from Hacker News

There Is a Significant Need for Retirement Savings in the US

by FigurativeVoid on 3/6/25, 4:17 PM with 99 comments

• by melenaboija on 3/6/25, 4:52 PM

  The working class in America (specifically the lower segment) is surprisingly opposed to social protections, which is strange considering they live in the wealthiest country in the world while also being the most unprotected among Western democracies.

  Social protections are something that not even conservative parties in Europe can challenge (at least for now, we’ll see if the US trend spreads there though).

  As a European who has spent a decade in the US and has always had a speech for expanding the social safety net (and, BTW, I’m on the fortunate side of US society), it seems impossible to me that some people will ever understand this, especially and shockingly, those who need it the most.

• by vlark on 3/6/25, 5:16 PM

  In order to save, you need to earn enough to do so.

  The average salary in the U.S. is $66,622, and the average household income is $80,610.

  The average housing cost is $2,715 per month, or $32,580 a year. Average food costs for a single person are around $9,000 a year. Average total utility costs are $7,200. Average healthcare costs per person are $14,570. Average car ownership costs are $12,182 per year.

  These average expenses total $75532 per year, meaning the average single person with an average salary is $8910 in debt. You can do the math for the average two-car household yourself.

  And we haven't even accounted for taxes. Or the costs of raising a child.

  Now, admittedly, this average person/average houshold most likely does not exist. But simply looking at averages points out the problem that most people are already stretched financially too thin to stock away something for retirement.

  Over half the United States population earns less than $100k a year, and the median income for all earners (the middle point, right smack in the middle of all earners of all ages and genders) is roughly $40k.

  I'm sure all you folks earning over $150k a year with stock options are doing fine, but realize you guys are in the top 20% of income earners in the U.S. whether you feel like you are or not.

• by standardUser on 3/6/25, 5:05 PM

  Americans will do anything but remove the cap on taxing income over $176k.

  It's a bizarrely unique American notion that those who can most afford it are given the exemption and the burden falls to those who can least afford it. And that those who profit most from the system are given a pass on having to actually pay for it.

• by toomuchtodo on 3/6/25, 4:28 PM

  This problem is unsolvable, because we don't want to solve it. Social Security is under attack, while keeping 23 million people out of poverty and being one of the most efficient value transfer and benefits system in the world. We don't want to raise taxes to improve funding for it. Wall Street is chomping at the bit to get access to worker retirement funds. Pensions are unpalatable, even though they could be accomplished with Australia's superannuation model, and are necessary for workers to get investment cashflow to obtain exposure and fiduciary management of the investments.

  The wheels will keep coming off the cart.

  https://www.gao.gov/financial-security-older-americans

  https://www.visualcapitalist.com/a-visual-breakdown-of-who-o...

  https://en.wikipedia.org/wiki/Superannuation_in_Australia

• by grandempire on 3/6/25, 4:46 PM

  I think we should revisit the policy of an actual forced savings account - rather than the bad proxies for it: social security, home equity, 401k.

  The general population is not smart enough to understand a 401k and raids it as soon as they can.

  The Obama administration was big on the “gentle nudge” policies - so that for example they would enroll you in retirement, but you could opt out, but I don’t think that’s strong enough.

• by EarlKing on 3/6/25, 4:54 PM

  There is a significant need for a lower cost of living and wage increases to even entertain the notion of retirement savings first. Get back to me when you solve that problem first.

• by UltraSane on 3/6/25, 4:59 PM

  The interest income on money created by fractional reserve banking should be used for this instead of making rich bankers richer.

• by onewheeltom on 3/6/25, 10:57 PM

  A significant number of Americans are living paycheck to paycheck. Hard to save without having the $$.