SURVEY SAYS: Retirement Derailers

May 20, 2013 – Last week, we covered a survey that explored the events that have derailed or threaten to derail Americans’ retirement plans.

I asked NewsDash readers, what retirement derailers have you experienced?  

A majority of responding readers (56.3%) said market declines during the recession have derailed or threaten to derail their retirement plans. One-third (33.3%) selected a “decline in home equity,” and 31.3% each chose “paying for children’s education” and “my or my spouse’s job loss.”  

Survey responses for the other selections were: 

  • Nothing, I’m on track – 4.2%; 
  • Low interest rates – 25%; 
  • Supporting grown children – 10.4%; 
  • Supporting or financially helping other family members – 22.9%; 
  • Unexpected health care expenses – 16.7%; 
  • Other unexpected major expenses – 10.4%; 
  • Dipping into savings for expenses – 20.8%; 
  • Beginning to save too late – 14.6%; 
  • Not saving enough – 12.5%; 
  • Building up too much debt – 16.7%; 
  • Spending beyond my means – 10.4%; and 
  • Pension plan frozen or terminated – 4.2%. 


“Other” responses (27.1%) included divorce, spouse’s bankruptcy, death of spouse, revenue loss from personal business, having children, plan testing failures (getting money back each year), helping out-of-work friends, and decrease in pay.  

Since they’ve experienced the derailers, 14.9% of responding readers indicated they are still hopelessly off track for their retirement plans, while 34% are still off track, but expect to get back on track before retirement. More than half (51.1%) said they are back on track.  

The verbatim comments confirm that it is tough to stay on track, with some reminding us to “hope for the best and prepare for the worst, and that derailers are part of life.  A couple of readers called for a solution to Social Security insolvency. Editor’s Choice goes to the reader who said: “Hey, to coin a phrase ‘excrement occurs.’ You pick yourself up, dust yourself off, and do the best you can. It’s called ‘life.’”


Sometimes it’s tough to stay on course. 


My husband is on permanent disability. Besides not being able to work, his medical expenses negatively impact finances. Combined with our son's tuition I am absolutely hopelessly off track. It's a good thing I'm worth more dead since I can never retire. 


In life there are no absolutes. Anything can happen and does. Roll with it or be consumed by it. Hope for the best and plan for the worst. 


Assume the worst, hope for the best and plan for the inevitable. 


Save early, often, and more than the 'experts' tell you. If you experience a derailment, you will be able to bounce back. Worst case is you DON'T experience one - how great would that be!! 


We have spent many thousands of dollars on caring for my husband's elderly parents. They can't afford their own care and they don't qualify for Medicaid. How are "normal" families supposed to recover from this kind of a financial blow in the era of 2%-4% investment returns? I expect to delay retirement and/or to live a lower quality of life in retirement because of the cost of caring for elderly family members even though I have saved money my entire working career. 


Based on the attacks and negative reporting, I see a future where pension envy puts us DBers in a group that is treated differently for state and federal tax, benefit and coverage purposes (something like the WEP and GPO on steroids). 


Archaic divorce laws that make a mockery of everything this country is supposed to stand for (e.g., capitalism: one is rewarded for talent and hard work - NO) 


Being a single mom and having health issues, life drained my cushy retirement plan. 


Even when the market was down I continued to contribute. I really despise all the calculators that use a 5% rate of return, as I am not yet back to that number yet and wonder if I ever will be. 


Although my husband was unemployed for two years, and we had to take a 401(k) loan to consolidate bills, we seem to have gotten back on track. The market declined hurt (on paper) but we are in it for the long haul and have recovered. With 15 years to go till retirements I feel that we are in a good place with house will be paid and no kids. Only concern is possible health care costs.

Verbatim (cont.)  

They happen. We need to adjust. It's life. 


There are so many events that can impact an individual being able to save adequately for retirement. That's why we need to enhance Social Security and make it as strong as we possibly can. We owe it to all the people who work hard their whole lives and through no fault of their own wind up spending their old age living in poverty, 


Of my 7 closest friends, one is a stay at home mom; three (including my own spouse) have been unemployed for years; and one is seriously under-employed (a few hours once or twice a week). That leaves only two of us who have any regular income other than disability. It's hard out here, and almost impossible not to backstop and support a friend. 


Whew, seems like I've been touched by more than my fair share of the derailers. Imagine, if you will, that someday, we'll look back and say these were the good ol' days. Yikes. 


Having had three children in college simultaneously - my funds - including college funds - were stretched beyond stretched but I managed a minimum savings amount - but layoffs are different. Unemployment insurance is a replacement for income - just stabilization money. 


Well, I HOPE I'm on track! I'm saving as much as I can given the salary that I make. One can save only so much and still meet daily expenses. 


Being a one-income family, it's never been easy, but we're on track to retire at 63. 


Thankfully I still have 13 years to go to get to age 65 when I hope to retire, if not sooner. While we paid for the children's education, it didn't derail retirement savings, just used up a lot of our cash savings. 


Social Security insolvency in the next 10 years 


Hey, to coin a phrase "excrement occurs." You pick yourself up, dust yourself off, and do the best you can. It's called "life." 



NOTE: Responses reflect the opinions of individual readers and not the stance of Asset International or its affiliates.