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Retiree Confidence About Comfortable Retirement At Generational Lows Even As Millionaire Ranks Jump By 16%
The fundamental schism within American society continues, with $1 million plus households spiking in 2010 by 16%, even as the broader population has increasingly less (if any) money saved up, and the confidence of retirees who believe they have enough money saved up to last them through their retirement years drop to a generational low. The split between the bankers and Main Street is continuing to crystallize as simply one between the rich and the poor. One wonders how long before pitchforks are involved?
The number of U.S.
households with a net worth of at least $1 million jumped 16 percent
last year after dipping sharply during the financial crisis, an
industry consulting group said on Tuesday.
Households with a net worth of $1 million or
more, excluding their primary residence, totaled 7.8 million in 2009,
up from 6.7 million in 2008, according to Spectrem Group.
The number of millionaire households shrank by 27 percent in 2008, it said.
The study also found ultra high net worth
families -- those with at least $5 million -- grew 17 percent last year
to 980,000, Spectrem said.
Curiously this comes out at the same time as the Employee Benefit Research Institute releases its 2010 Retirement Confidence Survey. Little point to comment on the survey's findings:
20TH ANNUAL RCS: The 2010 Retirement Confidence
Survey—the 20th annual wave of this survey—finds that the record-low
confidence levels measured during the past two years of economic
decline appear to have bottomed out. The percentage of workers very
confident about having enough money for a comfortable retirement has
stabilized at 16 percent, which is statistically equivalent to the
20-year low of 13 percent measured in 2009 (Fig. 1, pg. 7). Retiree
confidence about having a financially secure retirement has also
stabilized, with 19 percent saying now they are very confident
(statistically equivalent to the 20 percent measured in 2009) (Fig. 2,
pg. 8).
Worker confidence about paying for basic expenses in retirement has
rebounded slightly, with 29 percent now saying they are very confident
about having enough money to pay for basic expenses during retirement
(up from 25 percent in 2009, but still down from 34 percent in 2008)
(Fig. 3, pg. 9).
PREPARATIONS STILL ERODING: Fewer workers report
that they and/or their spouse have saved for retirement (69 percent,
down from 75 percent in 2009 but statistically equivalent to 72 percent
in 2008) (Fig. 11, page 14). Moreover, fewer workers say that they
and/or their spouse are currently saving for retirement (60 percent,
down from 65 percent in 2009 but statistically equivalent to
percentages measured in other years) (Fig. 13, pg. 15).
MORE PEOPLE HAVE NO SAVINGS AT ALL: An increased
percentage of workers report they have virtually no savings and
investments. Among RCS workers providing this type of information, 27
percent say they have less than $1,000 in savings (up from 20 percent
in 2009). In total, more than half of workers (54 percent) report that
the total value of their household’s savings and investments, excluding
the value of their primary home and any defined benefit plans, is less
than $25,000 (Fig. 14, pg. 16).
CLUELESS ABOUT SAVINGS GOALS: Many workers continue
to be unaware of how much they need to save for retirement. Less than
half of workers (46 percent) report they and/or their spouse have tried
to calculate how much money they will need to have saved for a
comfortable retirement by the time they retire (Fig. 23, pg. 22).
AMERICANS EXPECTING TO WORK LONGER: Although the age at which
workers report they expect to retire shows little change from 2009, a
longer-term look finds significant change. In particular, the
percentage of workers who expect to retire after age 65 has increased
over time, from 11 percent in 1991 to 14 percent in 1995, 19 percent in
2000, 24 percent in 2005, and 33 percent in 2010 (Fig. 29, pg. 28).
INSTITUTIONAL CONFIDENCE LAGGING: Americans
continue to lack confidence in institutions. Just 19 percent of workers
and 22 percent of retirees report they are very confident about banks,
while 12 percent of workers and 13 per-cent of retirees say they are
very confident about insurance companies (Fig. 19, pg. 19). They are
most likely to express confidence in private employers (23 percent of
workers and 27 percent of retirees very confident) and least likely to
feel confidence in the federal government (11 percent of workers and 8
percent of retirees) (Fig. 20, pg. 20).
The chart demonstrating existing retirees "confidence" says it all:
The moral of the story: you better have all your money in bankrupt companies like AIG and become an overnight millionaire or else you will be working at the McDonals drive thru until you are 90. Good luck to all.
Full EBRI Study below.
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I'm tapped out, Marv. American Express has a hitman out looking for me.
As long as we have American Idol and cage fighting, we don't need no steeenkin retirement!
Thank God for legal drugs (television, booze, cigarettes, Viagra) illegal drugs (via a million Internet pharmacies or your local street corner pusher) and various other distractions. When the masses don't wish to look in the mirror, we simply break them all (except the ultimate one, the television) encouraged by the very thieves we don't wish to acknowledge.
The ultimate circle jerk. The problem isn't "them" folks, the problem is us.
Jim Carry was really onto something in The Cable Guy.
The rich are edible. When pitchforking, try not to mutilate the choicest cuts.
No way Chet! Do you have any idea how polluted the typical American is? It's amazing we are still walking around.
Hello! Cut taxes for the top 2%. That will fix it!
(source: Fox)
Remember, everyone else not in that $1M range is just lazy.
Gosh, it's so obvious ;)
Will this be BYOPitchfork or will I need to bring my own?
Yes and yes.
You don't want to be the dumbass with nothin' but dirt clods. (Pssssst. Buy more than one now for a tidy profit in the near future)
Paul Farrell is squakin' about Empire Collapse again:
This number will need to be reconfigure after Uncle Sugar lays claim to all retirement accounts. Doubtlessly it will show the joy of the people and their certainty that Uncle Sugar will treat them right.
On a serious note, none of this is new
even in best of times 70% of americans (of all economic classes) reported living paycheck to paycheck, if they made $25K or $150K. We do not educate people about economics investing or finance than unleash them onto the world. And now you see half have never bothered to try to figure out what they need in retirement because "it all works out in the end". A quarter don't have $1000 to their name (many of course enjoying wage arbitration as they compete with Chindians) and half have less than $25K. Excluding the proportion of those who are under the age of 30 that says a lot.
The average 401k balance is $55Kish. Should be able to live a life of luxury in retirement on that... for a good 2 years at least.
Last point, in the old days people went into retirement with their abode paid off. Hence they needed far less in income. Now, the abode is refinanced 8x to sunday to pay for the life 'we deserve'... well until the strategic default since the lender 'tricked us'. But larger point - a great majority of the boomers will go into retirement without their home paid off, causing another huge stress.
Did I mention buy stocks, all is well? Thank you.
Paying the mortgage and taxes is now optional.
What do you mean "now" paying taxes has always been optional.......
Are you bringing up Harry Reed's infamous interview? I watched it and my mind exploded with the awesome power of his Newspeak. I don't link to it because I lost several IQ points watching it, I would have been better served drinking paint thinner then listening to his insane ramblings.
Watching Harry Reid speak?
You must have a strong stomach.
good point
I still think the old fashioned way...
Technically, you have to carry torches with the pitchforks...
Seriously, I wonder what percentage of the 19% that pronounced themselves "Very Confident" had retirement backstopped by a government entity...
Probably the same percentage that still thinks the government represents the will of the people.
Nah, that probably represents the percentage of government workers in the survey. If you are a government worker, you're not concerned.
At least not yet. But you should be....
One wonders how long before pitchforks are involved?
It's probably more appropriate to ask about Uzis and AK-47s and when they come out in Detroit and Los Angeles. I would say by summer's end, after Michigan and California have declared Chapter 9 and all social service spending dries up.
Pitchfork? Forget it...we'll all need iron.
They won't declare chapter 9, I'm still a student but I don't think sates can enter into bankruptcy under the current system. Municipalities under them can but not the states themselves from looking at the statute. So we are entering into new territory with state bankruptcy. And this also assumes they obey the law which is in doubt after the GM debacle.
http://www.law.cornell.edu/uscode/11/usc_sec_11_00000109----000-.html
(c) An entity may be a debtor under chapter 9 of this title if and only if such entity—
(1) is a municipality;
(2) is specifically authorized, in its capacity as a municipality or by name, to be a debtor under such chapter by State law, or by a governmental officer or organization empowered by State law to authorize such entity to be a debtor under such chapter;
(3) is insolvent;
(4) desires to effect a plan to adjust such debts; and
(5)
(A) has obtained the agreement of creditors holding at least a majority in amount of the claims of each class that such entity intends to impair under a plan in a case under such chapter;
(B) has negotiated in good faith with creditors and has failed to obtain the agreement of creditors holding at least a majority in amount of the claims of each class that such entity intends to impair under a plan in a case under such chapter;
(C) is unable to negotiate with creditors because such negotiation is impracticable; or
(D) reasonably believes that a creditor may attempt to obtain a transfer that is avoidable under section 547 of this title.
Your read is true about states. The question is what happens when a state simply can't/refuses to pay on its debt, and can't borrow any more.
Not bankruptcy per se, but many of the same effects. Arguably worse, because there wouldn't be bankrupcy-like protection from creditors. They'd be coming after state-owned real estate and other property.
My gut reaction is the court forcing the state to sell assets and raise taxes to meet the shortfall and pay off creditors. But honestly I don't know since I'm not aware of this happening before. Whole new ballgame about to start. Might be seeing another hammer blow to federalism.
As if Slate can read our minds:
http://www.slate.com/id/2246915/
"states are said to have sovereign immunity, as protected by the 11th Amendment, which means they can't be sued."
Now guess how many widows and orphans know that....
A riot is an ugly thing...
http://www.youtube.com/watch?v=Zw5pmDgWMaU
of the 16% new millionaires, 25% are government workers and 75% are former government workers
And 100% are future government workers
Get rich or die tryin. Because if you aren't rich you are poor, poor, poor.
head on over to TF in General and look at the UIllinois payroll.
Fucking police LTs making 185k and u know that includes nice fat public-sector bennies and a pension.
I guess the time was a few years ago to transition into the public sector. They've just kept getting massive raises.
Life is so much like the game of Monopoly. Someone wins and someone takes the board and flings it shouting "do over". If played out it's a long painful game.
This division will keep getting bigger and bigger....just a fact of life Ms. Garrison.
We use the term "millionaire" today in the same way we used
it in the 60's and 70's and it is just not the same.
The eq. today to the millionaire of the 60's and 70's would be a "ten millionaire"
So I think we need to move the millionaire bar up a notch or two to account for inflation and for accurate comparison.
Today's millionaires drive 10 year old cars and live in relatively crappy, but almost paid off Houses!
Not exactly what came to mind when the term millionaire
was used 30 to 40 years ago...
Perhaps we should use the term "rich" instead and define that as a person with a NW od 10 million or more.
A millionaire today is certainly not rich...
FWIW
This has occurred to me often when I read one of these stories. The original use of the word in working-class circles was someone with so much money they could do anything they wanted and never think about it. A novel published in 1902 called Brewster's Millions described a man who had to squander $1,000,000 in one year to inherit even more, and centered around the unimaginable task of running through that sum in so short a time. This story has been filmed several times, the most recent in 1985 by which time the ante was upped to spending $30 million in one month -- just to keep it credible for modern audiences. If there is any point to these ravings, it is the futility of defining a special class of people who have some arbitrary amount of wealth, whether $750K, one million dollars, or fourteen and a half. Writers trying gin up a story out of nothing.
16% more new millionaires simply because of the market "recovery" from 2008. It's not like we created a bunch of new millionaires by increasing productivity or really growing the economy.
In 2011 we'll create 95% more new millionaires by destroying the currency ;-)
"What's a 'pitchfork'?
Who makes a really fast one?
Does it come with cupholders?"
Don't look for help from anyone but yourself....
Our economy has it backwards. Young people need money not old people. The old don't care about being stylish. They don't need new cars because they can barely drive anyway and moving their bowels is more important than moving their ass. They don't even need new TV shows preferring their old ones in endless reruns.
Many workers continue to be unaware of how much they need to save for their next flensing by Wall Street. There...fixed that for them.
Maybe savings are low because (1) unemployment, and (2) why save for the next flensing?
I agree with the comment above. $1 mil isn't all that these days. I think a HUGE contributing factor to our abysmal savings is the divorce rate in our country. While my own family is antecdotal, I think given the high rates across the country, this can be fairly extrapolated. If my parents had stayed together, they would have paid of the mortgage and together be in far better shape than they now are divorced. I really hate that my mother (a housewife turned housekeeper) now makes about $30k per year, employed by a very wealthy individual, yet can't get health coverage (no group plan). Consequently, I had to hire her so she could be covered under a group plan, yet her premium is over $700 per month, which is 28% of her GROSS income. She's now 54, a long ass way from MediCare and she has no choice but to work until her body breaks. She put $20k down on a modest condo ($95k) about 5 years ago. My father has nothing. They are both blue collar (no college education). I think this is the same story for many Americans. It's easy to marginalize about American Idol, etc. While I think this is true to some degree, I really feel it's more a function of escapism. What else is this "class" supposed to do exactly? My mother never had an option to live beyond her means, her only option was to make ends meet. Unfortunately, there are no jobs to be had, certainly not in Ohio. Further, my area has been slammed by the loss of the steel industry followed by the failures of GM and Delphi. Sure some of these people did a lot wrong, but I have to say that for most Americans, they truly didn't have the funds to save 12% or 20% of gross income, certainly not while rasing kids and (thanks to further societal decay) now their grandkids.
It's pretty depressing and all I know is that the only people that won't experience a lowered standard of living will be those in the $10million plus NW.
IMHO
right. reality is damn frightening. meanwhile back at the ranch, bankster ponzi ops are backstopped by the official sector and the media is full tilt propoganda. to think that this can end well is just plain stupid.
Maybe now that the perception of eternal economic security has been blown away, more marriages will survive (if people get married the first place) ?
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