According to a new Government Accountability Office (GAO) analysis finds that among households with members aged 55 or older, nearly 29 percent have neither retirement savings nor a traditional pension plan.
My typical business client does not fit in this category. But I have clients who do. To be in the top 10% of earners in the entire US you need AGI of about $120,000. Now this can sound like a lot of money, but with a mortgage, HELOC, two car payments two kids, student loans. It is easy to get to the point where you are living paycheck to paycheck while having a decent job.
Some started out fine, making money saving a bit trying to get ahead. But a loss of a job in the tech bubble burst in 2001, or the recession of 2008 easily dried up all reserves and to keep the family together they went into used the equity of the home. Or the lack of raises and even low inflation can cause paycheck to lessen.
Or the costs of the medical insurance leaped higher each year over the raises to where they are making less on a take home basis.
There are many causes to the lack of savings at all levels. But the fact that the government seems to be targeting the presumed middle class for increases will only make it more difficult.
Even among those who do have some retirement savings, their nest eggs are too small to retire on. The agency found the median amount of those savings is about $104,000 for households with members between 55 and 64 years old and $148,000 for households with members 65 to 74 years old. That’s equivalent to an inflation-protected annuity of $310 and $649 per month, respectively, according to the GAO.