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Average vs Median Household Savings

bernorange

By bernorange
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bernorange

bernorange 8367

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The question is irrelevant. The story is how unprepared the median person is prepared for retirement. On that score, the article does explain.

Stats

  1. The average American household has $175,510 worth of savings in bank accounts and retirement savings accounts as of June 2018.
  2. The median American household currently holds about $11,700 across these same types of accounts.
  3. The top 1% of households (as measured by income) have an average of $2,495,930 in these various saving accounts. The bottom 20% have an average of $8,720.
  4. Roughly 83% of savings are in located in retirement accounts like IRAs and workplace-sponsored retirement savings plans like 401(k)s.
  5. Millennials, who have just started their savings journey, have currently socked away an average of $24,820. Gen Xers have $125,560 in retirement savings. Baby boomers and those born before 1946 have an average of $274,910.
  6. 29% of households have less than $1,000 in savings.

Point number 2 is the most relevant point. 50% of household have less than $11,700 in savings.

...

https://moneymaven.io/mishtalk/economics/shocking-look-at-average-vs-median-household-savings-6LFokUv9GkG5-_0zWbALUA/

I wonder if the numbers are skewed a bit by folks "saving" their money in investments like real estate, business ventures and the markets versus traditional savings vehicles.

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SuingToGetAMessageBoard?

SuingToGetAMessageBoard? 3861

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Posted
13 hours ago, bernorange said:

https://moneymaven.io/mishtalk/economics/shocking-look-at-average-vs-median-household-savings-6LFokUv9GkG5-_0zWbALUA/

I wonder if the numbers are skewed a bit by folks "saving" their money in investments like real estate, business ventures and the markets versus traditional savings vehicles.

I think people just simply have less stored away than they used to.  I was ready to type that the Consumer Price Index outpaced wage growth and blame it on that, but I just checked it and from 1989 to now they are in line with each other.  Maybe it is more just standard of living "creep,": newer iphones, more tech in our cars, multiple tvs in our houses, foreign travel and everything else we need to show that we've made it in the world that cuts into our ability to put money away.

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Helobious

Helobious 9467

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I emphasize saving now because I was taught that growing up. But damn if I don’t sometimes think “I’m saving this money now so that I can sit on my ass and ‘travel’ maybe when I’m old. How fun is traveling when you’re an old person? And I’m saving for when I get sick when I’m old, so that I can be cured and my oldness can be prolonged.” Just seems kinda pointless to me now. I’m sure I’ll feel different when I hit my 40’s or so though.

I do suspect that for many they were not taught how to save or they live by the “I’m here for a good time not a long time” mantra. 

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Lhorn

Lhorn 4971

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I think people now just assume that they are going to have to work to an older age than their parents did.  They underestimate how sucky its going to be to put on a Home Depot apron at the age of 70 and tell people where the lightbulbs are.  They also gamble that their health will allow them to be productive.  The fall back plan seems to be burden your loved ones or throw yourself on the mercy of society and be dependent on public assistance.  Tis a small price to pay for having the latest phone and never having your car break down because it's always 3 years old or newer.

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Nice Guy Eddie

Nice Guy Eddie 13529

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Lack of savings is why social security will never go away.  Even if/when the social security accounts are zero, the govt will have to fund it because some will have nothing else to live in during old age.    Old people vote so old people get benefits.

But people are delusional when they think they will work until 70 or 75.  Decent chance that your employer or Home Depot won’t want you.  Or Home Depot will have 200 applying for 1 job.    I’m also skeptical that someone after a lifetime of low savings would be in good health at 70.  

 

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HOOKEM4

HOOKEM4 5044

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We are doing well on the retirement savings front, but our other savings are embarrassingly low. Had a 4 year run of just about the worst luck one could have with regard to our house and work. Wife lost her job when she had our second kid and decided to stay at home with the boys, no big deal until... 

We had a 5 year old roof completely go to shit on us. People we used vanished in the recession and had to eat the cost of the new roof, decking, interior damage, etc.. It wasn't an act of god so insurance wasn't helping. 

We had our (thankfully detached) back patio/deck catch fire because someone in our house insisted on putting shitty party string lights up and didn't turn them off one night. Somehow they caught the deck on fire and burned it down along with a fence and all the stuff on it (insurance did help on this one but it was a joke).  I had just renovated the deck and added a roof 2 months earlier. Fun times.

Then we had a waterline slowly leaking in a wall of our master bathroom, we never noticed it until we noticed termites. The wall where the leak was, backs up to the kitchen so we had to gut the kitchen as well as master bath. 

All things combined, basically wiped out all of our savings and then some. The good thing is we own the house and 2 cars outright and can close to double what we have in the house so in reality we do have "savings" in the form of equity, but that doesn't help when you need to be liquid in the event of a unexpected event. 

Shits hard out here for a middle American household. If we weren't so diligent in saving while in our 20's, we would be completely fucked right now.

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Nice Guy Eddie

Nice Guy Eddie 13529

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I think people can count the value of their future social security checks in determining their retirement savings.  Yes the program is set to be insolvent at some point in the future but for political reasons seniors will always receive their payments.   The only scenario that it won't get paid out is if the entire US economy and govt collapse.  And if that occurs, I doubt your 401k balance will fund your retirement either.  

to be clear its better to have your non-Social Security retirement savings at an amount to cover >100% of your expenses but if you work ~40 years, SS will be a decent monthly check for you.    

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Hugh G. Rection

Hugh G. Rection 156

Posted
Posted (edited)
12 hours ago, Nice Guy Eddie said:

Lack of savings is why social security will never go away.  Even if/when the social security accounts are zero, the govt will have to fund it because some will have nothing else to live in during old age.    Old people vote so old people get benefits.

But people are delusional when they think they will work until 70 or 75.  Decent chance that your employer or Home Depot won’t want you.  Or Home Depot will have 200 applying for 1 job.    I’m also skeptical that someone after a lifetime of low savings would be in good health at 70.  

 

It's happening:

This is not the scenario that would have been envisioned a generation ago for the "Golden Years" of retirement.Consider: Today nearly one in three of the 65-69 cohort and about one in five of the 70-74 cohort are in the labor force.

 

Edited by Hugh G. Rection
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HOOKEM4

HOOKEM4 5044

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Posted
7 hours ago, Okie State said:

Curious if insurance covered anything on that leak in the wall. I'm always worried about shit like that.

A big fat fuck you is what we got from insurance on that one. 80k later we have a new bathroom and kitchen. That and all new guts on a bunch of the house because of it.

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deadshank

deadshank 24653

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Posted
8 hours ago, HOOKEM4 said:

We are doing well on the retirement savings front, but our other savings are embarrassingly low. Had a 4 year run of just about the worst luck one could have with regard to our house and work. Wife lost her job when she had our second kid and decided to stay at home with the boys, no big deal until... 

We had a 5 year old roof completely go to shit on us. People we used vanished in the recession and had to eat the cost of the new roof, decking, interior damage, etc.. It wasn't an act of god so insurance wasn't helping. 

We had our (thankfully detached) back patio/deck catch fire because someone in our house insisted on putting shitty party string lights up and didn't turn them off one night. Somehow they caught the deck on fire and burned it down along with a fence and all the stuff on it (insurance did help on this one but it was a joke).  I had just renovated the deck and added a roof 2 months earlier. Fun times.

Then we had a waterline slowly leaking in a wall of our master bathroom, we never noticed it until we noticed termites. The wall where the leak was, backs up to the kitchen so we had to gut the kitchen as well as master bath. 

All things combined, basically wiped out all of our savings and then some. The good thing is we own the house and 2 cars outright and can close to double what we have in the house so in reality we do have "savings" in the form of equity, but that doesn't help when you need to be liquid in the event of a unexpected event. 

Shits hard out here for a middle American household. If we weren't so diligent in saving while in our 20's, we would be completely fucked right now.

Shoulda had American Home Shield.

 

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Rusty Shackelford

Rusty Shackelford 414

Posted
Posted
1 hour ago, Hugh G. Rection said:

It's happening:

This is not the scenario that would have been envisioned a generation ago for the "Golden Years" of retirement.Consider: Today nearly one in three of the 65-69 cohort and about one in five of the 70-74 cohort are in the labor force.

 

The olds are able to find jobs today, but not so much in the future when >50% of jobs get automated

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Okie State

Okie State 3848

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Posted
A big fat fuck you is what we got from insurance on that one. 80k later we have a new bathroom and kitchen. That and all new guts on a bunch of the house because of it.
Well, fuck. My SIL had a water line burst in an upstairs bathroom and insurance covered everything. I should probably find out what I'm covered for.
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Lhorn

Lhorn 4971

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Posted (edited)
2 hours ago, BurntEyes said:

My strategy differs from most but not all. I'm now on a path to have zero debt, possibly in a little as 2 years. I have no home mortgage and if all goes well, I'll only be paying property taxes and "cable" bill in sub 5 years.

No electricity nor water bill. 

I might not have a lot of savings at that point but it will be all liquid.

What are you doing for electricity and water?

 

Quote

But people are delusional when they think they will work until 70 or 75.  Decent chance that your employer or Home Depot won’t want you.  Or Home Depot will have 200 applying for 1 job.    I’m also skeptical that someone after a lifetime of low savings would be in good health at 70.

NO shit.  These assholes aren't blowing their money on kale and organic blueberries.

Edited by Lhorn
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Macanudo

Macanudo 13019

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Posted
22 hours ago, Lhorn said:

I think people now just assume that they are going to have to work to an older age than their parents did.

I'm 48.   I have thought for a while that I'll work into my mid 70s.   Might be out of necessity, might be because I don't want to sit on my ass all day.  Either way, I just don't see some kind of utopian retirement in my future.   Between retirement accounts, investments and real estate, I do have a fair amount saved but I just don't see that holding out with the costs of retirement (healthcare, eldercare, etc.).   I'm probably going to work pretty close up til my death.

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Superhero

Superhero 8858

Posted
Posted (edited)
On 8/27/2018 at 8:18 PM, CooterBrown said:

Nope. The vast majority of people don’t own shit. It doesn’t matter what that shit is.

 

But my neighbor's cousin's brother said these Dale Earnhardt commemorative plates would be worth a lot one day.

 

 

 

[Edit] And I thought I was just joking. There's a site with the going rates for these commemorative racing plates.

http://www.lhcoll.com/pl-list.htm

Edited by Superhero
Much wow
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52-80

52-80 19271

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Posted
9 minutes ago, BurntEyes said:

I own some land and it has a natural spring. I have to repair/build the existing/new spring pump. It's potable with filtration, and I am installing solar panels. I might keep city water for drinking. Might be able to install enough panels to actually profit from providing back to the grid.

I'm also going to set up a green house and some area for growing  veggies and collect rain water for those.

Looking at potential sources of protein too. Duck for eggs and maybe rabbits. I hate chickens. There are deer trails on my land too, but that's far less reliable and volumes are low.

Think a very practical "off grid" micro farm/ranch.

I do have to live in the middle of nowhere, outside of Texas. However, I'm not THAT far from a major airport. 

but water you doing about zombie defense?

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Brew

Brew 3049

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Posted

I keep very low liquid savings in relation to my income. Annually I take my distribution and buy real estate, business interest, etc rather than sit on cash. I do max fund retirement and put money in 529’s so that is the savings realistically. Theybare both invested, so I would rather have everything else in something tangible outside the market or cash. I’m gambling on no apocalypse coming, but if it does is cash going to do me any good anyways?

Statistically, I see a much higher rate of savings in the last few graduating classes. They are all in the 401k plan, most drive cheap vehicles, etc. Who knows what their student debt kid is though.

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G650

G650 14278

Posted
Posted
On 8/28/2018 at 9:01 AM, HOOKEM4 said:

 

We had a 5 year old roof completely go to shit on us. People we used vanished in the recession and had to eat the cost of the new roof, decking, interior damage, etc.. It wasn't an act of god so insurance wasn't helping. 

We had our (thankfully detached) back patio/deck catch fire because someone in our house insisted on putting shitty party string lights up and didn't turn them off one night. Somehow they caught the deck on fire and burned it down along with a fence and all the stuff on it (insurance did help on this one but it was a joke).  I had just renovated the deck and added a roof 2 months earlier. Fun times.

Then we had a waterline slowly leaking in a wall of our master bathroom, we never noticed it until we noticed termites. The wall where the leak was, backs up to the kitchen so we had to gut the kitchen as well as master bath. 

 

Got damn man. That's a bitch.

I somewhat feel you, I have a 5 year old bathroom I got renovated by a contractor, and basically the shower pan wasn't put in properly, nor was the drain, and my whole floor has to come up now.

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G650

G650 14278

Posted
Posted
7 hours ago, BurntEyes said:

I own some land and it has a natural spring. I have to repair/build the existing/new spring pump. It's potable with filtration, and I am installing solar panels. I might keep city water for drinking. Might be able to install enough panels to actually profit from providing back to the grid.

I'm also going to set up a green house and some area for growing  veggies and collect rain water for those.

Looking at potential sources of protein too. Duck for eggs and maybe rabbits. I hate chickens. There are deer trails on my land too, but that's far less reliable and volumes are low.

Think a very practical "off grid" micro farm/ranch.

I do have to live in the middle of nowhere, outside of Texas. However, I'm not THAT far from a major airport. 

 

I mean, I have no debt either, but this seems extreme.

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Aqua Buddha

Aqua Buddha 14625

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Posted
21 hours ago, Nice Guy Eddie said:

I think people can count the value of their future social security checks in determining their retirement savings.  Yes the program is set to be insolvent at some point in the future but for political reasons seniors will always receive their payments.   The only scenario that it won't get paid out is if the entire US economy and govt collapse.  And if that occurs, I doubt your 401k balance will fund your retirement either.  

to be clear its better to have your non-Social Security retirement savings at an amount to cover >100% of your expenses but if you work ~40 years, SS will be a decent monthly check for you.    

20 hours ago, Hugh G. Rection said:

It's happening:

This is not the scenario that would have been envisioned a generation ago for the "Golden Years" of retirement.Consider: Today nearly one in three of the 65-69 cohort and about one in five of the 70-74 cohort are in the labor force.

 

This is why I'm always nice to old people working retail.  They're not doing it because they want to.  They're doing it because they have to.

Other posts have touched on it, too, but most people's retirement planning factors in them working their current job until they voluntarily retire.  What they miss is being laid off at a certain point and not being able to find a job or being forced into retirement because of health reasons.

 

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Nice Guy Eddie

Nice Guy Eddie 13529

Posted
Posted
2 hours ago, Aqua Buddha said:

 

Other posts have touched on it, too, but most people's retirement planning factors in them working their current job until they voluntarily retire.  What they miss is being laid off at a certain point and not being able to find a job or being forced into retirement because of health reasons.

 

This 100%.  Many companies look to the olds or close-to-olds when deciding layoffs.  Hopefully its disguised as an early retirement package but that won't be anywhere as good financially as continuing to work.  The one exception is if the person being laid off can quickly find other employment.  And that's not easy when you are nearing retirement.  You think people will value your experience but perhaps only in short term assignments.    

You need to be conservative when estimating your remaining work life and anything past 60 doesn't seem as guaranteed.  Perhaps even try to hit much of your retirement financial goals by 55.  Then the rest is gravy.  

If you're in a govt role (teacher, postal worker, etc.) you probably have more security in working until the mandatory retirement age, if you want.    

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Wally Fairway

Wally Fairway 5590

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Posted
11 minutes ago, Nice Guy Eddie said:

This 100%.  Many companies look to the olds or close-to-olds when deciding layoffs.  Hopefully its disguised as an early retirement package but that won't be anywhere as good financially as continuing to work.  The one exception is if the person being laid off can quickly find other employment.  And that's not easy when you are nearing retirement.  You think people will value your experience but perhaps only in short term assignments.    

You need to be conservative when estimating your remaining work life and anything past 60 doesn't seem as guaranteed.  Perhaps even try to hit much of your retirement financial goals by 55.  Then the rest is gravy.  

If you're in a govt role (teacher, postal worker, etc.) you probably have more security in working until the mandatory retirement age, if you want.    

A) You are absolutely correct on the laid off/downsized/reorganization risk. I was let go, after the sale of the company in 9/2013 (at age 55) and I worked contract until 12/2015 (and benefits didn't start until 1/2016). COBRA and ACA health insurance cost me over $50k in those 2 plus year of consulting. I stopped making retirement contributions, and all in all it completely changed my retirement planning.

B) Some of those gov't retirement benefits will look good, right up until they figure out that they are bankrupt and "reorganize" the benefits (see Detroit, and what is going to happen in Illinois). The older gov't pensioners will have no chance to make up what they lose in the filing; and younger workers will have to refigure out their long erm retirement options.

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G650

G650 14278

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Posted

Yeah, my dad ended up in a real no man's land. He was planning on retiring at 65, but his company merged when he was 63. His position was going to be the one reduced vis a vis his counterpart in the other side of the merger, but it drug on for a year, so it ended up being at 64 when he was cut loose. Got a few months severance so he just cut back a bit, sucked it up and called it a day.

I hit my number to retire in my late 30s, but at a number that doesn't make me terribly comfortable. I keep working with a very specific number in mind, and the fact my son might want to do this (god I hope not),  which are the only two things that keep me going.

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El Tri

El Tri 412

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Posted
1 hour ago, Wally Fairway said:

A) You are absolutely correct on the laid off/downsized/reorganization risk. I was let go, after the sale of the company in 9/2013 (at age 55) and I worked contract until 12/2015 (and benefits didn't start until 1/2016). COBRA and ACA health insurance cost me over $50k in those 2 plus year of consulting. I stopped making retirement contributions, and all in all it completely changed my retirement planning.

B) Some of those gov't retirement benefits will look good, right up until they figure out that they are bankrupt and "reorganize" the benefits (see Detroit, and what is going to happen in Illinois). The older gov't pensioners will have no chance to make up what they lose in the filing; and younger workers will have to refigure out their long erm retirement options.

this. working in the high tech industry i have zero illusions of working past my mid 50s. anything after that is gravy.

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TwiceHorn

TwiceHorn 31597

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Posted
5 hours ago, G650 said:

Got damn man. That's a bitch.

I somewhat feel you, I have a 5 year old bathroom I got renovated by a contractor, and basically the shower pan wasn't put in properly, nor was the drain, and my whole floor has to come up now.

MIght have to sell a bike or a watch!  👹👹

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G650

G650 14278

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Posted

I've had some hilarious conversations with my investment guy over the years about some of the trusts he manages. Obviously no names, but truly mind bottling stories of improvidence and profligacy. Two individuals who are from the same pool of money are on track to spend 50 million in about 15 years each.

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FondrenRoad

FondrenRoad 4378

Posted
Posted
On 8/29/2018 at 5:04 AM, BurntEyes said:

I own some land and it has a natural spring. I have to repair/build the existing/new spring pump. It's potable with filtration, and I am installing solar panels. I might keep city water for drinking. Might be able to install enough panels to actually profit from providing back to the grid.

I'm also going to set up a green house and some area for growing  veggies and collect rain water for those.

Looking at potential sources of protein too. Duck for eggs and maybe rabbits. I hate chickens. There are deer trails on my land too, but that's far less reliable and volumes are low.

Think a very practical "off grid" micro farm/ranch.

I do have to live in the middle of nowhere, outside of Texas. However, I'm not THAT far from a major airport. 

What's your contingency plan if you get sick or injured?  My grandparents had a self sufficient setup that was robust, albeit not as robust as yours, but health problems had them spending the last 10 years of their lives living in a room at my uncle's house.

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