One in five Americans dies broke.

A University Michigan study on health and retirement indicates that 20% of Americans age 85 or older died without any assets other than a house.  One in eight (12%) didn’t even have a house and one in ten (10%) died owing money.

It’s the biggest financial worry for anyone saving for retirement: will I outlive my savings and die broke?  Based on surveys repeatedly pointing to dismally low levels of retirement savings, most American households have reason to be concerned.

While my opinion is not based on a survey, but on experience, I believe that this problem is not based on lack of earnings but on other factors.  I would like to highlight two of them.

One of those factors is that many people place saving for retirement low on their order of priority.  There are always other things that seem to be more interesting, or fulfilling, than putting money away for a far distant future.  Earlier generations had less of a social safety net and were more future oriented.  They knew that they had to take care of themselves as they got older or move in with their children.  The government programs that have been put in place over the last 85 years have made the specter of destitution at old age seem less dire.

A second factor is lack of knowledge.  Far too many middle-income income people are either unaware, or afraid, of the traditional ways people have accumulated money for retirement.  Many a family gathering will include a fair number of people who believe that an IRA is something you do with a bank.  Others will tell you that investing is gambling and are deathly afraid of anything having to do with stocks, bonds or mutual funds.

For many retirees, the end of life comes with major medical costs that can wipe out savings.  But others have little savings to begin with.  “Many more people who have very low financial assets at the end of life have been bumping along with low assets through most of their retirement,” he said.  “They just hadn’t saved very much.”

That brings us to Baby Boomers who are either retired or rapidly approaching retirement age.  Recent data shows that 40% have not saved anything and over 20% have less than $100,000 saved.

People in this situation need professional help.  They are not going to make it on their own.  They really need to seek out an advisor, preferably an RIA, who will take them under their wing, educate them, and be willing to work with them before it’s too late.

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