Stateside
9:00 pm
Wed August 27, 2014

More than a third of Americans don't have enough money saved for retirement, survey finds

Credit Steve Carmody / Michigan Radio

About 36% of Americans aren't financially prepared for their retirement, according to a recent survey by Bankrate.com.

Detroit News personal finance writer Brian O’Connor said the number isn't that surprising, given what's happened in the last several years.

“A lot of people wound up having to raid their retirements. A lot of people got nervous and took their money out of retirement accounts when the stock market fell,” O’Connor said.

O’Connor added that there are people living paycheck-to-paycheck, with wages not keeping pace with inflation. Although jobs are coming back to Michigan, those jobs aren't paying what they used to.

The survey found 69% percent of younger Americans between ages 18 and 29 don’t have anything saved. That’s understandable, because they have student loans, are trying set up households, and are getting businesses launched.

However, the 14% of people aged 65 and older with no savings are in a tight spot. These people may have had a financial crisis – a divorce, bankruptcy, medical issues, etc.

“It’s going to be a serious, serious problem,” O’Connor said.

O’Connor said one of the reasons that people aren’t saving is that there are relying on their pensions. But as we have seen in the Detroit bankruptcy, pensions are not always guaranteed.

“When it comes to retirement security, we are in a situation that is just like health care,” he said.

O’Connor said it’s become too easy to lose it all.

O’Connor said it’s never too early to start saving, and opening a 401(k) plan can be useful.

*Listen to the full interview with Brian O’Connor above. More on his latest book, "The $1,000 Challenge: How One Family Slashed Its Budget Without Moving Under a Bridge or Living on Government Cheese," can be found here