The Bottom Line: More Americans forsaking retirement planning to get by

One third of the future retirees is quite a few people. This is the direct result of corporations reneging on retirement plans in the 1980s. Things used to be better. Profits were distributed more evenly. You are right. There will be many future problems because of this.

retirement? ha, thats a funny word for me to even say!! I will be working till the day I die unless I get too sick to work

Ah, you're one of the growing number of worktirees Fran! Join the crowd. ; )

Agreed Joe T. Thank you so much for weighing in.

I agree with Jennifer and Joe, but honestly, what are we supposed to do? Hubby was laid off for 10 months last year and found a job paying half his former wages...and we're so grateful to have it! I have cut my retirement savings down to the minimum required for the match. I guess I hope my health holds out and I can just keep working. Fran is now my hero!

It is just plain scary what is happening in this country.

thanks for sharing..

Life is change. Not always for the good or bad either.

Thank you for writing this article, Ms. Meacham. Definitely been on my mind these days, concern for those on Social Security and the ever increasing cost of living. And, of course, the cost of heating fuel in cold areas of the US makes getting through the winter that much more difficult and a hardship. May we all help others as well as we can......

I'm still putting 7% into my 401K at work. My company matches 50% of the first 6%. But since the first of the year, my account has lost more than what I deposited and my employerer contributed combined. It's hard to keep putting money into it every two weeks.

You bring up an excellent point Dana H. My friend's account has been cut by one-fifth over the past year, which was one of her reasons for pulling out of the market in the form of taking an early contribution (and the coinciding 20 percent penalty).

One would argue that the time to keep contributing, however, is when the market is down. The good news is that the same amount contributed now buys you more stocks than than a year ago. And while the decrease over the past year must be quite disappointing, you still have just as many stocks, indeed you have more as you contribute more. If and when the market does improve, your account will be that much larger.

Regrettably the highs you saw one year ago were indicative of the stock market being at an all-time high. It's expected that there will be some correction. Compare this year's statement against the one from three years ago, and you may feel better about your decision to keep up the retirement account funding. (P.S. And please feel free to let us know how it goes.)

RE: I have cut my retirement savings down to the minimum required for the match.

Amanda, as long as you're taking advantage of the employer match, then you're ahead of the game. Way ahead. Keep up the good work, and keep your head up. We'll all make it through.

When I wrote an article about stockpiling food, it got an overwhelming response (stick with me here, this IS related to your topic). Right then and there....I had a sense that thing were not going well for future retirees. We have always taken advantage of a company plan for retirement, one with a match, but we hedge our bets by dividing our funds between American and foreign investments.

I hate to do that but we really do get the best returns that way and we'll be the ones living off the income someday. I look at it as a way to try to avoid being a burden to my children or other Americans.

So far, we have not had to raid our retirement accounts but we have pinched pennies more than I ever thought possible. My fingers are nearly bruised and callused from all that pinching!

I'd pinch dollars, too, but they tear too easily and the clerks in the grocery stores get all grumpy when they see dollar bills taped together. They start checking to make sure the serial number match up and then the people behind me in line start muttering....

lol, you're on a roll Jo C.!

That's good to know Jennifer. Thanks for the advice.

I'm still putting as much as I can into my 401(k) at work, in hopes that I'll eventually be able to retire. Thanks to a hostile takeover, I lost the pension and medical benefits I would have had in retirement, and then lost my job as well. I had once hoped to "retire" in my early 50s and only work part-time, but now I'll be doing well if I can retire at 62 (which the government still considers to be early).

I don't know, I hear people say they can't afford groceries but then they're going out for drinks to talk about it? And/or they're picking up iced lattes at Starbucks every morning. I think people just have their priorities screwed up.

this has been caused by greedy corporations (and their all to human stockholders and officers, all of whom make fortunes every year even when they are cutting back on wages, employees, and benefits) Such short sightedness will come back to bite them in the end and I can't wait to see it. Who will they sell their yaughts and BMWs to when they are the last to fall?

I'll just wait for the last laugh. We pay our three credit cards in full every month. That makes us the forgotten minority. Of course if the Washington DC beltway idiots suceed in scamming every drop from the Social Security program, then we'll be in a bit more trouble. Guess we won't get that $142 a month any more. sigh....

RE: I hear people say they can't afford groceries but then they're going out for drinks to talk about it?

I was hoping someone would pick up on that Moggy k. I had to same thoughts when writing about it. Granted, it was a $2 beer (well, two $2 beers). That's about as cheap as someone can get at a pub around here. And I came to the conclusion that -- yes, while many people's priorities are indeed "screwed up" as you phrased it -- sometimes it's a necessity to get out and feel like you're a normal person by catching up with a friend over a couple drinks at the local pub or coffee shop.

P.S. When pennies are tight for me, I go a bit stir crazy. I'm really appreciative of Gather.com's gift cards for those occasions when I "need" to shop but haven't budgeted for it. They're a real "life" saver. ; )

Amy B., thank you for sharing your story. You've certainly been dealing with a lot lately. My thoughts are with you as you work through these unsettling changes.

My pleasure LaRue B.

Sandy F., congratulations for being part of the "forgotten minority"! It takes diligence and foresight to pay off your credit card bills each month (the way, incidentally, it should be). You'll at least have a little bit of security in retirement, in that you won't have additional debts to continue paying off when wages are no longer coming in. Kudos to you and yours.

Oh I know Ms. M. but in reality it can't be all that bad if you can scrape up the 2 bucks.I have been in a place where I honestly could not come up with a dollar let alone 2!

I bartended for over 20 years and I can't tell you number of sob "I'm so broke I can't pay attention" stories I heard from people while they sucked down 40 dollars worth of drinks they could have consumed at home for 10 dollars.

I hear my co-workers complain about being broke. Then I hear them talking about how they don't cook and they eat out for lunch and dinner almost every day. (I go out to eat maybe 5 times a year)! I cook almost every night of the week and I bring my lunch to work, usually leftovers from last nights dinners.

We all need our little breaks but I think most people are just spoiled and think that they are entitled to them, even when they can't afford them. I think that's called living above your means.

Those people raiding their retirement funds so they can buy a Gucci bag and go out for cocktails aren't getting any sympathy from me.

I hope you don't mind Ms M....

Sandy, there is a website called www.debtfreeweirdos.com you might enjoy. I'm almost there I can see the light at the end of the tunnel..and man does it feel good!

No problem Moggy K. I'm glad you were able to get that off your chest, and I completely see your point. Living and eating frugally are quite simply a matter of setting priorities. You and I share many of the same ones.

Time to learn all one can about starting a small home business, or part-time endeavor that brings in an experimental income stream that can be re-invested. No matter how small or humble this business simply requires a few hours a week of our time, the proceeds of which can be re-invested in our business or invested in the market, or saved for a down payment on a fixer-upper no money down real estate investment. Even very young people have baby-sitting businesses, lawn-care businesses, plant-care businesses, dog-walking businesses, pet-sitting businesses, or are engaged in maintaining homes for people who may be going on vacation. If we invest in ourselves, we can start looking for opportunities. Opportunities are everywhere. Some of the biggest fortunes were made during the depression of the 20's and 30's. My father once worked for a man who started with a hand cart as a rag picker during the depression. By the time that man died he was a multi-millionaire! For those who would like an extra $40,000 a year---stop watching television! That's the average amount a person can make by employing TV time in a second business of one's own!

wow that sure is a lot of people. The economy does not help anything. I am scared for people in our community.

Another great article, Ms Meacham. I am very much afraid for many people. My husband and I are fortunate that he started an IRA and later, when available, a 401K when young. However, he had planned on already being retired or close to it by now and that isn't happening anytime soon. At least we have what we do.

I can see Moggy's point too but it isn't the case with everyone who is hard up. Sometimes an illness or job loss at an older age can be the straw that broke the camel's back.

We went through some extremely tough times in the 80's but never touched the retirement funds. We lost several years of contributing but never withdrew anything.

I had to cash out everything to pay for my bills after my accident, and I still owe somewhere in the neighborhood of around $2.5 million or so. Or maybe it's $5million? I forget. Spending a year in the hospital is pretty darned costly!

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I am SO glad I have the career I do - teacher - in the city where I live - NYC - that has the benefits it does - pension, continued health benefits, TDA, etc.
I will retire at 56, with almost 60% of my salary.
Although we're all afraid of homelessness, in my case (at least the way I see it) the point is moot.
I cannot imagine continuing to work into my 60s let alone 70s or more.

Leslie, I'm jealous...You must've started teaching right out of college. I spent most of my life running around, never thinking about, or planning for the future. I always thought I'd figure it out when I got there. Well, now the future is here, and like Fran, I'll be working till the day I die...

Yes, some people are cutting back on retirement but let's keep things in perspective. The greatest source of wealth in the United States is still retirement funds, and the these funds are growing.

As of last year there was $17.8 Trillion invested in retirement funds and pensions. That is a lot of money.

Now compare that to the TOTAL EQUITY of all millionaires and billionaires in the country - $17.2 Trillion.

Put simply, just the retirement funds of average Americans exceeds the total wealth of the wealthy.

I held on to my 401(k) after I left my corporate job, but I haven't contributed to anything new since then. Not a good move, I know. Looks like I fit the AARP respondents to a T. Don't think I'll be retiring anytime soon, but I don't think I want to -- I love my work! Still, I'd be in deep do-do if something unforeseen happened, like a medical emergency or, heaven forbid, the death of my spouse.

Nice post, and good reminder, by the way.

Hooray for this article making the Gather home page under the "Money" category! Thank you all for your comments. Great input.

So glad to see such a vital article make feature status. I hope everyone reads this and takes heed.

P.S. And even though it is up the thread a bit, I think it'd make a super article to note how well liquor and alcohol sales do during a recession or (shudder) depression. The statistics on that are quite interesting. Sale don't really drop that much. People may buy the cheaper stuff but they still buy it - maybe even MORE so. I've also found it interesting that SOME studies indicate that people with financial problems tend to gain weight or be obese. When their finances get under control, many lose weight without officially dieting.

Appetite and financial issues - now that is an interesting connection. Does financial stress make us feel hungrier or emptier and in need of something to fill it? Gee, I'm not even feeling financially stressed and now I want some popcorn. I'll diet tomorrow :)

Another great timely piece Jenn! 10.

As you know, I am a proud frugalian, I don't even think I could live any other way. I hate seeing waste of any kind, especially the kind that wastes our non-renewabe natural resources. When we walk our dogs and see all the water people waste in a vain effort to keep their lawns green in a desert climate I just want to puke. Me? During our rainy season I catch water coming off my roof downspout into big plastic garbage cans and then use the water to water my lawn, I've still got 2 full barrels left so far. When I have something I don't need I donate it so someone else can have it and I get that tax break on the donation... or I'll put it on freecycle and give it freely to someone else who needs whatever it is I don't. Why isn't everyone doing this?

I too pay off my credit cards in full each month, to do otherwise is a lesson in how to waste your money and how to never have any savings. I can't believe the number of people who live on credit, don't they know they're being fleeced by the credit card companies for interest rates that equal or exceed 18-29%? That's called usuary.

But, of course, our current goverment...meaning the repuglicans... want to end social security as we know it, rather than fix it and raise the benefits to the current cost of living and provide everyone w universal medical coverage.

This insane thinking makes sense only to the very rich who don't need the umbrella of protection that social security provides. One important thing to remember during the coming election season... if you don't want to be a homeless elderly someday then don't ever vote for a repuglican!

Thanks for sharing...

When I lost my job, I had to cash out my pension and retirement plans. I didn't have a new one to roll them into.

My retirement plan is very simple. I can distill it to one word: Death.

Now that'sdistillation Chris W. Good luck with that.... ; )

Sorry to hear about that Shannon. A lot of people are in the same position. Did you know at the time that you could roll over the retirement plan to an IRA without having to cash out and take the penalty? Some people don't, thinking that they have to move the plan to another employer or else they're out of luck.

My pleasure Beth.

Digital Dogs, it's so nice to hear from you again. Hear, hear to proud frugalians! (And thank you for your sage words.)

I really enjoyed your article and reading all the comments that it generated. Things are definately becoming very scary. My husband and I are OK at the moment, not having any balances on our credit cards, cars are paid off, still putting money away for college, braces, and emergencies, we also still contribute to the 401 K matching at my husbands company and have a good nest egg from his last company, unfortunately though the market is so bad that we don't have any more money in there than we did 2 years ago.

I worry a lot about our friends. We are all in our early 40's and many of our friends have no retirement savings at all, nor do they have any regular savings. They are all just struggling to make ends meet, and can't even think about savings.

I have to say a lot of them have done stupid things, I have one friend whose monthly expenses exceed his income and he sent his kid to private school. He also had another child in day care which was something he had to do. When it was time for his day care child to go to regular school he could have saved all that money that he had been spending on day care, but what did he do, he sent his other child to the private school as well. I don't get it personally.

I keep thinking that when we are all old, that all of our friends will be living with us because they will have no money.

Some choose to surrender to circumstances, while others find new opportunities and ways to make things work. Right now presents a wonderful time to be investing, believe it or not. It's the times of adversity that we face and overcome that lead us to greater riches..

Excellent points M C.

BTW Rae, thank you so much for stopping by again to respond!

Retirement savings? What's that?

I have yet to hold a job that pays enough for me to survive, let alone actually be able to save any money back. Despite having a good (and very expensive) education, my work history is filled with crap jobs.

That bites Heather! What are you doing these days?

Doing odds-and-ends from home and trying to put together the money to pursue a business opportunity that I know that I would be great at. Problem is, finding the money....