George Kamel - 10 Alarming Retirement Stats… Are You Ready?

Episode Date: June 12, 2024

💵 Create a free budget. Sign up for EveryDollar today!   About This Episode:  Today, I look at some alarming data around retirement in America and what you can do to beat the stats.  Next Steps:   📗 Order George Kamel’s new book, Breaking Free From Broke  Free Retirement Calculator  Free Retirement Tool   Find a SmartVestor Pro 🎥 Watch: “How Much You Should Have in Your 401(k)—By Age”  🎥 Watch: “Investing for Beginners”  Offers From Today's Sponsors  This episode is sponsored by Tello, a mobile service plan designed to save you money. Go to tello.com/George for $5 off your first month of Tello’s unlimited data plan. 🙌    Listen to More From Ramsey Network  🎙️ The Ramsey Show    🍸 Smart Money Happy Hour  💡 The Rachel Cruze Show  💸 The Ramsey Show Highlights  🧠 The Dr. John Delony Show  💼 The Ken Coleman Show  📈 The EntreLeadership Podcast     Ramsey Solutions Privacy Policy  Learn more about your ad choices. Visit megaphone.fm/adchoices

If you know me, you know I love a good statistic. For example, did you know that between 1% of people have an extra rib? Like in their body, not their lunch at chilies. Although that would be a lovely surprise. Chili, baby, that... Anywho, I've seen some stats recently that weren't so lovely. In fact, they were kind of scary. And they all have to do with retirement.

Isn't that the scariest thing of all? For example, a big chunk of Americans have zero in savings. And I hate to break it to you, but zero bucks not going to get you very far in retirement. So what can you do if you're part of that chunk of non-savers? And how can you make sure you have enough to retire? And is it too late to get your finances on track before you vacate your vocation? Lots of questions, and I've got lots of answers. So in today's video, we're going to look at some of the data around retirement in America

and see what you can do to make sure you beat the stats. But first, hit those like, subscribe, and share buttons while I order some ribs from Chili's. Hashtag, not sponsored. Although, chili's been real quiet since I dropped that banger parody. Real quiet. Hello, Chili's. Yes, one rib, please. Thank you.

Goodbye. Okay, let's jump right into the first retirement stat. 33% of Americans have no savings. Nothing. It's a pretty sad state of affairs when my nine-month-old daughter has more money saved in her piggy bank than the third of the country.

And if you're in that third, you're setting yourself up for trouble down the line, especially in retirement. And I know with inflation, the rising cost of living, stagnating wages, yada, yada, yada, it can feel impossible to save. But you have to create some margin

in your budget for this. Now, let me be clear. You cannot save your way to wealth. There's a huge difference between just saving up money in the bank versus actually investing. And for most people, investing consistently into tax advantage retirement accounts is how they've been able to build up enough wealth to actually retire on. And saving comes before investing. So before you start contributing to that retirement account, you should have three to six months of expenses as a fully funded emergency fund. That way, you're not going to be financially ruined when you have to commission a search team to find her emotional support alligator. And I wish I was joking, but this is very real and it's not a time to laugh.

Where's Wally? This is just weird. Joe, we're going to get your baby back and I'm not talking about ribs for once. We're going to get Wally back to you, buddy. Use the hashtag Find Wally and if you see something, say something. If you or anyone you know has details about this, please contact Joe. Joe Mama! All right, the next stat is about Social Security.

And it's really less of a stat and more of just a sad fact. Social Security payments are less than $22,000 a year. According to the Social Security website, the average monthly benefit in 2023 was around $1,700 a month. Try living on that, and you'll see why I call it social insecurity. Social Security, you burnt. Aren't you sassy today? I mean, that's approaching the poverty line.

And by the way, that's the average. Some people get less than $900 a month. So relying on Social Security to fund your retirement is like trying to hold up your mirror with scotch tape. That is so embarrassing. It's not going to work out, and it's not enough to live on. And even the Social Security Administration has said, this is not meant to replace all of your income.

And that's why you need to spend your working years investing 15% of your income into tax-advantaged retirement accounts, like your company 401K and a Roth IRA. More on that in a bit. Now, this next stat is pretty alarming, considering how easy it is to contribute to a 401K. Only 61% of Americans are actually investing. According to data from Gallup,

61% of Americans said they own stock, which means 39% aren't investing in the stock market at all. This is a low-key big yikes. How do you do, fellow kids? Investing is the key to retirement. When you're investing, your money starts to make money thanks to a little thing called compound growth. And if you invest consistently over enough time, you eventually get to a point where your money is making more money than you are. That replaces your income and begins to cover all of your expenses. That's where you want to be financially before you decide to piece out on your profession,

and spend your days birdwatching and going to stretching classes at the YMCA. So if you're a part of that 39% with no investments, you need to start investing as soon as you're financially ready. That means debt-free with a fully funded emergency fund. And if this sounds too intimidating or too much of a hassle, consider the alternative, which is retiring without enough money to buy the best of Conway Twitty CD at a cracker barrel. And they do have it on cassette tape if you're old school.

Try the worst of Conway Twitty. Not a song on there. There is no worst. It's only the best. Ladies and gentlemen, Mr. Conway Twitty. Like I said earlier, a great place to start is your company 401k or a Roth IRA. Now, I made a whole video about the basics of investing, and I will link it below if you want to check that out. Now, as a personal finance expert, the next stat on our list is more disappointing than finding out wrestling is staged.

Telling me, it's not real. Here's the stat. 78% of American workers are living paycheck to paycheck. In fact, Ramsey Research also found that even a third of of people making over $100,000 a year are living paycheck to paycheck. So what does this have to do with retirement? Well, think about it. How can you possibly build wealth and retire with a nice nest egg if your bank account

keeps hitting zero and you have no margin to invest? Not good. Next stat, only 31% of non-retired people feel on track with their retirement savings. Now, even though retirement is a top goal in America, 69% of people feel behind when it comes to their savings. So how do you even know if you're on track? Well, there's an easy solution to this. Crunch the numbers.

Thanks, Math. You're always there for us when we don't need you. So much anger. No place to put it. Seriously, though, I'll drop a link to our free retirement calculator in the description so you can figure out for yourself how much money you'll need to retire. This is a great first step. And when you're using this tool, play around with the numbers to see how your monthly contributions

could affect the size of your nest egg over time. It's a great way to see how compound growth can turn a little into a lot if you give it enough time. Now, it's also good. idea to figure out how much you need to save in the first place, which brings us to the next depressing stat. Fifty-four percent of American workers have not calculated what they need to live in retirement. People, we got to do better than this. It's super important to have a good idea of what your expenses will be in your golden years because the worst place to run out of money is in retirement. The second worst place? The clearance section at a raw stress for less. You're going to miss out

almost 49-cent Timmy Hilfinger shirts. Yeah, lesser-known brother. Different last names, I know. I was just as shocked as you. You'd think it would be Hill figure. No, it was a misprint. Finally, the truth. So how much do you need to retire? Well, there's no magic number here. How much you need depends on how much you want to live in retirement. But the trick is this. You want a nest egg that's

large enough that you can live off the growth that creates each year without dwindling down the principle. So for example, let's say you have $2 million in your nest egg and it's invested in an IRA that averages a 10% annual rate of return. That doesn't mean every year it's 10%. It just means over time. It just means over time

the average is 10%. That would mean an average of $200,000 in growth each year on that $2 million. Now, keep in mind, that's an average. Some years could be less, some years could be more, some years it could even be negative. So the question is, can you live off around $200,000 a year in retirement? I hope so, but that's a question only you can answer. So if you want a better idea of how much money you'll need to retire and how much to save each month to help you get there, check out our free retirement tool that I will link in the description below. Okay, let's move on to the next stat. 40% of people have no one they turn to for retirement advice. That's a problem. Listen, having a trustworthy investment pro can be a great move. They can educate you on investment

choices and they can help keep you on track with regular check-ins. I'm a personal finance expert and even I use an investment pro because I value having someone in my corner who spends all day knee-deep in the numbers and charts so I don't have to. Now, don't get me wrong. I'm a nerd, but more of a single origin coffee nerd, not so much a charts and graphs nerd. Now, if you need some guidance finding a trustworthy pro, check out the link in the description below, and we'll help you out. Next stat, 24% of Americans have reduced or are considering reducing their retirement plan contributions due to rising inflation. I get it. Inflation sucks, and things are a lot more expensive now than they were just three or four years ago. But this logic makes absolutely no sense. If you invest less

so you can spend more now, you're just robbing from your future self, who mind you, we'll be living in a world in which we have no idea what the inflation rates will be and how expensive things will be. Oh, now, that's a horrible thought. So cutting back on investing should be your absolute last resort after you've exhausted all of your other options. Okay, here's a bonus stat for you. The average phone payment is $144 a month. And over time, that adds up to like over $1,700 a year. But there's a way you could pay less for your service so you can save more for retirement.

And that's by switching to Tello, the sponsor of today's episode. Tello is a phone service provider designed to be super affordable and super flexible. No contracts, no fees, no strings attached. And one of the best parts, you don't have to go anywhere to sign up. No joke, I signed up in less than 60 seconds from the comfort of my own home without any help from some guy in a red polo trying to push a $65 phone case on me. You can even keep your same phone and phone number. And if you're worried about coverage, don't, because they use the same towers as T-Mobile,

so you know you're in the clear. Tello pricing starts as low as five bucks and goes up to 25 bucks a month for the unlimited everything plan and you're free to upgrade or downgrade as you please and to save you even more I hooked you up check this out go to tello.com slash George and get five bucks off their unlimited data plan for your first month of service It's been great for my family and I know you'll love it too That's tello.com slash George. I'll also drop the link in the description below all right all these depressing retirement stats are making me want to listen to some boni Vair and polish off a whole pint of Dulcei Dillard Leche Haagenas. So let's shift gears here. Here's some positive stats about retirement. According to Ramsey's National Study of Millionaires, eight out of ten millionaires invested in their company's 401k. They said that was the number one vehicle to get them to millionaire status. And three out of four millionaires said that regular, consistent investing was the key to their

success. I know what you're thinking. Well, they probably got a big inheritance. No, no, no. Eight out of ten didn't receive an inheritance at all from their parents or other family members, and nine out of ten said an inheritance was not the cause of them becoming millionaires. Now, you're probably wondering, well, they probably made a great income. No, no, no. One out of three never made six figures in a single working year of their career. That's pretty amazing. So it turns out you don't have to win the powerball jackpot or make risky single-stock investments

or inherit a fortune from your weirdo hermit uncle to retire a millionaire. Here's some more encouraging data from our research. The top five careers of millionaires were engineers, accountants, teachers, managers, and attorneys. And 93% of millionaires said they got their wealth because they worked hard, not because they had big salaries. So no excuses here. Here's the big takeaway. Retiring with enough is not an impossible task. In fact, it's easier than you think if you create the right habits, live on lesson you make, and consistently invest.

That's the key. So the American Dream is alive and well and available to you, and it's not too late to do something to improve your financial picture. Anyone can retire a millionaire if they do the right things with their money over time. Even your cousin Becky, who got into the beauty counter MLM at exactly the worst time. There is still hope for you, Becky. Get out while the getting's good. It's not like a cult, is it? Now, after all this, you might be wondering if you're going to be okay in retirement or if you'll end up being some depressing stat.

Well, if you want to get a gauge on how you're doing with your retirement savings, check out this video to find out how much you should have in your 401k by age and what you can do to catch up if you're behind. Thanks for watching. See you next time. Oh, my ribs are here. Thank you. We get an extra one in there? Come on, big money, big money, no whammy.