GAO: Half Of Older Americans Have No Retirement Savings Plan

There is a badly disturbing report out of the U.S. Government Accountability Office that estimates that almost half of older Americans approaching retirement have nothing saved for retirement in a 401(k) account or its equivalent.

The study looked at people who 55 and older in the United States. It found that 48 percent had nothing put away in a defined contribution or retirement plan.

As bad as that may be, it was an improvement from 2013 when 52 percent was without retirement money.

However, some 29 percent of older Americans have neither a pension nor savings.

This report offers a chilling profile of the economic strata in our country, particularly when combined with other studies showing that people have little money saved and live pay check to pay check. Another recent study shows that most Americans cannot afford home sin 70 percent of the country.

The GAO estimates looked at those aged 65 -74 with a savings of $148,000. That amount would yield only an inflation-protected annuity of $649 a month.

88 thoughts on “GAO: Half Of Older Americans Have No Retirement Savings Plan”

  1. According to Forbes, this headline is misleading and the study is being misinterpreted.

    “But, as FactCheck.org and others have noted, this statistic – derived from the Federal Reserve’s Survey of Consumer Finances – excludes anyone who has only a traditional defined benefit pension. If we count both retirement accounts and traditional pensions, 72% of households aged 55 and over have retirement savings. That’s up from only 64% in 1989 – so things are getting better, not worse. But you wouldn’t know that from the press coverage.

    Excluding traditional pensions from “retirement savings” defies common sense, and it isn’t even justifiable on a technical level. In the National Income and Product Accounts and the Federal Reserve’s Financial Accounts of the United States, household wealth includes both defined contribution retirement plan assets such as IRAs and 401(k)s and the future benefits owed to employees via traditional defined benefit pensions. I can’t see why the GAO’s headline number would categorize this group – most of whom are public sector employees with generous pensions – as “non-savers,” especially when that limited definition of retirement savers has already caused confusion.”

    https://www.forbes.com/sites/andrewbiggs/2019/03/27/no-half-of-older-americans-arent-without-retirement-savings/#4a928251e664

  2. I feel safe and secure that the politicians in Washington are looking out for welfare. It sends a trickle down my leg. Or was that something else.

  3. If these nitwits try to give us Medicare for all and the system crashes because we won’t have enough money to pay for all this. Then no one will have it including those who have been paying into the system since Johnson was president. Won’t that be dandy.

    1. I. Bob,
      Bernie says MediCare for all will save the average family c.$5,000 a year😉.
      And that’s IN ADDITION TO the $2500 the average family already saved under ObamaCare!🤥

        1. PS The rest of the developed world spends on average 60% of what we do per capita on health care and also provide universal coverage. The do this in a variety of ways, from socialism in the UK to combinations of private and government insurance in places like Germany and France. The characteristic they all share is the government setting health care prices – for the faint of heart, call it “negotiating” prices between consumers and producers.

          Spending less on health care and providing universal coverage are not rocket science or even brain surgery. There are scores of models out there on how to do it, and we will eventually have to do it or go broke. Eliminating health care inflation – not demographic changes to our population – would result in zippo/zero/nada serious long term federal budget problems.

          1. This is an article from the Libertarian magazine Reason by it’s editor Matt Welch from January 2010:

            “To put it plainly, when free marketers warn that Democratic health care initiatives will make us more “like France,” a big part of me says, “I wish.” It’s not that I think it’s either feasible or advisable for the United States to adopt a single-payer, government-dominated system. But it’s instructive to confront the comparative advantages of one socialist system abroad to sharpen the arguments for more capitalism at home.

            For a dozen years now I’ve led a dual life, spending more than 90 percent of my time and money in the U.S. while receiving 90 percent of my health care in my wife’s native France. On a personal level the comparison is no contest: I’ll take the French experience any day. ObamaCare opponents often warn that a new system will lead to long waiting times, mountains of paperwork, and less choice among doctors. Yet on all three of those counts the French system is significantly better, not worse, than what the U.S. has now.

            Need a prescription for muscle relaxers, an anti-fungal cream, or a steroid inhaler for temporary lung trouble? In the U.S. you have to fight to get on the appointment schedule of a doctor within your health insurance network (I’ll conservatively put the average wait time at five days), then have him or her scrawl something unintelligible on a slip of paper, which you take to a drugstore to exchange for your medicine. You might pay the doc $40, but then his office sends you a separate bill for the visit, and for an examination, and those bills also go to your insurance company, which sends you an adjustment sheet weeks after the doctor’s office has sent its third payment notice. By the time it’s all sorted out, you’ve probably paid a few hundred dollars to three different entities, without having a clue about how or why any of the prices were set.

            In France, by contrast, you walk to the corner pharmacist, get either a prescription or over-the-counter medication right away, shell out a dozen or so euros, and you’re done. If you need a doctor, it’s not hard to get an appointment within a day or three, you make payments for everything (including X-rays) on the spot, and the amounts are routinely less than the co-payments for U.S. doctor visits. I’ve had back X-rays, detailed ear examinations, even minor oral surgery, and never have I paid more than maybe €300 for any one procedure.

            And it’s not like the medical professionals in France are chopped liver. In the U.S., my wife had some lumps in her breast dismissed as harmless by a hurried, indifferent doctor at Kaiser Permanente. Eight months later, during our annual Christmas visit in Lyon, one of the best breast surgeons in the country detected that the lumps were growing and removed them.

            We know that the horrific amount of third-party gobbledygook in America, the cost insensitivity, and the price randomness are all products of bad policies that market reforms could significantly improve. We know, too, that France’s low retail costs are subsidized by punitively high tax rates that will have to increase unless benefits are cut. If you are rich and sick (or a healthy doctor), you’re likely better off here. But as long as the U.S. remains this ungainly public-private hybrid, with ever-tighter mandates producing ever-fewer consumer choices, the average consumer’s health care experience will probably be more pleasing in France.

            What’s more, none of these anecdotes scratches the surface of France’s chief advantage, and the main reason socialized medicine remains a perennial temptation in this country: In France, you are covered, period. It doesn’t depend on your job, it doesn’t depend on a health maintenance organization, and it doesn’t depend on whether you filled out the paperwork right. Those who (like me) oppose ObamaCare, need to understand (also like me, unfortunately) what it’s like to be serially rejected by insurance companies even though you’re perfectly healthy. It’s an enraging, anxiety-inducing, indelible experience, one that both softens the intellectual ground for increased government intervention and produces active resentment toward anyone who argues that the U.S. has “the best health care in the world.”

            Since 1986 I’ve missed exactly three days of work due to illness. I don’t smoke, I don’t (usually) do drugs or drink to excess, and I eat a pretty healthy diet. I have some back pain now and then from a protruding disc, but nothing too serious. And from 1998 to 2001, when I was a freelancer in the world’s capital of freelancers (Los Angeles), I couldn’t get health insurance.

            Kaiser rejected me because I had visited the doctor too many times in the 12 months preceding my application (I filled in the “3-5 times” circle, to reflect the three routine and inexpensive check-ups I’d had in France). Blue Cross rejected me too. There weren’t many other options. Months later, an insurance broker told me I’d ruined my chances by failing to file a written appeal. “You’re basically done in California,” he said. “A rejection is like an arrest—if you don’t contest it, you’re guilty, and it’s on your permanent record.”….”

            http://reason.com/archives/2009/12/07/why-prefer-french-health-care

        2. Bernie’s “utility to the right” stems from ridiculous claims like the one I quoted.
          If you think that ($5,000 savings) claim is credible, you are part Prof. Jonathan Gruber’s targeted audience, and have to necessary quality that Gruber admitted to relying on in selling ObamaCare.

  4. actually, Karen, annuities can have thier place in some circumstances
    I won’t go into all of the bone-headed moves that people have made we with annuities….and if a purchaser of an annuity is abysmally ignorant of the conditions of that be annuity, it can turn out to be a really bad experience be for them.
    This goes back to my point about basic financial literacy and the lack of it; if someone has no understanding of the basic conditions of an annuity, I agree that that person should avoid them.

  5. Social Security was both a blessing and a curse. Although it helps, you cannot live on it. It was never designed to be the single source of income, rather, as something extra to make sure the elderly had enough to eat.

    It won’t pay for a mortgage, for example. If you keep taking advantage of cash out refinances, as they are advertised to remodel your home or get that new car, then your mortgage will keep going higher as your income gets lower.

    Once SS came out, people felt like they did not need to worry about retirement savings. They stopped putting money away for their golden years with the same urgency they had when there was no Social Security.

    I would like to see high schools teach a modern home ec class. Teach them how to make a budget, balance a checkbook, calculate how much you pay using a high interest credit card compared with cash, recognize “good debt” (groceries, gas, and car repair necessities) compared with “bad debt” (restaurants, movies, entertainment) a la Suzie Ormond, how to open a bank account, how to apply for a passport, how to compare different credit card offers, how to do a job interview, how to apply for college or trade school, and how to start saving at 18 for retirement. Compare the end result of saving $100 a month starting at 18, and 25 until retirement age. Basically, rules for life. Make it an elective, and totally non political. No objectionable topics but rather something that all parents would be glad to send their kids to attend.

    1. Although it helps, you cannot live on it.

      A large fraction of the elderly do live on it. The elderly couple I know best have (for various reasons) little in the way of private resources. They have Social Security and Medicare and are living passably on $3,500 a month.

    2. SS does upport by itself many who apparently don’t live your life style and has changed old age for many into a period of continued independence free of destitution. It has also kept their sons and daughters from carrying many, a situation both appreciate.

      “Elderly poverty in the U.S. decreased dramatically during the twentieth century. Between 1960 and 1995, the official poverty rate of those aged 65 and above fell from 35 percent to 10 percent, and research has documented similarly steep declines dating back to at least 1939. While poverty was once far more prevalent among the elderly than among other age groups, today’s elderly have a poverty rate similar to that of working-age adults and much lower than that of children.

      Social Security is often mentioned as a likely contributor to the decline in elderly poverty. Enacted in 1935, the Social Security system experienced rapid benefit growth in the post-WWII era. In fact, there is a striking association between the rise in Social Security expenditures per capita and the decline in elderly poverty, as Figure 1 illustrates (with both series scaled to fit on the same figure)….”

      https://www.nber.org/aginghealth/summer04/w10466.html

      1. Thanks, Anon. Before Social Security most elderly people had to live with younger family members. And if they had no family.. that was tough luck for them.

        Yet Republicans fought Social Security when FDR first proposed it. They claimed it was ‘socialistic’! Republicans then made those same claims 30 years later when LBJ introduced Medicare.

        Had we listened to Republicans elderly people would have been living in homeless shelters these past 80 years. But free enterprise would be stronger than it is!

    3. One thing that some of the Muslim countries have with their lending rules, is you will not get a mortgage term that exceeds your expected retirement date.

      This is a good thing, and often non repayment of a debt is considered criminal, you go to jail for that, and stay there until it is paid, plus you have served your jail term!

  6. The net worth of individuals is not the concern or purview of the government or the U.S. Congress, understanding that “…general Welfare…” consists merely of roads, water, electricity, sewer, post office, etc. – basic commodities, products or services that “ALL,” or general, use in similar amounts and frequency, while individual welfare is deliberately omitted and, thereby, excluded from constitutionality.

    Charity is industry conducted in the free markets of the private sector and absolutely none of the government’s business. Americans are free to start a charity to improve the condition of individual citizens – GoFundMe.com is a great example. The American thesis is freedom and self-reliance. Individual Americans have maximal freedom with an infinitesimal government which exists solely to facilitate that freedom. The American Founders provided freedom to individual citizens. Karl Marx provided a dictatorship that would “take care” of citizens.

    Karl Marx wrote the Communist Manifesto 59 years after the adoption of the Constitution because none of the principles of the Communist Manifesto were in the Constitution. Had the principles of the Communist Manifesto been in the Constitution, Karl Marx would have had no reason to write the Communist Manifesto. The principles of the Communist Manifesto were not in the Constitution then and the principles of the Communist Manifesto are not in the Constitution now.

    Affirmative action, quotas, welfare, food stamps, rent control, social services, forced busing, utility subsidies, WIC, TANF, HAMP, HARP, Education, Labor, Obamacare, Obamaphones, Social Security, Social Security Disability, Medicare, Medicaid, “Fair Housing,” laws, “Non-Discrimination” laws, etc. are all unconstitutional.

  7. This is an exercise in social hypochondria cooked up by a cabal of politicians and wonks who want to introduce another spending program or regulatory regime. This sort of thing was a staple of newspaper articles in the Carter era. One way Ronald Reagan altered public discourse was to induce these people to turn their attention to writing working papers defending the already existing regulatory and transfer regimes rather than dreaming up new ones. (Back in the day, you had some episodic square shooters among liberal journalists who would chuckle at this sort of thing in print, Michael Kinsley foremost among them).

  8. This report offers a chilling profile

    Professor, are 1/2. of the old people you see around you vagrants? They’re not. For > 35 years, you haven’t even seen a disproportionate share of the elderly living below the statutory ‘poverty level’

    People used to save a higher proportion of their personal income (and, if we replaced income taxes with value-added taxes, they might yet again, though it is true savings rates tend to be insensitive to incentives). At the same time, risk-pooling and income-transfers provide better than they once did. Go back 35 years, and you’ll find that half the workforce wasn’t covered by private pension plans and many who were were due just a pittance.

    The people in question made their decisions in light of the various options they’ve had over the years. Those are seldom the best decisions they could have made, but they are decisions people routinely live with.

  9. As the saying goes I didn’t fail to plan nor plan to fail. Along the way I had to adjust three times to the goal of double what I thought I would need. Then too having the GI Bill jerked the same year I retired didn’t help, Having the free college money come along after I paid for it myself didn’t help, 401 whatever? Too late Didn’t Apply. I counted on the promise of no medical costs for serving in the Infantry for 24 years. Nope. Another fairy tail.

    I used to think of social security has just extra fun money it urned out to be near 50% and then only because I worked at a job the last few years to get the high five quarters to double

    And every time I upped the retirement ante the Ocasios of the world came along and ripped it off again and again.

    But in the end I after dropping from middle class to upper lower level status I moved South where the cost of living is 40% and that includes medicine. and now I’m above the median into the upper middle class.

    But if you are working and here the likes of Ocasio run their stupid mouths just remember Marx can promise all he wants because Engels will just take it away.

  10. Trump’s latest budget draft actually calls for cuts in social safety nets for seniors. Which completely disregards this report whose findings have already been known for years.

    As a nation we don’t want to spend more on the elderly than young. Yet we don’t want the elderly scavenging through dumpsters in search of food.

    What this report tells us, however, is that socialistic policies will have to play an increasingly larger role in this nation’s future. Conservatives had better resign themselves to that and stop pretending ‘socialism’ is a dirty horrible word.

    1. “Conservatives had better resign themselves to that and stop pretending ‘socialism’ is a dirty horrible word.”

      Who’s pretending? It is a dirty horrible word and even a dirtier more horrible solution.

      So your solution to the lazy people who went through life not doing what was required is to yet steal more property from the ones who did.

      1. There’a no indication the people in question are ‘lazy’. They do have a problem with time-preference, but that’s a different thing.

    2. Which completely disregards this report whose findings have already been known for years.

      Why should he pay any attention to PR jobs cooked up by government employees and liberal think tanks?

      1. I’ve noticed that the people who talk positively about socialism do not have the courage to live in a socialist country. Finding one isn’t hard: there is one about 100 miles off the coast of Florida – minimal travel, too.

    3. Conservatives had better resign themselves to that and stop pretending ‘socialism’ is a dirty horrible word.

      You know nothing but what’s been recycled from talking point mills but presume to instruct people who know something. Before you do that, at least offer a serviceable definition of ‘socialism’.

      1. Tabby, it’s a generational thing. To people under 40 ‘socialism’ is respectable. And if you think Libertarian sentiments will make a grand comeback with a second coming of the Tea Party, you’re in for a gravely long wait.

          1. Tabby, according to right-wing media every Democrat is a ‘socialist’. And this over-use of the term makes a mockery of free-market puritans like you. The more ‘socialist’ is used to describe any non-Trumper, the less impact that term has as a political weapon.

            The Tea Party revolution was a fleeting high-water point for Libertarians that will probably never be seen again. The Tea Party movement was, in reality, racist Whites reacting to Obama. And many of us suspected that all along.

              1. You define it, Tabby. It’s every Democrat, right? ..No..? According to right-wing media it is. Better check with them.

        1. If you’re in your early 20s, have a ton of college loan debts that might be at least partially forgiven (“free”college), Bernie’s MediCare for all proposal (“free”health care),
          subsidized or “free” housing, a free chicken in every pot and a free car in every garage, etc., then socialism might have a strong appeal.
          For the segment that then moves on into a high salaried job, or moderately decent salary, no longer qualifies for the free goodies, and becomes aware that all of these freebees have to be paid for ( higher taxes and/or the Federal Debt Charge Card), socialism and all of this “free stuff” may not look as attractive.

          1. Tom, there are many indications that Millennials are putting off marriage, new cars and home ownership all because of student loan debts. All this could have dim implications for the economy ahead.

            So if you think Millennials are gong to become free-market puritans as they grow older, I’d like to know what your hunch is based-on.

            1. It’ s not a”hunch”, Peter. It’s actually based on the reality that all of this “free stuff” has to be paid for, one way or another.
              One of these days, maybe we’ll get together over lunch and discuss these matters.
              I’ll even give you a handicap and pay for the lunch…..giving you ammunition to argue that there is such a thing as a “free” lunch.

            2. Since population is directly related to Global Climate Change, maybe Millennials are simply being socially responsible rather than concerned about student debt? After all, they chose and freely signed student loan contracts and therefore own that responsibility.

              1. And Thomas, you’d prefer that Millennials never went to college? Because college-educated people tend to be more liberal?

                The problem with that thinking is an uneducated workforce would be bad for our future economy.

                1. Not bad at all, Peter. There’s enormous bloat and waste in the educational system, starting with school calendars derived from 19th c. agricultural cycles, allocating pointless quanta of time in secondary schooling to half-assed liberal education in lieu of vocational instruction, the resistance to proper tracking among school apparatchiks, the resistance to proper disciplinary methods including sequestering incorrigibles, the witless padding of tertiary schooling with distribution requirements at infinitum.

                  As recently as 1928, we got along passably with about 8% of each cohort enrolled in a tertiary institution. As recently as 1974, about 25% of each cohort was receiving a baccalaureate degree. Now it’s 45%, and for what? With proper secondary schooling, we could get along just fine with public tertiary enrollments 1/3 lower than they are today and with private tertiary enrollments 2/3 lower.

                  Did someone mention the witless financing schemes for higher education, or the deplorable hijacking of higher education for inane social work projects?

                  1. Tabby, the real waste in education is For Profit Colleges. They suck the gravy from educational spending. Employers shun diplomas from For Profit Colleges. But most students never graduate; ha, ha, ha. That’s the business model.

                    The For Profit College scam depends on Federal loans. Obama had those colleges on the ropes. But DeVos is oddly sympathetic toward the For Profits. It’s in the name, I think. Free Market Puritans feel an obligation to respect ‘profits’.

                    Your historical statistics only remind us that jobs were more plentiful in the good old Industrial age. It’s too bad high school grads can’t get those jobs today. A few things have changed, Tabby, since 1928. But Calvin Coolidge admirers are partial to that period.

                    1. Tabby, the real waste in education is For Profit Colleges.

                      You don’t know sh!t from apple butter. Commercial institutions account for 6% of total enrollment and are commonly low-overhead distance learning programs.

                      Your historical statistics only remind us that jobs were more plentiful in the good old Industrial age.

                      That’s an absolute nonsense statement. ‘Jobs’ aren’t some sort of mineral. What a job is is an employer and employee agreeing on tasks and wages. That isn’t some fixed resource. There is no secular decline in the ratio of employed persons to persons over the age of 15. That ratio is higher than it was 60 years ago.

                    2. Tabby, commercial institutions account for a disproportionate share student loan defaults. That’s been written about extensively in the mainstream media. Those schools are parasites and you have trouble acknowledging.

                      Jobs aren’t a finite mineral. But good-paying industrial jobs requiring no education beyond high school are certainly rarer today than at any time in the past 100 years.

                      We now have a significant ‘Service Economy’; low wage jobs in the service industry. The good news: ‘Service jobs don’t require much education’. The bad news: ‘No one can raise a family on service jobs’. And even individuals have trouble supporting themselves on service jobs.

                      So Tabby I don’t know what dramatic gains we’ve made in the category of good paying jobs that don’t require education. That ‘was’ the initial subject. But as usual you’ve put up this smokescreen of pretentious wonky terms to make it seem like I”m missing the vital picture here. I’m not.

                    3. Tabby, commercial institutions account for a disproportionate share student loan defaults. That’s been written about extensively in the mainstream media. Those schools are parasites and you have trouble acknowledging.

                      I don’t ‘acknowledge’ it because the your conclusory point is non-sequitur and both your initial and conclusory point are irrelevant to your original contention.

                      The excess default rate for commercial institutions accounts for about 2.5% of those enrolled in two-year commercial institutions and about 8.5% enrolled in four-year commercial institutions. Overall, that amounts to 0.44% of the student body enrolled at all sorts of institutions. It’s a sideshow. (https://nces.ed.gov/programs/coe/pdf/Indicator_CUB/coe_cub_2013_05.pdf)

                      They enroll more marginal students. What do you think’s been happening in higher education all your bloody life? As larger shares of each age cohort enroll, the level of foundational talent of the median student and the student on the margin decline.

                      You get this bilge from talking point mills who’ve made Betsy DeVos the bogey du jour. It’s stupid.

                      (While we’re at it, there is a class of school who enroll scads of students who never finish their degrees. It’s HBCUs. Annual degree awards at HBCUs in this country are such that one can be assured that nearly 40% of those enrolled at any one time will never finish their degree. How you gonna spin that to blame Betsy DeVos?)

                      Jobs aren’t a finite mineral. But good-paying industrial jobs requiring no education beyond high school are certainly rarer today than at any time in the past 100 years.

                      Peter, diplomas may indicate specific occupational training, but, as a rule, they are job market signals. In 1928, it was perfectly normal to arrive at age 18 without a high-school diploma. Most people left school at 14 or 15 and went to work. We live at a time where people ticket-punch for a longer run of years which changes the nature of a job market signal. Nowadays, someone without this credential is telling you that their scholastic performance was below the 30th percentile. The same principle operates in re higher education. The degree is an indicator of trainability. People get diplomas because other people are getting diplomas. It’s an arms race between families. It’s hamsters on a wheel.

                      We now have a significant ‘Service Economy’; low wage jobs in the service industry. The good news: ‘Service jobs don’t require much education’. The bad news: ‘No one can raise a family on service jobs’. And even individuals have trouble supporting themselves on service jobs.

                      The transition from industrial to service employment is a driver of people seeking more formal credentialing only to the extent that service industries lack intramural measures (such as trade certifications) which are granted outside the ambo of the higher education system.

                      No clue how you got the idea that the workforce is being immiserated. Cash compensation per worker (in chained dollars) is half again what it was in 1973 and fringes are more luxurious than they were then as well. About 52% of the working in occupations where prevailing wages exceed the mean of the entire workforce in 1973. I.e., someone whose compensation places him at the 50th percentile today would have been around the 65th percentile in 1973.

                      So Tabby I don’t know what dramatic gains we’ve made in the category of good paying jobs that don’t require education. That ‘was’ the initial subject. But as usual you’ve put up this smokescreen of pretentious wonky terms to make it seem like I”m missing the vital picture here. I’m not.

                      Now you’re attributing to me things I’ve never said.

                      Actual occupational training does not require the time and resources puked into the higher education system today (where 30% of the effort goes to fulfilling distribution requirements) As for signaling, the question at hand is how much value, if any, is provided by 2-year degrees and 4-year degrees that could not be provided by tests administered by industrial psychologists? You have the civil rights bar and our odious appellate judiciary to blame for the demise of occupaitonal testing. Can’t blame Betsey DeVos for that.

                    4. 52% OF FOR PROFIT COLLEGE STUDENTS..

                      DEFAULT ON THEIR LOANS WITHIN 12 YEARS

                      New research on student borrowing has just added more evidence that for-profit colleges load up students with debt that they’re then unable to pay back.

                      Over half (52%) of borrowers who attended a for-profit college in 2003 defaulted on their student loans after 12 years, compared with 26% of borrowers at two-year community colleges, according to a new Brookings Institution report published Thursday.

                      Yet the discrepancy is actually even worse than that number suggests, finds Judith Scott-Clayton, the report’s author. That’s because for-profit colleges are more expensive than community colleges, and students at for-profit schools borrow at a much higher rate.

                      So when looking at a broader group of students—those who borrowed and those who didn’t—Scott-Clayton finds that for-profit college students default at a rate that’s four times that of students at community colleges, using the same 12-year time frame.

                      Concern has grown over the past several years about the rising frequency and level of student borrowing, with the state of student loans often described as a crisis. Yet this new report, based on the latest student borrowing data from the U.S. Department of Education, provides a more nuanced look at which borrowers are actually facing the worst trouble.

                      Edited from: “For Profit College Students Are Defaulting On Their Loans At Alarming Rates”

                      MONEY MAGAZINE, 1/12/18

                    5. 52% OF FOR PROFIT COLLEGE STUDENTS..

                      I provided you a handy link to the Education Department’s own study on the question. Instead, you give me a magazine article written by some cretin. Thanks for nothing.

            3. That would be self-explanatory to most from my comment that you’re replying to.
              I get tired of explaining basic concepts to those who can’t ( or won’t) grasp them.

    4. Old age pensions were introduced first in Germany by Bismark 1889. he is considered a conservative I believe.

      There is an aspect of liberterianism that gone towards the Randian premise that all political philsophies emerge from either individualism versus collectivism. That i think she took from Von Mises without attribution, either. I don’t agree but I see the point

      In my mind, the good of society as a whole is and should be a guidestone for any government regime. If some legislative scheme can be sold on that basis, fine. I have no problem with socialistic programs if they work. And yes sometimes they do. Old age pensions are an example.

      In this country socialized medicine started with Medicaid .it grows, it changes, it’s rhetorical gamesmanship to pretend it’s not a fundamental aspect of the system now. To one degree or another .But the degrees may matter!

      1. Kurtz, I think it was Bismarck who set 65 as the retirement age. When Bismarck drew that line, few people lived much beyond 65. Now, however, people routinely live well into their 80’s. And that, of course, has totally screwed up all financial models regarding retirement.

        1. Higher life expectancies were well-known when both SS and Medicare were layered on to the U.S. system MANY years after Bismark.
          The Ponzi-scheme characteristics of both systems eventually ran into fiscal realities, and that’s always a real shame and a real disappointment when it’s discovered that financial alchemy is a hoax.

    5. Stop whining and live in a socialist country. I hear Venezuela is a socialist Utopia where they have exotic meats, such as zoo animals. You’ll be so much happier there.

      Have the courage of your pontifications. Lead the way.

  11. We’ve set up a system where it is feeling more and more like you are a fool to do things right. So you didn’t pay attention and learn in school, go to college to get a good job? Don’t worry, we will take from those that did, they were obviously privileged. Didn’t save your whole life for when you need assisted living? Don’t worry, we will look at your neighbors total wealth and charge them more.

    That is what happened to my parents when my mom had her stroke. The place that they were at had different rates based on your wealth. Mom has passed and now we have told dad to get his money out of the banks to hide his wealth. You need to do this for I believe 5 years.

    1. Agreed! And payment according to perceived wealth is how you turn a first World Cup try I to a third world country. Which is exactly what the Korrupt Kratz want. After all, far more sheeples in the 3rd world.

    2. Jim, your comment here pretends that life plays out in predictable chapters where sensible people can plan for chapters to come. ..If only that were so..!

      But people often suffer grave setbacks as early as their 40’s. Careers that seem assured fall apart because of a merger, bankruptcy, technological change, change in consumer habits, decline of a community, etc. These changes that can impact the most sensible of employees and leave them greatly diminished in their 50’s.

      A major health crisis can also wipeout the savings of perfectly sensible people. Cancer or heart surgery at age 57 can greatly reduce the wealth of someone who planned for years. Obamacare, in fact, was created to address these crisis’. Catastrophic illness was ‘the’ leading cause of bankruptcy and credit card debt at the time Obama took office.

      Natural disasters and severe recessions are also frequent culprits in destroying the wealth of sensible people.

      Therefore this attitude that poor retirees are merely fools who didn’t plan is a mindlessly stupid premise encouraged by mindlessly stupid Republicans.

      1. What you say is mostly true, but you are picking specific examples and I would be willing to bet that the examples that you have chosen do not make up the 48 percent that have no savings. What percent of the 48% are due to hardship? I don’t know.

        Interesting you bring up natural disasters. Here’s my anecdotal on that. My parents lost their house in 2011 due to a flood from the storm Irene (and no, they didn’t live on a bank of a river). Their ~$170K house was reduced to about $50K. Then Mom had her stroke and…. But, amazingly, dad wasn’t living on the streets after all of this. Why? because he did the right things to be able to survive setbacks. It should be also noted that dad was a math professor for 29 years and raised 8 kids, we were not rich.

        1. Jim, thank God Dad was great at math.

          And I know about floods. My brother in law’s parents bought a beautiful house in Jackson Mississippi in an area that supposedly only flooded once every 100 years. Well that house happened to flood ‘twice’ in 5 years! Luckily my brother-in-law’s dad was a retired Air Force Colonel with a secure pension.

        2. There’s been a strong trend of companies and other organizations to move away from defined benefit pension plans to subsidized 401k s.
          A friend earning c. $40,000 per year had a fairly standard 50% match for the first 6% of the salary contributed to the 401k.
          So a $ 2400 annual contribution would end up as a $3600 annual amount with the company’s company’s match.
          My “relatively young” friend asked me if I thought it was a good idea to participate in the 401k.
          There’s no other place that one can legally make a risk- free 50% a year, plus the prospect of a decent return on that $3600 annual contribution.
          The math of working out the total size of the 401k after a c.40 year work history is not that difficult, but I won’t try to closely estimate it here.
          There are plenty of formulas out there that will tell the exact amount, based on an assumed rate of return… 5% would be doable with a fairly low-risk investment strategy.
          The fact that a fairly bright, fairly well-educated person in a position to easily handle a $2400 401k contribution would even have to ask “if this was a good deal” is somewhat surprising and a cause for concern. There seems to be way too many “financially illiterate” people lacking to ability to make sound financial decisions.
          I don’t pretend that’s the only reason that financial problems/ hardships can develop, but I can say that I’ve witnessed a lot of ignorance involving what “should be” fairly basic, common sense decisions.

          1. Tom,

            Here is your friends scenario:
            40K/year
            Annual raise assume 3%
            5% Return
            After 40 years:
            Employee contributions – $186,392
            Employer contributions – $93,196
            401K balance ~$700,000

            7% Return ~$1,100,000

            Fun calculator. It’s interesting to see what numbers effect the outcome.
            https://www.bankrate.com/calculators/retirement/401-k-retirement-calculator.aspx

            What I always tell people, if your company is willing to mach anything then you are throwing away money by not doing it. In your friends case the market could drop 33% and he would have lost nothing.

      2. “people often suffer grave setbacks as early as their 40’s..”

        Is this new? No. It’s as old as civilization.

    3. We’ve set up a system where it is feeling more and more like you are a fool to do things right. So you didn’t pay attention and learn in school, go to college to get a good job?

      Don’t be stupid. Most people don’t get a baccalaureate degree and among the cohorts now retiring, only about 25% did so. We wouldn’t be better off with more people putting themselves through higher education (it’s bloated as is). Also, in any society, division of labor generates different types of work. You’re always going to have a situation where about 30% of the population have crummy jobs if they’re employed at all and most of them will do this sort of work all their lives. There’s no society where everyone has a good job.

      1. True enough. But, you are still not my forced responsibility because of the choices that you have made.

          1. Sure, sounds better than the alternative. When I am tired from work and feel like just giving up, two things pop into me head, one, my dad and his work ethic and two, a passage from Atlas Shrugged (i don’t remember it word for word) about not using being tired as an excuse to keep going.

                1. The ratio of public expenditure to domestic product hit a plateau in 1974. It’s fluctuated within a narrow band since then, bar the period from 2009-11 when the Democrats tried to jack it up on an abiding basis. He haven’t been headed anywhere for 45 years.

  12. It’s not surprising that people aren’t saving for their futures or having children, when the dominant amazonian political party has made a fortune peddling racial hatred, apocalyptic futures, and then offers the hand-wringers endless free-stuff from “the government” an all those 1 percenters. The DNC is about to reap what it has sown for decades! Unfortunately, all of us will suffer.

    1. I’ll go with declining and/or stagnant wages which have not kept up with productivity, the loss of good paying blue collar and staff level white collar jobs with the decline of unions, and the successful coralling of national wealth by the top %s.

      1. Coming down hard on Pelosi again? She of the top one tenth of the top one percent. But the true questions remain to be asked and answered.

        How many of those who don’t have enough did have enough until those who were subjected to Common Core got to be in charge of the money and quickly applyuing common quack math destroyed those carefull planned and sufficient retirement funds.

        Chief among them the recent President who destroyed 30% of the value of the dollar’s buying power

        ‘but here’s a source that explains why

        info@justfacts.com

        Todays gem is teachers marking down students with failing grades who got this one wrong.

        three times five equals what in numerals.

        Most students wrote 3×5=15 and all were failed.

        The teacher quickly explained I wanted not 5+5+5 = 15 but 3+3+3+3+3=15 so I made the problem hard as I was too busy writing upp student evaluations to take time to teach.

        THis follows my previous comment on using gobbledegook to describe verbally two parallel lines

        The question remains how much will thse teachers have in their retirement accounts when heir students take the reins of finance and seek their revenge?

        and who will explain that borrowing and not producing but using the borrowed funds to inflate will never produce anything but deflation and that’s why Mom and Pop are now living in your basement.

  13. Need to add there is no money in SS. Every cent of tax paid is spent immediately on current benefits or when there was a surplus put into the general fund to be spent by law. (read the original Charter of SS at ssa.gov). Tax people 12.4% of their gross income, spend it all then after that huge tax criticize people for not saving? Or is it a suggestion that government needs to take more even with the looming shortfalls in the ability to meet the promised (but meager) return on SS.

    1. Social Security is and always has been an income transfer program. There are some rubrics in its corporate structure that mimic a private pension plan, but it is not that and has never been that.

      The old age component of Social Security can be readily repaired by instituting a cohort-specific schedule of retirement ages which will allow a fixed ratio of retirees to workers. Instead, Congress has opted for irregular hikes in payrolls conjoined to a prescribed (and insufficent) increase in the retirement age phased in over 22 cohorts. Because fools.

      1. Original Definition. To ensure an income for the destitute. Came at the end of the Great Depression which happened some years after the stock market crash and was solved only at the expense of going to war which resulted in full employment.

        Immediately after government (Truman) rewrote the rules from 100% employment is 100% working at mulliganed 5%. That stayed until Clinton who rose the mulligan to 10% and that stayed the same until Obama came up with the answer he wanted and then picked a percentage that fit.

        Along with inflate devalue and charge the results to the elderlly by using their retirement funds as the target… simply by adjusting COLA downwards. Clinton used another trick which was passing forward to the next administration a high increase in T Bills over a shorter time period

        But I predict none pf them will out do the Common Core Generation.

  14. “There is a badly disturbing report out of the U.S. Government Accountability Office that estimates that almost half of older Americans approaching retirement have nothing saved for retirement in a 401(k) account or its equivalent.”
    *************************
    I vote we dispense with the truth-dulling word “disturbing.” It’s overused and cliche and is rarely true. Most people use it to avoid the real word they want to use which is “bad.” Sometimes (as JT has done here) they combine the euphemism and the word they want and say “badly disturbing.” I’m not sure that is better than just good old, easily understood, morally clear “bad.” As in “there is a bad report ….” That has the value of precision, moral rectitude and direct, unfiltered communication. Too often we think we offend people with plain language or we use vague language to masquerade our true emotions thinking that an emotional response will render us weak in the other’s eyes. Here’s one vote for saying what you truly believe, backed by reason but conveying what is essentially you. You don’t need to be course or profane just real. Authenticity never goes out if style. We could use more clear speaking which Is inevitably the result of honest thinking. Viva plain spoken Harry Truman. Boo “is is” Bill Clinton.

    1. Well said, Mespo!

      What about the word ‘concerning’? Or, does it go the way of ‘disturbing’?

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