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The Retirement Lie Part 1 // Media, Social Norms and the Problem with “Average”

A quick request before we dive in today, and I promise we’ll only ask this one time. We’d be honored if you’d consider nominating us for the Plutus Awards. Last year we were finalists in the Retirement Blog category, which pretty much made our year. This year, we’re eyeing the much more competitive Financial Independence Blog category, and we’d love your support making the finals. We don’t do this for money, but you know we won’t turn down gold stars. :-) Thanks for considering! (And for those of you who write your own blogs, you can nominate yourself! We know we’ll be nominating lots of you!)

New Series: The Retirement Lie

Today we’re kicking off a new periodic series called The Retirement Lie. We recognize every day how lucky/fortunate/privileged/rare we are for being able to pursue early retirement, primarily because we also recognize that just being able to retire at all is becoming increasingly unlikely for a large majority of people in the U.S. especially. And sure, some of the fundamental problems that pop up again and again in personal finance discussions apply here: It’s more fun to spend money than to save it, people get caught in the consumerism trap, health care costs eat up a lot of people’s savings, etc., etc., etc.

But we think there are other forces at work that are keeping people from being able to retire confidently and securely, and we’re going to dive into them in this series.

Last year, we wrote our first ever Rockstar-featured post on how retirement calculators don’t factor in the whole picture, lamenting that most calculators would only factor how much we need to save based on how much we earn, not how much we spend. That post featured this laughable nugget, straight from the USAA calculator:

OurNextLife.com // The Retirement Lie // How media and the financial services industry keep people from saving and retiring

As if there’s some world in which we could ever possibly “need” $16,000 per month. But the bigger issue is that, if we actually listened to this calculator, we might never retire. We certainly wouldn’t retire next year! And why shouldn’t we listen to this seemingly credible advice? It’s from a financial institution that we trust, one that’s not even a for-profit company! Surely that’s worth listening to! We’ll go deep into the motivations of the financial services industry in a future installment of the series.

But today, for the first post in the series, let’s take a look at the media, and how they report on retirement preparedness.

OurNextLife.com // The Retirement Lie Part 1 // Media, Social Norms and the Problem with "Average" -- Media report on undersaving for retirement like it's normal, not a crisis. This has to change.

Reporting On Retirement Savings

If you’re not just crawling out from under a rock for the first time, headlines like these will look familiar:

OurNextLife.com // The Retirement Lie // Media coverage of retirement savings focus on how normal it is not to have enough saved, rather than characterizing it as a catastrophe. These stories are technically factually correct: Americans are not saving enough for retirement, pretty much across all age groups. And though these stories seldom report ethnic and racial disparities, focusing mainly on generational ones, the situation is even more bleak for people of color.

The problem: These stories paint undersaving for retirement as entirely normal, not as an emergency that needs dealing with right this very second.

In that last headline from CNBC, check out the subhead. “Short on savings? You’re not alone.” It sounds like some frivolous headline in any magazine. Struggle to keep your house tidy? You’re not alone! Or like it’s giving you a pat on the arm and saying, “It’s okay. We’re all in the same situation.” Implication: What we’re all doing is fine, not a cause for massive alarm.

Even worse are the stories that characterize retirement undersaving in terms of “average”:


“Average” sounds a whole lot like a C, which is a passing grade. But how much does the “average” American have saved for retirement? That would be a whopping $10,000. Having $10,000 saved for retirement is not passing, it’s not even “barely failing.” It’s holy-crap-millions-of-people-are-in-trouble-and-we-need-to-do-something-about-it-NOW. It’s a major fail that will affect all of us, not just retirees who run out of money, because everything is interconnected in the economy. Framing this story as “Do you have as much as the average?” tells people, hey, as long as you have more than $10,000 saved, you must be doing pretty well. You’re above average!

“Average” and “Normal” Create the Wrong Social Norms

Telling people they’re not alone gives a false and dangerous sense of security. We’re in this together! (Sounds nice, right?) Telling us we’re “normal,” “average” or even “above average” all contribute to this same feeling: that we don’t need to have a major reckoning as a society, and either help incentivize people to save more or beef up Social Security. And that we as individuals aren’t in trouble because we’re just doing what everyone else is doing.

These are lies. If not outright ones, at least lies of omission.

If the average grade is failing, then we can’t measure ourselves against average. What these stories seldom mention is that the odds say that most people will run out of money in retirement. Run out of money. That more than 80 percent of Boomers and Gen Xers in the bottom income quartile will run out of money in retirement. Again, run out of money. That even a quarter of people in the top half of the income distribution will run out. Maybe that doesn’t seem so dire because we have Social Security as a safety net, but Social Security was never meant to replace an entire income or provide for all of a retired person’s needs — it’s meant as a supplement.

The Stories That Need to Be Told

What if, instead of making us all feel deeply normal and average (or even above average) for undersaving, the headlines were more like:

Bottom Half of Savers Will Get Eaten By Giant Space Monsters

Then being middle of the pack wouldn’t feel so acceptable, so shrug-worthy. You can bet everyone would be working a lot harder to find ways not to fall into that bottom half, or even to risk sitting somewhere in that average middle. People would be demanding policy solutions to help, and an expansion of space monster protection programs. The social norm would be for everyone to save today, not put it off til later, because the threat would feel a lot more immediate, instead of this far-off nebulous thing like retirement.

It’s an extreme example of course, and I’m not actually advocating for sensationalism in journalism. Just a more truthful set of headlines. For starters, cutting out any mention of average and stopping the language meant to comfort us. (“You’re not alone.” Journalists who write that might as well bust out in a cover of James Taylor’s “You’ve Got a Friend.”)

Applying the Lessons of the FIRE Community

There are a massive number of problems contributing to the undersaving situation — it’s not all people sitting around spending their money on frivolous consumer goods and piling up credit card debt. Minimum wage in America doesn’t even pay people enough to be above the poverty line. We don’t provide enough child care to low-income workers. Many people are priced out of college. There is systemic racism, sexism, classism. All of these and countless others are very real barriers to climbing the ladder to a comfortable existence where saving is even possible.

But, words matter too. The narratives we hear and the stories we tell ourselves have a powerful effect on our beliefs and behaviors. And for those who are able to save but don’t save enough, the FIRE community is a perfect example of what’s possible when you realize that your old narratives were wrong.

That’s why the headlines reporters and editors write matter a whole heck of a lot more than they might believe. They are driving a skewed narrative right now, which is both giving people comfort that they’re not alone in undersaving, while also failing to show people what is possible. By slouching toward average, we’re missing a huge opportunity to show people that it takes far less saving per month to retire securely than they might imagine, even if they’re getting a late start.

Your Voice Is So Important

The FIRE blog community is a great example of how quickly we can change minds and behaviors when we shift the narrative and show what’s possible. So to all of you out there telling this story on your blogs, keep it up. And to the non-bloggers, you’re not voiceless. When you hear your friends and family mention how hard it is to save, help them see that small changes can lead to big savings. Flip the script to show them that secure retirement is in reach for many people who don’t imagine that they’ll ever be able to stop working. This community isn’t mainstream yet, but we’re picking up steam every day, and we can all make a difference together if we keep beating that drum.

How Else Can We Change the Narrative?

Please tell us in the comments: What else can our community do to help change the social norms around retirement savings? What else can we do as individuals to inspire those around us? Let’s discuss!

Closing note: If you haven’t already read it, please go over to The Resume Gap and read Matt’s latest post: Our Frugality Is a Sham. Matt is consistently turning out phenomenally thoughtful content, and this latest one is perhaps his best yet. A must-read for all of us.


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85 replies »

  1. Nice thought provoking post. It’s definitely scary when you read things like people having nothing for retirement. Particularly when you consider that state retirement ages are going up, and the state pension is actually so small you wonder what the point is! It wouldn’t surprise me if by the time I reach, what is considered the ‘average’ retirement age, it doesn’t exist. Definitely incentive to ensure I’m much better than ‘average’ or ‘normal’.

    • Thanks, Elliot! And yeah, if you needed an incentive to be above average, I hope some of those stats provided it! :-) Sobering stuff. Without major advances in medicine, I don’t see people being able to work much later than they already do, so we’ll still need a safety net for people who can’t work anymore. There are exceptions, of course, and people who work into their 80s, but they are not the norm.

  2. The retirement savings crisis is real – neither mine nor my husband’s parents have any savings to speak of, which is just as scary for us as it is for them.

    Advocating for personal finance classes at all levels of public education is a good start. My kiddo starts kindergarten next month, and I’m already advocating for financial basics to become part of the math curriculum.

    I’d also say that sharing stories and PF basics with friends and family – starting small until they’re ready to absorb more – is powerful. We are often more influential than we know with those we love, and may have a more significant impact than we’d imagined.

  3. The retirement savings crisis is real – neither mine nor my husband’s parents have any savings to speak of, which is just as scary for us as it is for them.

    Advocating for personal finance classes at all levels of public education is a good start. My kiddo starts kindergarten next month, and I’m already advocating for financial basics to become part of the math curriculum.

    I’d also say that sharing stories and PF basics with friends and family – starting small until they’re ready to absorb more – is powerful. We are often more influential than we know with those we love, and may have a more significant impact than we’d imagined.

    • That IS scary! Have you talked with your parents and PILs about their plans? I wonder if they expect you to support them one day… better to know this sooner than later! Agree with you completely about financial literacy in schools. Math class would be such a natural fit for it, and might actually get more kids interested in math. Can you imagine if teachers said, “Alright, kids, this is math, but really it’s about how to make more money!” Haha. Keep spreading the good word with friends and family! I’m convinced that’s how we’ll start to have a broader influence!

  4. I’m working on all my friends and family, but chances are high I’ll support some family members as they get older. I hope not, but my sister hasn’t had a job with access to a 401k. Ever. And she’s 36!

    • Sorry you’re in that situation with family members, but we can relate! Most of our relatives have their finances in order, but we know we might need to help one in particular, and possibly a second.

  5. Wonderfully thorough analysis, as always. I am excited for the rest of the series.

    It does seem like most of the coverage is very much in the vein of “Everything is hopeless, so don’t even bother.” Ultimately we probably do need some sort of policy push that either incentivizes individual saving or expands social security (or both!) like you said, it does need to start with people recognizing that there is a problem and that problem is solvable.

    • Thanks, Matt! :-) That’s the sense that we get, that you come away from these stories thinking, “Why bother?” And what’s frustrating is it doesn’t have to be that way. With a different narrative, people could be inspired and motivated to save more. I agree that we need policy action in a big way, but we also need to get to a place in the national dialogue where we move on from this helpful feeling and focus on realistic solutions.

  6. The retirement crisis worries me greatly. Not having enough to live on when you are no longer able to work whether through disability or job-loss is terrifying. I spent the first part of my life actually starving due to my parent’s poor financial choices. It was truly awful. I wouldn’t wish that on anyone.

    You’re right. This is why I hate it when people congratulate me on being slightly better than average (my investments have just hit this tiny milestone). I don’t want to be better than the person next door. I want to be safe. I want him safe too. Desperate people make desperate choices. A whole country of desperate retirees is not good.

    I’m short on solutions though. I increased my income to make it easier to save and opened a business that gave me enormous tax write offs. These are not possible for everyone and take a lot of energy and talent. I wonder if fully funding head start (the programs for pre-school), which are proven to prevent later criminality, would be helpful here. Children who are prepared for school can learn more easily.

    • Wow, what a rough start you had! That just speaks so much to your resiliency and strength that you’ve gotten yourself where you are today.

      I don’t think there’s any harm in accepting congratulations for hitting milestones, even little ones — so long as you keep your eyes on the bigger goals of full safety and security. And you’re doing exactly that.

      I definitely think fully funded Head Start would be a big positive — both to help kids get off on the right foot, and to provide better childcare options for more working families!

  7. I appreciate this post and the thought that went into it. I have a number of friends who are empty nesters, who are not going to be able to retire by 65. It’s shocking to me, steeped in the FI community, to realize that’s normal! Which just goes to show that normal can shift when we hear a different narrative all the time. I am heading over to Matt’s post, and looking forward to the financial industries topic in this series!

    • Thanks, Kalie! :-) We have similar friends — especially the ones who spent so much on their kids and kids’ college over the years and left nothing for themselves… which means the burden will ultimately fall to their kids! Kind of ironic, isn’t it?

  8. Thanks for putting this post together!

    We have very similar thoughts on the “average household” articles. Your point about the titles is spot on – retirement savings aren’t graded on a curve, if the average is an F- then you get an F-

    I hope our community moves into the mainstream – maybe we need one of those reality shows to move the needle :)

    • You’re welcome! :-) And yeah, the average right now is definitely an F-, not a C, and we’ve got to change that narrative! And I love your reality show idea! I think you should pitch something. :-)

  9. My brother was my first leader to this thing called FIRE – so following him and the PF blogs have just cleared the path for us. Talking about money is just a “taboo” topic for so many people and their families and friends. I totally agree with your part about the headlines making people think they “fit the norm” if they aren’t really saving. I think one thing we’ll have to continue to fight is the idea that the PF/FIRE communities are just another “scheme”. Many folks with money troubles have been “taken” before and are wary of those who talk about how easy it can be to right a wrong path. (Not that folks say it is easy in terms of the work & discipline) – just that it isn’t nearly as difficult as people think to make change. Stepping out and saying I have reached “FI” to my friends and going more public with my blog is how I hope to start influencing others.

    • Yeah, the media should not be comforting people for being unprepared, they should be getting people to take action! The “scheme” point about FIRE is one I hadn’t thought about before — I guess anything that feels like it’s too good to be true could fall into that. I’m glad you’re sharing your story more openly and vocally now! If more of us do that, we have to start chipping away at these wrong and pervasive ideas that are out there!

  10. Oh, the retirement crisis. The meteor headed towards earth, ready to take out most Americans and people view it as inevitable so they don’t do anything about it. I spend way too much time thinking about this. What will actually happen when all the lemmings jump off the cliff? How will society cope? How can we take care of that many people who didn’t/couldn’t plan for this?
    On the flip of those article headlines, I have found it difficult to find an appropriate measuring stick. The media above pats me on the back for being above average. Typical metrics (1x/3x etc salary by a certain age) are frustrating when you get a late start due to being in school forever and then having to pay for it. Even the money and FIRE bloggers who put out ranges often assume you had it figured out from the beginning and began maxing your 401k at 22. People like measuring sticks, but maybe there isn’t one for this other than simply Save More.
    I’ve tried to lead by example and show how you can live on less. I’ve had a few follow my lead.

    • I think it’s awesome that, in leading by example, you’re getting folks to follow you! Wohoo!!

      I don’t actually have an opinion on the retirement crisis. I don’t know if it will materialize or not, and maybe people will find a way to make ends meet on Social Security alone. But I don’t think the media are doing any of us any favors in how they talk about this stuff, and the odd set of demotivations and disincentives they put out there. I hear you on feeling like you got a late start, but you know you’re going to make up for that lost time very soon if you haven’t already.

    • Please do come back! And oh god yes re: the clickbait! Forget the retirement crisis — it’s the clickbait crisis that’s actually affecting my life. Haha.

  11. I think the issue is the worst case scenario for our parents isn’t that bad. (Get ready for a big generalization) Our generations’ parents will collect over $2,000 a month in social security as a couple most likely. Layer that in with some pensions from old jobs, or government/military work, and it’s definitely manageable as long as you paid off your house. Our parents got married much younger so figure in 40 years they have paid of their mortgages (hopefully). The crisis for them isn’t really there…

    Now the issue is what happens when OUR generation gets to retirement. Well there is a good chance SS benefits will be less than they were for our parents and defined benefit plans are almost all but forgotten (with the exception of union and gov’t workers). I think it’ll be our generations kids who are the ones who get scared stiff into saving for retirement as their parents won’t be able to support themselves without a decent sized nest egg. Your concerns are real, but I think it’ll take a generation really struggling to support themselves in retirement to scare the younger generations into saving.

    • I think the “as long as you pay off your house” caveat is a huge one, and is also not the norm. My mom is 62 and still taking on new debt, so no paid off houses in her near-term future, even though she has very few working years ahead of her. And I don’t think she’s so rare! So I think the crisis isn’t there for people with paid off homes, but that’s not the majority of people.

      Totally agree with you on our generations (X and millennials) — very few pensions, who knows what will happen with SS, etc. (And most govt employees these days don’t get pensions — they have 403bs like most people’s 401ks.)

      • Interesting. Maybe I’m just naive to the issue. Curious how much of a role do you have in your parent’s financial life? I’ve tried to grow mine and they’ve been very receptive.

      • Very involved in one, getting more involved with the other. Of course there are people at everything spot on the spectrum, but my sense from news stories is that it’s not common for people of *any* age to have a paid off home. Maybe that was the norm 50 years ago, but not in the “upsize every chance you get” culture that we have now.

  12. I think the best thing you can do is lead by example. I’ve had many friends tell me since they’ve read my blog they have done something better with their finances. In fact, a girl who I saw at my Aunt’s funeral kept going on an on about digit and how she really loves it and found it because of me. If people don’t want to change, they won’t.

    • That’s SO AWESOME that you’ve been able to make a difference among your friends! That is the drawback of an anonymous blog — very few of our friends read! :-)

  13. The lack of personal finance knowledge among the general public is astounding. Even at financial services firms like where I work, people have great intentions, but their thought processes never push the boundaries toward FI, at least not sooner than typical retirement age. It is so frustrating. It’s almost as if the system doesn’t want the light bulb to turn on.

    You know I try to spread the word and I’m happy to have gotten my brother on the path to FI. Hopefully I can convert some more soon.

    Looking forward to the rest of this series!

    • The system not wanting the lightbulb to turn on is a subject for another post in this series! :-) I love that you spread the word and that you recruited your brother (haha, that sounds like this is a cult!). Keep spreading the good word! Soon you’ll have an international audience! :-)

  14. The best place to start with education around finances and retirement is ironically at the very opposite end of the spectrum. With our children. That needs to come from the parents and our schools, woking in tandem. Education early becomes habits if done correctly. Good habits lead to an alternative lifestyle. Alternative lifestyle leads to increased savings and from there it becomes easier to build a plan for a financially comfortable (not opulent) future.

    What will not work is bailing people out with Social Security. Just look at what is happening with in the UK with their former old, tried and very expansive (also expensive) pension system. It is a disaster and becoming a nightmare. We can learn something from that experience. I actually don’t know of any country that has a great government pension system that is not crippling in some form. Other readers might like to comment here.

    • Couldn’t agree with you more that we need to rethink how we teach kids about money! I remember having one class in high school that was essentially how to balance a checkbook, but that was it. Why don’t math classes, when teaching about things like statistics and compound interest, use more money examples? And why don’t we do financial literacy for younger children? We need to change all of it.

      We have less of a bleak view on Social Security, but it is clear that too many people rely on it and then get a shocking wake-up call when they realize how little it is to live on. We need to do SOMETHING to make sure that more people are prepared for their later years!

  15. There is also the issue of mean vs. median. The average retirement saving is usually higher than the median, simply because there is a small minority of people with high savings rates and high net worth (many around here fall into that category). But the median can be much lower. I think the number you mentioned above $10,000 is the median, the mean is closer to $100,000 for retirement savings. Either way not a pretty picture.
    Another contributor to bad savings discipline is what I call the diet pill effect: People see on TV that it’s OK to be overweight, because you can deal with the problem later by taking some miracle pill. Same in personal finance: A lot of people I know have the attitude that they will seriously start saving for retirement at age 50(-ish?), buy all the books written by the financial gurus you see on TV and miraculously have a comfortable retirement.

    • Yeah, the $10,000 is the median, and you’re right that the mean is skewed by high earners. But given that median measures the total number of households, I think that’s a fair measure here. And yeah, I do think people put off saving and assume it’s something they can do “one day,” but by the time that day comes, the habit of not saving is far too ingrained.

  16. I chased normal (aka “average”) for a very long time and it took me pretty far down the wrong path. Now, I look at what everyone else is doing with objectivity. I strive not to be normal or average, and feel grateful for learning that there are other options. This call to arms is awesome and necessary. I think it’s up to us bloggers to spread the word about making better goals and the importance of saving.

    And, LOL about the giant space monsters.

    • Maybe the next post in the series will be called “Return of the Giant Space Monsters.” Haha. I love how you put it: striving not to be normal or average (except in investment returns, of course). And let’s keep spreading the word! We’ve been starting to think about how we can do that outside the PF space, to start reaching more people!

  17. Thanks for another solid post. Here are my thoughts:

    1. Fix yourself first. As the airlines tell us before each flight – get your own situation sorted out, then help those around you.
    2. If you’re on the right path – keep moving. You’ll get run over if you just sit there
    3. Talk to people about money. Make it a conversation topic at work, dinner, reunions. Many are ashamed of their situation because of the articles you mentioned. Open the door just a crack and they’ll start talking. They always do.
    4. Keep talking. Simple conversations will turn into more substantial conversations.
    5. Share the knowledge. Share links on your personal social accounts. Too often in the FI community we’re in an echo chamber. Preaching to the choir. Share this info in your personal world as well – I think it will do far more good, and will also help expand the FI community.

    • So totally agree that we all need to talk about money more. I am constantly talking to strangers on planes about it, and also talking in gentler ways to colleagues and friends. And I find the same thing — most people are happy to talk about it! Because yeah, otherwise we’re just preaching to the choir here, but the goal is to get the message out to the unconverted. :-)

  18. This topic is a frequent talking point for Mr. AR and I, particularly as it relates to our adult children. Chasing fancy cars and pricey homes and expensive vacations is learned behavior (unfortunately, learned from us). It took years for us to wake up and realize we would never be free of the financial bondage of debt and consumption without a radical change in our attitudes. I hate to see our mistakes repeated in our children, but I do understand. We use every opportunity to discuss money, budgeting, savings and finance, but it typically falls on deaf ears. I have no solution (I wish I did); moving away from the expensive Bay Area helped us tremendously, but we don’t get up and go to work, and they do. The pressures are immense, and living for today sounds great when you’re surrounded by countless shiny things you’ve been programmed to think you can’t live without. I don’t know what the answer is, but I’m hopeful the culture will change with time.

    • That’s so interesting — I haven’t seen you talk about this before, the habits of your kids and how you influenced them. I’m impressed that you can admit to yourself that they learned some of it from you — that kind of self reflection is hard for most people! It’s great you keep talking to them about money, and I do think some things in society are shifting — the movements toward minimalism, tiny homes, etc., may be a bit extreme in some cases, but they’re all emphasizing the push toward recognizing what is “enough.”

  19. Our society has gotten to its current place through numerous actions and inactions by many actors including individuals, businesses, and government entities. In regard to personal finance matters the problem and the solutions lie with actors, the federal and state government, the private sector, and individuals. I prefer to tackle these problems as a twofold approach. Items in my control, I work to change, and items outside my control I either advocate for improvement or do not worry about. I actively research and increase my knowledge of said topic so I can be informed in deciding what is in my control and not.

    I have found it very empowering to get a stronger hold of my life by controlling my finances. How much I spent cannot be blamed on others, I am solely responsible. As a result, how much I save and invest is also in my control. How much I earn is partially in my control. How much I pay in taxes is partially in my control. How many days I go skiing is in my control.

    I disagree with the some of the media’s message that individuals cannot control their lives and make their own decisions. This seems ripe in the Personal Finance/Retirement arena.

    The idea you highlighted about being compared to average is interesting. Sometimes I strive to be average (i.e. investing in index funds), other times average is not helpful (i.e. US retirement nest egg size you mention), lastly the comparison could be irrelevant (e.g. the average salary worldwide). The most useful comparison for retirement is the relative size of net worth and annual (or monthly) spending (as the FIRE world knows so well).

    In my family we share medical and financial information fairly openly. My understanding is, this is not normal. I have found it very helpful to be informed of the medical challenges and checkups my parents are encountering. I also have found it very helpful to understand the financial situation of my parents (I am reassured they are in a stable financial situation while in retirement). My brother and I talk about money and provide each other our opinions. My significant other and I are actively working to be more comfortable talking about money. I provide mostly gentle advice to friends and even coworkers that I think would be more receptive to my thoughts. Ironically, it was a coworker who opened me to the FIRE world by recommending MMM – and I am forever improved because of it.

    Best of luck on the Plutus Awards. I enjoy your blog and keep up the great work spreading happiness.

    • So true that “average” means something different in every context. We also strive for average with our investing, and are all about the index funds. But being average in retirement savings? That’s downright terrifying!

      I LOVE that you and your family are so open about both money and health issues. That’s so important — but so rare! We have a pretty decent sense with our parents, too, and that gives me a big sense of relief. One of the four parents isn’t doing so great, but at least we know that and it won’t be some future surprise that we may have to provide future support in some way (hoping it’s moral support, not financial support!). And thanks for the well wishes on Plutus! :-)

  20. So you’re saying that retirement doesn’t grade on a curve? Bummer.

    I’m actually lucky to be changing careers because it woke me up to long-term financial planning, as in “how long until I can quit the job I don’t like and start one I love for less money.” People who happily plod along without major life changes can look up 10 or 20 years later and find themselves in a bad situation because they’ve never thought about retirement much.

    • Maybe it grades on too much of a curve — but then those grades are irrelevant in real life. :-) Such a good point that major life changes have a way of bringing some of those choices to life more than if we just keep going the same path without thinking about it. I’m glad your big pivot opened up the door to thinking about this stuff more!

  21. I am of the opinion that if you want people to exhibit a certain set of behaviors, then you need to make it easier for them to do so than to not. So if you want more people to have greater retirement savings, push for expansion of social security and legislation such that workers are auto-enrolled in 10-15% 401k contributions by default (or better yet get rid of 401ks altogether and raise the cap on IRA contributions).

    • I don’t want to get rid of 401ks because of employer matches! Haha. But yeah, couldn’t agree more that we need better policy solutions to make more savings automatic, and maybe even to get matching funds from the government. Some states are starting to talk about systems like this.

      • It’s funny, but we already do get matching funds from the government. Both indirectyl in the form of tax deductability for 401k-type contributions and directly in the retirement savings contribution credit. These are eliminated for higher income folks, but then they shouldn’t need the help…

      • Good reminder! We’re in the camp of not getting tax breaks for retirement savings, so we still like getting that employer match, though! :-)

  22. You keep upping your blog post game; this is high-stakes stuff! Great discussion-starter.

    I agree with Fervent’s point that this will likely become more and more of an issue for the younger generations, who are unlikely to have the same level of Social Security retirement benefits in their elder years. I suspect we’ll see the minimum age for benefits rise, and perhaps more people working into their sixties, seventies, and beyond as a result.

    It’s hard to know where to begin on changing such a massive cultural norm. People don’t like to read bad news about their futures, and it’s particularly challenging to get people thinking about what feels like an eternity away: 30, 40, or 50 years from now.

    I like to think that this online community is helping to start the movement. Ten years ago, I rarely came across anything beyond generic Personal Finance 101-type advice; these days, major publications seem to be writing frequently about people saving aggressively and choosing different paths. Everyone who writes about the positive experiences they’ve had as a result of saving — or reads, comments, and shares — helps a bit. Maybe financial institutions like USAA will eventually get a clue and update their ridiculous calculators accordingly.

    Financial education could use some improvements, and I wonder if that’s the best opportunity — getting to people before they’re deeply in debt, practicing bad habits, and living inflated lifestyles. I’ve considered looking for opportunities to do basic personal finance teaching with high schoolers and even college students. Maybe sometime in the next few years. I’ve occasionally seen billboards and TV ads preaching basic personal finance skills from an organization called Feed the Pig, but I find their messaging to be pretty weak. Hey, at least someone’s trying.

    Thanks for the kind words and links, by the way! You have our votes for the Plutus!

    • Thanks, Matt! :-) I hope, at a minimum, that people’s health and longevity keep improving, because you know the stats on this stuff — people *intend* to work until 67, but most have to quit around 62. That five year gap could be a BFD in finances, or could lead people to claim their SS early, leading to lower benefits over time. So if Gen X and millennials aren’t saving adequately and are facing a system where they (we) can’t get SS until 70 or higher, what happens if we still can’t work past our mid-60s? Scary to consider.

      I agree with you that the PF stuff we all discuss every day here is starting to get more mainstream — hoping that trend continues!

      The retirement calculators and all the terrible retirement savings ads the financial services industry runs — that’s a post for another day. :-)

      And yeah, Feed the Pig. A waste of ad dollars, I think, though I appreciate the sentiment behind it. I do think financial literacy at all ages and levels is desperately needed. For a culture as money-obsessed as ours, you’d think it would be a no brainer!

      Thanks so much for the Plutus vote. I voted for you earlier today! :-)

  23. The future retirement crisis is what motivated me to get started in personal finance :)
    The savings rate of americans went from 12% in 1970s to 5% these days. So starting roughly in 2010, people retiring will have less and less to live off in retirement or will have to work longer. Because Social Security represents 30% of retirees income today, it is rises to 60% that’s going to be a major issue for everyone.
    My plan is to not have to count on SS and have enough money to pay the increased taxes we will inevitably have to pay.
    How do we pass the message to the larger population? Get a TV show to talk about it seriously? Get kids at school to get the basics?
    The PF community does a great job already, it’s only a matter of time before MMM ends up on national television :)

    • It makes me wonder — are those folks who saved 12% in the 70s the same people who now don’t have enough saved retirement? Because then that’s extra terrifying!

      We’re like you in not planning on needing or receiving SS, and maybe it will be gravy. Enough people have suggested it to make me think we need to make this a thing: FIRE the TV Show. :-)

      • The folks who retired in the 70s/80s had 10%+ savings rate and retired in a 20year bull market. They had optimal conditions. Those retiring now have gone through two market crashes and probably saved 7% average. That’s not optimal and we see they aren’t doing well. The folks that’ll retire starting in 2040 could have even less savings if nothing changes.
        A FIRE TV show/YouTube channel would indeed be the best way to communicate to vast audiences. I’d be 100% supportive of such a project !

      • I love the idea of a FIRE YouTube channel, but my plate is a little full at the moment. :-) Maybe when we quit in a year/year and a half. ;-) But feel free to run with the idea in the meantime if you feel inspired!

  24. I have only recently really started to think about retirement (I’ve been saving, but my main concern has been escaping the cycle of damp, mouldy rentals and buying my own home – now that’s achieved I feel I can focus more on retirement). At the same time I am also learning more about retirement policy and population changes through my day job, and it’s a bit of a scary prospect.

    I haven’t really used that many retirement calculators (in fact only the one created by my organisation) and it DOES take into account spending as well as earning (if you mean spending in retirement, that is). The difficulty is knowing how much you actually need in retirement – I find that’s where most people get tripped up. It’s so far away, inflation is confusing, it all feels so hard, etc. That’s the eternal question we see – ‘how much do I need?’ And the challenge is getting people to engage and take it seriously, but without terrifying them and turning them off the topic entirely.

    • I agree big time — it IS a lot to try to process and take in. On a basic level, we just need people to save more, regardless of all the rest. And making them feel like no one’s saving so it’s normal and okay not to save is not helping the problem. But in your case I’m glad you found a calculator that does take into account spending! That’s so rare!

  25. I’m very intrigued about how you will continue this post series, it’s got a fantastic title too.

    You have hit the nail on the head when it comes to news articles and anything else that makes not having retirement savings sound “normal” – everyone wants validation, justification, if everyone else “isn’t doing it” then it’s ok we’re not! (big nope) It’s basically “keeping up with the Jones'” – but instead of turning to your neighbour to fit in with “how much” you have, it’s fitting in with how little.


    • Thanks, Jasmin! And what a great way to put it: fitting in with “how little.” (What a horrifying thought!) We do need to stop validating the wrong behaviors and instead focus on creating incentives and positive reinforcement for the good ones!

  26. I saw this in in my dad’s retirement and am watching my mom’s non-planning for her retirement take shape, as well as my brother lamenting, “I’ll never be able to retire” even though he has a good job, some sort of 401k and enough money to save extra if he wanted to. My sister, ha, she will continue to be a financial ward of the government and live off of all of us – grumble, grumble, grumble…

    I remember when my dad passed, he gave his whole retirement savings he’d been living off of to my older sister, and I was shocked and kind of sad when I realized it was only $80k. $80k!! He retired at 49 after 33 years with the phone company and got a buyout for his pension and it only turned into that amount? I think he was expecting the pension to be better or something because he never saved extra, and had a tough go of making ends meet. He had part time jobs here and there , but essentially had to drastically reduce his lifestyle to accomodate his budget.

    I think a big way to make a difference is talking about money with people. At this job alone, I’ve ended up passing along lots of links to Personal Capitol, boglehead forums and the like and some of the people have actually started tracking their spending!
    One person and I discussed paying down debt and how to get a debt snowball going, versus investing that extra money, because their credit card debt was so high and the interest was also high, like 14%!!! Gah!! I’ve been surprised how many young people here have been open to talking about finance, investing, and debt reduction that I say the biggest thing you can do is talk about it and see if anyone is recepetive. Take the taboo out of the subject.

    • Oh man, that is crazy how little your dad left behind. And I’m sorry you’re now seeing the challenges continue with your mom and sister. Thank goodness they have you to at least teach them some better habits if they’re ever open to it, instead of a son/brother who’d be giving them some terrible advice like, “Live a little! You deserve it!” :-)

      I love that you talk about money with colleagues — I’ve even been inspired by you and started to do it more. I recently got several of our junior level folks to sign up for the 401k with the escalating percentage program, and I got a colleague at my level to switch to index funds. So little by little…

      • That’s awesome! My first conversation was at lunch and I got hammered with questions about investing, and while I talked about investing I stressed tracking your money is more important. Like 2 weeks later, investing comes up and i ask, have you started tracking your money, and she said, yes, and I realized we have a LOT of debt! Haha! But she started tracking spending which was awesome and is now over halfway paying off her debt.
        Since then, I talk more and more and have had more people coming to me with questions, but I realized if you break the “taboo” about discussing money, then people feel like they can at least ask you questions about it and have someone to go to vs the internet.
        Congrats on getting folks around your workplace to make some changes too! That’s pretty awesome!

  27. I think it’s so important, especially for the younger generation, to understand that you cannot depend on *any* safety net being in place when it comes time to hang up your hat and enjoy the rest of your life without a full-time job. Even though I believe that social security (at least in some form) will always be around, it’s wise for youngsters (all of us, really) to *pretend* that it won’t be, to build the foundation to fend for ourselves independent of government, family and friends.

    Of course, the real question is HOW, and that’s a huge, huge topic. How do we convince the majority of Americans that buying a boat isn’t as important as saving for retirement? At some point, I don’t think this can be taught. Eventually, we just gotta want it. We need to see the forest for the trees and actively make the decision to start thinking ahead. What’s life going to be like 10 years down the road? Do we even care?

    I think your point is well-taken. Average doesn’t mean “good”. They aren’t synonymous. The goal in life should not be to stay average. Average, in my view, is the bare minimum. If the media tells us that the average person is screwing themselves out of a nice retirement, and somebody views that to mean *they are in good hands* because they too are screwing their future selves, that’s a huge, huge problem.

    Thought-provoking, as always! :)

    • It’s sad to think about, because I seriously hope that we can make SS sustainable. I’ve seen enough experts say that it wouldn’t actually be hard to do that I kinda believe that. But you’re right that no one should plan on getting SS later in life, especially those who are young now, and should instead try their very best to be self-sufficient later. And re: “average,” my main frustration is really just with how the media is reporting it. No one who is failing should be considered average, so I think it’s a terrible word choice. I know reporters can do better!

  28. I’m torn by this. On the one hand, the media likes to poke fun at how dire the retirement/savings situation is overall. On the other hand, the media have never retired early and don’t know all the ins and outs of early retirement life.

    I’ve seen ENDLESS amount of people from all ages who are enjoying retirement life who have lots of money and very little money. It costs nothing to play tennis on the public tennis courts, go to the beach, and walk in the park.

    There is so much wealth out there, and you don’t need to be wealthy to enjoy!


    • Hi Sam — That’s for sure true that some people retire very happily on tiny amounts of money. Our frustration is with the social norm that the media create with the words they choose in their headlines, essentially saying to everyone, “You’re probably not saving enough, but it’s okay.” It’s NOT okay for most people, and we need a different narrative. Thanks for chiming in!

  29. Wow! I found this blog and the comments so depressing.
    Maybe lots of folks out there have had lots of money or financial choices and blown it. I don’t feel like I have…and yet I am 72 and will be FI at 75,
    I feel like I’m lucky because i am self employed, work only 10 hours a week,and absolutely love my work (I plan to retire retire around 85)
    I look at my neighbor who is 77 and works as a school crossing guard to supplement her SS- she is out in the rain and snow and cold and heat-and I worry about her.She is always positive and cheerful but I know it must be hard,…
    and trust me neither she nor I have spent our lives living the high life.
    I guess I felt a lot of assumptions were made about what is possible …and the reality is that what others think is possible or take for granted is not always possible.

    • Hi Madeline — I tried to cover that in the big caveat that we shouldn’t assume everyone could save, and we clearly need policy solutions, not just an expectation that everyone is on their own. But you’re most certainly right that not everyone is able to save for a cushy retirement at age 65, and no one should assume that anyone who can’t has been out blowing their money. My big issue is that the media seems to be lulling into this feeling that everything is okay if we’re all undersaving, and I think if the narrative were different, people might be out demanding those policy solutions or at least those who can save more would feel more urgency to do so. I admire you greatly for having such a positive attitude about working until 85! As you know, that’s quite different from our goal, but awesome!

    • That’s a great and important point! And those stories so rarely mention racial and ethnic disparities in savings, income, and all the rest. We need to bring that narrative forward!

  30. Great post! And can I just say, your headline of “Bottom Half of Savers Will Get Eaten by Giant Space Monsters” is totally awesome and I feel like if any headline would get people to think about their money/retirement, it would be that one! ;)

  31. I think that a lot of mainstream media writers might also not have enough saved for retirement so when they say you’re not alone, they might be trying to comfort themselves as well.
    A very unique aspect of this community is that most of us that weren’t good with money since day one are going through this unique transformation of our relationship with money. We become very passionate about the lifestyle and are more than willing to give testimonials about living this debt-free lifestyle where you can save enough to even retire early. We see the problem as is because we’re now on the other side.
    We need to keep writing and speaking out with urgency until that one day we become the main voice for retirement because this is what we live.

    • That’s such a great point! I hadn’t even thought about the writers themselves and their own need for financial validation. And totally with you — we’ve all seen both sides of it, and now need to be the evangelists for what we’ve learned is possible! :-)