<p><a href=“A third of people have nothing saved for retirement”>http://www.usatoday.com/story/money/personalfinance/2014/08/18/zero-retirement-savings/14070167/</a></p>
<p>Among 65 or older, it’s 14% who don’t have any savings not counting pensions or SS. 14% doesn’t sound too bad. I am guessing some of them have SS or pension.</p>
<p>
This sounds pretty bad to me.</p>
<p>If I don’t have enough, I’ll just mooch of off my kids. I figure they owe me. ;)</p>
<p>I’ll bet a lot of those primary residences still have a mortgage, too.</p>
<p>This is from 5 years ago, but it is an interesting report by the Social Security Administration about the sources of income for retirees and how it is changing over time:</p>
<p><a href=“The Disappearing Defined Benefit Pension and Its Potential Impact on the Retirement Incomes of Baby Boomers”>http://www.ssa.gov/policy/docs/ssb/v69n3/v69n3p1.html</a></p>
<p>I wonder how much a difference there is between Baby Boomer 2, 3, and Late Baby boomer groupings - my 4 siblings and I are spread over 7 1/2 years yet 2 are in category 2, 2 are in category 3, and one is late baby boomer group. I guess the breakdown is to see trends - which perhaps can be seen within smaller chunks of time.</p>
<p>Most of the companies I know of eliminated pensions long ago. The only people I know who have them are those who are city, state and federal workers.</p>
<p>^ @DocT, my wife and I still have pensions, but they might not be available to newer workers. The pensions are from some international banks we’ve worked at (and one at which my wife still works). Our pensions will be roughly the same amount as we get from SS, which isn’t all that great, but it beats a sharp stick in the eye.</p>
<p>ETA: I’m a second boomer and my wife is a third boomer based on @dadinator’s link.</p>
<p>I think you’re right, SOSConcern – younger baby boomers are a lot less likely to have pensions than are older baby boomers. </p>
<p>My MIL (depression-era, not a boomer) kept asking what our pensions were going to be like, and could never quite grasp that neither of us HAD pensions. </p>
<p>Interesting dadinator. The ssa article is 5 yeas old, but it does support the trend we’ve noticed.</p>
<p>"The percentage of workers covered by a traditional defined benefit (DB) pension plan that pays a lifetime annuity, often based on years of service and final salary, has been steadily declining over the past 25 years. From 1980 through 2008, the proportion of private wage and salary workers participating in DB pension plans fell from 38 percent to 20 percent (Bureau of Labor Statistics 2008; Department of Labor 2002). " </p>
<p>Not sure how much the 20% has dropped. But I think it is fair to say that all of our kids will have self-funded retirements (plus hopefully SS is still around too.) </p>
<p>DH and I are in the group that did original retirement planning based on DB assumptions with that 38% crowd. We’ve had to readjust. Luckily I had wise coworkers that coached the newer hires max out 401K matching. Financially savvy Bob and Stan each pulled me into their office and said something to the effect of “thou shalt take this opportunity seriously… enroll NOW” . </p>
<p>Did pensions just disappear or were they replaced by defined contributions? If replaced by defined contributions, it is not so bad, is it? It seems a bit conradictory that on the one hand people lament how much better they could have invested instead of paying SS tax, on the other they think it couldn’t be more tragic pensions are being replaced by defined contributions. Many people I know accumulated well through TIAA-CREF, a defined contribution plan. They are quite happy how it turned out and don’t complain they don’t have pensions. From the article,</p>
<p>“Finally, some analysts suggest that worker demand has partly contributed to the popularity of DC plans over DB plans”</p>
<p>
I think mostly replaced, although some lucky ones (
) got grandfathered in. The problem with DC plans is that many of them have shamefully high expense ratios, front-loads, etc., so the results at TIAA-CREF are not necessarily indicative of how others did. Some HR departments, especially at medium-sized firms, forgot that they had any responsibility for the employees, and self-dealt for management and the company. </p>
<p>Additionally, many people’s results do not track the results of the market at large because they:
<p>Many companies (such as IBM) either totally eliminated their defined benefit plan or eliminated their defined benefit plan for new employees, and increased the match on their 401k plan.</p>
<p>I work in state government and have a state pension. My brother works for IBM. I would take his 401k over my pension any day of the week- and so would he. </p>
<p>My brother in law and I work at the same company. For his employee group, they froze the pensions to what they’d already accrued, and started a defined benefit plan. He has lost so much potential money in this deal, as it is very, very difficult to get enough in a defined benefit plan to replace the same amount of income he would get from the full pension.</p>
<p>Some of these government pensions do not sound like a great deal because the worker is forced to contribute to them. I don’t think that is common (or is it even done at all) in the private workforce. Your govt pension would be a lot better if the money you contributed just went to your own 401K plan, and not towards the pension.</p>
<p>Some 25+ years ago, as the transition from DB to DC was underway, some people were slow in understanding that responsibility for retirement would be falling more on their shoulders rather than megacorp taking the responsibility. In order to encourage participation, my then-employer allowed us to contribute 6% of our salary (up to whatever the fed limit was then), and they would match 2 for 1. Yes, you put in 6% and they put in 12%. </p>
<p>Because many were young and retirement seemed forever away, or didn’t want to reduce their take home pay, or still thought that their retirement would be comfy without it, they didn’t contribute. I told them that it was as close to free money as they would probably ever see, but they just didn’t get it. </p>
<p>In the same way that people rate themselves as much better than average drivers ( or 94 percent of professors rated themselves above average relative to their peers), people think that they can plan retirement better than average, can time the markets, can pick stocks and funds better than average, etc. it seldom ends well, but thankfully people can also delude themselves into thinking their results were above average, a notion that would dispelled if they used software to track their actual results. </p>
<p>^-depends on the state.</p>
<p>In my state you can top out 80% of the average of your highest three years. While now employees must contribute 9-11% of their pay, older employees started at much lower or zero contributions. And they don’t pay the 12.4% for FICA. It’s a pretty good deal.</p>
<p>I’ve worked for several companies that had no 401k matching. I don’t see how that can ever beat a pension unless you are some kind off investment wizard.</p>
<p>notrich- do you think the employee wages are 6.2% higher than they would be because the employer does not contribute to ss?</p>
<p>You can top out at over 100% of your salary in my city - but there are no cost of living adjustments…</p>
<p>multiplier of .03, means at 33 years and 4 months, you make 100% of salary.</p>
<p>Sorry if this was covered earlier (171 pages?!), but do any of you disagree with your spouse about how much you need to retire and when you’d both like to retire? </p>
<p>How have you resolved the issues?</p>