Half of American’s Have No Retirement Savings

by Jon Dulin · 12 comments

no retirement savingsA recent survey by LIMRA, which is an association related to the financial services industry, found that 49% of American’s have no retirement savings. The percent is even higher for 18-34 year olds, of which 56% have no retirement savings. This includes either an IRA or a retirement plan at their place of employment.

Real Stats For No Retirement Savings

Because we get too worried about these numbers, we need to keep a few things in mind:

  • We don’t know who was surveyed. They could have interviewed a bunch of people that are unemployed which would skew the numbers. (Note, I’m not saying this was done, I’m just pointing out a possibility.)
  • Times are tough. Many people may have cut back on their savings just to afford daily life.
  • The 18-34 group percentage is misleading. Many 18-22 year olds are in college, meaning they aren’t going to be saving for retirement. Add to that those that jump right to grad school or travel for a few years after graduating and we’re looking at 26-27 when most will start saving. Personally, I didn’t start until I was 25.

There Are Many That Have No Retirement Savings

But with all of that said, there are many people who have no retirement savings and even more that save too little. In fact, almost every year a new survey comes out and the numbers are usually close to what they were before.

I would like to hear from or interview someone who is currently has no retirement savings to understand their reasons why. If you are covered at work with a 401k plan, it only takes a few minutes on your lunch break to call or email human resources for the paperwork to start contributing. The benefits department will take care of the rest.

How To Buck The No Retirement Savings Trend

If you are part of the group that has no retirement savings, all hope is not lost. There is plenty you can do. The key is that you start now so that you can take advantage of the effect time has on your investments.

For starters:

  • Sign up for your 401k plan at work. It won’t take much time at all. Contribute at least the amount needed so that you get the company match.
  • Finally, make it a point to increase how much you save each year. You don’t have to increase the amounts a lot, just $20 per month. It doesn’t sound like much, but when that money compounds, it grows into a lot of money. Trust me. When I started to save for my retirement, I was saving $30/month. I look back on how much I have now and am blown away.

I save as much as I can for retirement. I’d like to save more. I can’t imagine not saving and trying to get by in my last years of life with nothing. It’s not how I want to live.

Readers, do you have no retirement savings? If not why not?

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{ 12 comments… read them below or add one }

Wendell May 24, 2012 at 8:43 am

Of course I'm saving! This is the best time to save – if you can. Yes, I am struggling and could definitely use more money from my paycheck. But, as I've learned, I need to pay myself first. I am not without food, shelter, or basic needs. Therefore, I push myself to save for retirement. I would rather "suffer" a little now, than later. I have been saving since my first job at 17 years old. I am 30 now. That's even going through undergradate school (while working full time) and grad school. SAVING IS JUST SOMETHING THAT NEEDS TO BE DONE…NO MATTER WHAT!!!

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moneysma May 24, 2012 at 1:15 pm

Awesome job!! I agree, save no matter what.

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addvodka May 24, 2012 at 9:25 am

This makes my skin crawl a bit – I think lots of people expect that the government will end up paying a lot of their retirement, or they think they are too young to worry about it, but I don't see this as the case. I'm only 23 and I put away a small amount (very small, but at least I'm doing something!)

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moneysma May 24, 2012 at 1:17 pm

Some of the young people I talk to feel this way…why have plenty of time to start saving. They never think about where the money will come from when they are taking care of their spouse, kids and possibly helping their parents or siblings out in a few years. Plus, I don’t think they grasp the time value of money in that you will need to save a lot more to reach your goal the later you start.

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Nick May 24, 2012 at 11:05 am

As Charles Barkley would say… that's terrrrrrible. I'm maxing out any tax-favored account I can get my hands on and saving more outside of retirement accounts! I'm hoping "Old Nick" will be happy with me :)

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moneysma May 24, 2012 at 1:17 pm

Love it!

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Justin @ The Family Finances May 24, 2012 at 12:23 pm

I currently save up the company match in my 401k, which is 6%. Plus the company puts in an additional 2% whether you contribute or not. I find it scary that so many people don’t put anything away for retirement. They’re just asking for trouble later on in life.
Justin @ The Family Finances recently posted..Financial Progress Takes TimeMy Profile

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moneysma May 24, 2012 at 1:18 pm

Good to hear you are taking advantage of the free money from your company!

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Modest Money May 24, 2012 at 12:58 pm

I'm currently saving for retirement, but not as much as I should be. It is crazy to think of the people who aren't saving anything at all. I'm not sure what those people are thinking. You're right though that polls like this are easily influences to get the specific results that they want to report. For example, maybe they went to a grocery store in the middle of the afternoon on a weekday. Or maybe they focused on other areas where they knew less people would be in a position to save.

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moneysma May 24, 2012 at 1:19 pm

I try not to take the surveys too seriously. But when you hear random people talking about how little they have, it’s scary and sad.

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Emily @ evolvingPF May 26, 2012 at 12:52 pm

I started saving when I got my first job after college and have continued through graduate school, all in an IRA. I dream of a day when I might get an employer match…

I’m a big proponent of living beneath your means, so I think no matter what you earn you should set up your life so that you can save.
Emily @ evolvingPF recently posted..We Have Too Many Gift Cards!My Profile

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Helen September 11, 2012 at 7:49 am

I’m one of the many Americans making $10/hour, underemployed with a college degree. That’s why I’m not saving!

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