401(k) balances hit record $89,300 last year

[spacejamz]

I thought 401(k) balance averages would have been higher...much higher...

http://money.cnn.com/2014/02/13/retirement/401k-balances/index.html

This was the most shocking part to me though:

People on the verge of retirement, ages 55 to 64 years old, saw their nest eggs grow to an average balance of $165,200 from $143,300 in 2012.

 

[hal2kilo]

I thought 401(k) balance averages would have been higher...much higher...

http://money.cnn.com/2014/02/13/retirement/401k-balances/index.html

This was the most shocking part to me though:

People on the verge of retirement, ages 55 to 64 years old, saw their nest eggs grow to an average balance of $165,200 from $143,300 in 2012.

Stupid grasshoppers.

 

[Zaap]

I thought 401(k) balance averages would have been higher...much higher...

I'm just curious- why?

 

[IronWing]

I'm surprised they are as high as they are. Between folks pulling money out to weather the bursting of the housing bubble and the Baby Boomers being the Grasshopper Generation I would have guessed the average for folks near retirement age would have been much lower. One thing to keep in mind is that the values provided are for folks who have any 401(k) savings.

 

[ivwshane]

Yeah, the 401k retirement thing isn't working. A majority of Americans are well below where they need to be for retirement savings.

Maybe when crime goes back up as well as homelessness people will start thinking about their fellow man before corporate profits.

 

[AViking]

Poverty is going to very real for most Americans in retirement.

 

[PricklyPete]

Yeah, the 401k retirement thing isn't working. A majority of Americans are well below where they need to be for retirement savings.

Maybe when crime goes back up as well as homelessness people will start thinking about their fellow man before corporate profits.

It isn't working vs what exactly?

 

[Mai72]

I thought 401(k) balance averages would have been higher...much higher...

http://money.cnn.com/2014/02/13/retirement/401k-balances/index.html

This was the most shocking part to me though:

People on the verge of retirement, ages 55 to 64 years old, saw their nest eggs grow to an average balance of $165,200 from $143,300 in 2012.

Is $165,000 enough to retire at 65? If you live another 20 years that's only 8,250 a year. If you factor in social security it's still not enough. I wonder what a gallon of milk and gas are going to be in 10-20 years. Inflation is going to be a bitch for most people.

Most people will not have enough to retire. All of their retirement hopes and dreams are all tied into their 401(k)s. I don't know the answer. Maybe diversifying is the best way to safeguard your retirement.

In other countries the children take care of their elder parents.
Maybe become a part time Walmart greeter until you die.

 

[ivwshane]

It isn't working vs what exactly?

What we had before but traded for 401ks were pensions.



"Traded" is probably not the best word since it implies workers were given an option.

 

[smackababy]

Is $165,000 enough to retire at 65? If you live another 20 years that's only 8,250 a year. If you factor in social security it's still not enough. I wonder what a gallon of milk and gas are going to be in 10-20 years. Inflation is going to be a bitch for most people.

Most people will not have enough to retire. All of their retirement hopes and dreams are all tied into their 401(k)s. I don't know the answer. Maybe diversifying is the best way to safeguard your retirement.

In other countries the children take care of their elder parents.

If you work 25 years @ $66k per year and put away 1%, you get $165k without any fluctuation. Whose fault it that you put away such a paltry amount for the entirety of your career?

 

[Matt1970]

If you work 25 years @ $66k per year and put away 1%, you get $165k without any fluctuation. Whose fault it that you put away such a paltry amount for the entirety of your career?

Want to check that math?

 

[Mai72]

If you work 25 years @ $66k per year and put away 1%, you get $165k without any fluctuation. Whose fault it that you put away such a paltry amount for the entirety of your career?

I agree 110% with your statement. The problem is young people aren't looking towards the future. In fact, a lot of young people are very pessimistic about their future. You know the saying...YOLO!

Many young people are cashing out their 401(k)s.

These cash-out balances averaged $15,500, and were especially common among young and low-income workers. More than 40% of participants between the ages of 20 and 39 and 50% of workers earning between $20,000 and $30,000 had opted for the cash.

What are they doing with their cash? Are they putting it back into other retirement plans? Are they investing in gold, property, or IRAs? I have a hunch that most are cashing out and they are making unsound purchases with their retirement funds.

It starts at home. If your parents are not teaching you how to invest and save for retirement, then the chance that you are going to invest and save wisely diminishes. My parents were spenders. They loved to spend and they did not save for retirement. My mom passed a few years ago, and left my dad with a ton of debt. He collects social security and that's it. This is a man who at one time was making $120,000 a year. I caught a lot of their bad spending habits. I have had to retrain myself to think differently. I now have money saved in an IRA. I'm also looking into investing in silver, and I may purchase property in Thailand in the near future. I had to be aware of my actions. Most people don't realize it until it's to late.

 

[Doppel]

Interesting point: that is the average balance, not what the average person has. If you include people without a 401k balance I think the average adult of 55 has something less than half that figure.

 

[smackababy]

Want to check that math?

Oops! There was an extra zero in there. It it 10% per year then, for 25 years. And that is if it gained zero and you had no additional contributions. Still, not the fault of the Government you either made very little or only worked very few years.

 

[Vic]

The average balance there is only for those employees who participate. Half of working America doesn't even participate in their employer's 401k plan.

 

[Mai72]

Oops! There was an extra zero in there. It it 10% per year then, for 25 years. And that is if it gained zero and you had no additional contributions. Still, not the fault of the Government you either made very little or only worked very few years.

You know it's not all black and white. What about people that have lost everything due to this economy? What about people who have had a serious illness and they had went through their retirement funds to fight it? Not every person who doesn't have a retirement is lazy. Not everyone in America has the opportunities that we currently enjoy.

You may find yourself in a very bad situation. I know it's hard to fathom when you're young.

 

[Zaap]

^ All true, but it's still better to have some plan (and best of all one that tries to at least factor in unforeseen downturns) vs. no plan at all.

 

[Mai72]

^ All true, but it's still better to have some plan (and best of all one that tries to at least factor in unforeseen downturns) vs. no plan at all.

True! I'm not saying you should go through life and spend recklessly. Having a plan is definitely the better choice. I don't think anyone would disagree.

 

[Engineer]

Does this article (haven't read0 account for the fact that many people have more than one 401k (or have rolled them into an IRA)? Based on 401k balances, I have a ZERO balance. I currently have a Simple IRA (small company) and my previous 401k's have been rolled into IRA's.

 

[theeedude]

Looks like we can get rid of SS

 

[michal1980]

Looks like we can get rid of SS

whats the balance in the SS account?

 

[Doppel]

Does this article (haven't read0 account for the fact that many people have more than one 401k (or have rolled them into an IRA)? Based on 401k balances, I have a ZERO balance. I currently have a Simple IRA (small company) and my previous 401k's have been rolled into IRA's.

Yeah I have always rolled my 401k into an IRA @ vanguard after any job change as well.

 

[boomerang]

But Obamacare is going to help with all this by freeing these people up to pursue their dreams. They'll be able to retire, work less or not at all. This has all been scienced out by our kind and benevolent government and because of that, nothing can go wrong. What, me worry?

And pay no attention to this:

A 'tsunami' of store closings expected to hit retail

 

[Genx87]

What we had before but traded for 401ks were pensions.



"Traded" is probably not the best word since it implies workers were given an option.

Pensions were ok provided they were fully funded. Well that didn't happen, not even on the public side.

 

[Jhhnn]

I'm surprised they are as high as they are. Between folks pulling money out to weather the bursting of the housing bubble and the Baby Boomers being the Grasshopper Generation I would have guessed the average for folks near retirement age would have been much lower. One thing to keep in mind is that the values provided are for folks who have any 401(k) savings.

~40% of workers have no 401K access, and some of those who do pass up free money, don't participate. Many will exist on SS & whatever else they're eligible to receive.