So, it’s possible it’s not as bad as the numbers seem. It is a government sponsored survey, after all. Do they even know how to calculate a sample size?

Also, you present only two options when there are many more to choose from. Your “smart” investor is, I’m assuming, investing in traditional stocks, bonds, and possibly some option trading on the side. Well, traditional stocks are at best not productive in any way, and at worst theft, because non-dividend stocks are literally a zero sum system. There are plenty of investment opportunities out there that derive their returns directly from the success of the businesses they invest in. Why not form an investment group with a few other like-minded individuals and invest in sustainable local businesses in lower-income areas of their city? I dare you to find me someone who’s made a good nest egg for themselves off of responsible local investing and been vilified for it.

For example: “Only 51 percent of survey respondents have a retirement plan at work and just 28 percent have retirement accounts separate from their workplace plan. (I wonder how many own flat screen TVs and have car payments?)”

Having a retirement plan at work doesn’t depend on a person – not every company offers a retirement plan. Maybe instead of (or in addition to) flat screen TVs, some of these people have millions in taxable accounts? OK, I know they don’t, I am just saying that the test itself doesn’t mean much. But really, 49% who don’t have retirement plan at work may 1) work for a small business that doesn’t offer one 2) have no match and such terrible choices that it makes sense to save money elsewhere. On the other hand 28% who don’t have additional retirement accounts may have a very generous plan at work and prefer to keep the rest of the money in taxable accounts. Case in point – my 50 year old co-worker whose net worth is over 2M, maybe 3M, and who could retire tomorrow except for being a well-known in his field scientist who is very interested in his research he doesn’t want to. We discussed it. He told that he’d be bored; if he is retired against his wish he may teach at a university – he had offers – or retire, but if they keep him he’ll work for 10 more years or so. He doesn’t have IRAs (except for maybe inherited ones – I am not sure, but certainly not personal ones), he maxes his 401K and he also has A LOT of investments in taxable accounts. He earns too much for Roth and he doesn’t bother with opening after-tax IRA now to convert: he says he doesn’t trust the government not to change rules and it’s too little money to bother with. Oh, and unlike some of the “smart” people who had great plans, he moved all his 401K to stable value long before this crash; he also significantly reduced stock holdings in taxable accounts in 2008. So he hardly lost any money at all. Now, while he is probably not indicative of an average American, he would still be among those 28% who don’t have other “retirement” accounts.

There is this perception that if you don’t have money specifically labeled “retirement”, than you don’t have money. This is wrong. Nobody knows what tax situation will be when we retire; any money not spent today will be there for retirement whether they are labeled “retirement” or not.

Additionally, this friend of mine never bothered to calculate how much he’d need. He knows he has enough. Frankly, I don’t have a specific number either. I know that if I retire today, it’ll be tough, but I also know that if I can keep my job for the next 10 years or so I’d have more than enough. Oh, and my retired parents did no calculations either, they just saved as much as they could. BTW, I did try a couple of calculators, and they give me different results. I have a ball park figure of how much I want to have, and I save what I feel is a reasonable amount which include maxing out retirement accounts and saving whatever I don’t spend in taxable accounts — which at the moment about half of my net, but I am not really trying. But the real calculations of how much one needs have way too many unknowns: how long you’d live, what the tax rate will be, what the return will be, how much medical care would cost. It’s like looking at crystal ball.

I would think that questions about current net worth, current amount of savings by age and saving rate (in all accounts) would be much more useful criteria.

Two people work at the same company, same jobs, same salaries.

One person spends every penny they make, moderate debt level (defined however you want), and not a dime saved or invested. Files a 1040-EZ and usually gets money back.

The other person lives faaaaar under their income level, has a 6-figure investment portfolio, is rapidly approaching AMT levels, and usually has to write a check on April 15. Plus, this person is vilified in the media for being “greedy” and “selfish” and said to have stolen their worth from others.

Tell me again *why* one should be financial savy?