28 percent with less than $1,000 in retirement. For a 20 year old, some are suggesting that $7 million will be need to retire comfortably in the future. I am not sure what the basis for that figure is. In 2014, someone retiring with $1 million can withdraw $43,600 a year.” That itself is quite a jump from the $166,000 needed in 1970.
Regardless of the figures, it does appear that too few people have access to 401K plans provided through their employer. When combined with the earlier study showing a shocking percentage of 33 percent of households in cities like Chicago living paycheck to paycheck, one can see how precarious the position is for many Americans in this economy.
Here is the study.