Sunday, March 17, 2019
Average weekly earnings for non-managers are now $779, which is an almost 40-year high. Millions of those now approaching retirement age spent their entire lives earning the equivalent of $40,000 a year, at most. Little surprise they don't have six-figure retirement savings. The simple fact of the matter is, it takes enormous discipline to save even 6% for your 401(k) at that income level. In a country of 330+ million people, shockingly few have enough retirement savings to support the stereotypical leisurely golden years. Commodity king Dennis Gartman shared some disturbing numbers last week.
[T]he average balance in 401(k)s, 403(b)s, or IRAs fell to $95,600 at the end of last year from $104,300 at the end of the 3rd quarter for 401(k)s, to $78,700 from $85,100 for 403(b)s and to $98,400 from $106,300 for IRA balances. It was not the drops in value that caught our attention; it is the fact that the averages are only at or near $100,000, forcing us to wonder what sort of retirement can the average retiree look forward to with this minimal sum of money set aside? Is that all there is? Really? Is that really all there is? If so, we are in very real trouble.
The average IRA balance is not necessarily indicative of retirement savings generally, as many other vehicles exist, but it's probably a good proxy.
And an average of around $100,000 won't add much to the mere monthly Social Security benefits. That is not enough for even a minimal retirement.
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