It seems as if every financial services company in the world conducts its own retirement survey and each one is more depressing than the last.
The most recent one I've seen comes from Wells Fargo, which says that most Americans in their 50s should be prepared to live on $190 a month, because that's all the personal saving they'll have to look forward to.
Now, granted, the survey didn't take into consideration social security or possible pensions, which are becoming extremely rare these days.
But the point is clear. Wake up America or be prepared to spend your retirement years living in a van down by the river, as the late great comedian Chris Farley used to say.
The Wells Fargo survey polled some 2,000 middle-class Americans ranging from 20 to 60 years old, and guess what? Like all the other surveys, it too found they not only aren't saving enough for retirement, but they're also underestimating the amount of money they'll need in retirement, which means they're more likely to end up working in retirement instead of playing golf all day or traveling around the world on some cruise ship.
According to the survey, most Americans predict they'll need a nest egg of $300,000 to live on for 19 years in retirement. Even that's a little low, considering we'll probably live closer to 25 or 30 years more after we stop working. Still, the average savings of 50-somethings is only $29,000, and that comes out to an income of $190 a month over 20 years, assuming you're able to get a 5% rate of return.
Laurie Nordquist, co-head of Wells Fargo Institutional Retirement and Trust, said the survey reinforces the huge gap in terms of what people are going to need and what people have and the shortfall is huge. She added that even with Social Security or other sources of income, most people are not going to be able to cover basic needs with such a small amount of money.
Now, you'd probably think that the recession is to blame for this lack of retirement savings. But you'd be wrong. The Wells Fargo study found that this problem has been going on for many years and that people didn't save any more before the recession than they do now.
Who's to blame?
So where should we place the blame? How about on our ability to live in complete denial? According to the survey, only one in three (33%) of Americans have a detailed written retirement plan. Meanwhile, another 37% don't even know how much they'll need in retirement or how long they will be able to live on what they have saved.
You would think that the last two years of would have shaken most of us out of our financial daze, but for some reason, we still avoid what those AXA Equitable TV commercials tell us is the 800 pound gorilla in the room. Is it because we just feel so helpless to do anything about it?
I know that's how I used to feel seeing those ING commercials with people walking around carrying signs with their six and seven figure numbers on them. How could I ever save that much for retirement? I just assumed years ago that I'd probably work till I died, which is fine for me because I love what I do.
Still, I'm sure there are some of you out there who thought you might be able to retire. But when are you going to realize you need to take the time you have left to start making up that shortfall and create a retirement plan? Otherwise, you could very easily find yourself working through your retirement too, which more and more Americans say they're doing anyway.
The survey found that seven out of every ten (72%) Americans now expect to work through retirement. But to be fair, only 39% say they'll work because they have to, and the other 33% claim they're going to work because they want to. Isn't that nice?
I don't know about you, but I've already picked out my spot down by the river. Now I just have to find myself a nice van.
