Nobody starts their working lives thinking that after working forty years they'll be poverty stricken. No, we all start our working lives full of enthusiasm with the belief that the future has something special in store for us.

A study in 2005 by the prestigious private bank Coutts and Co (the bank the Queen of England uses) found that "Over 50% of people believe they may become a millionaire in their lifetime." That's £1 million, or approximately USD $2.0 million.

Similarly, a 2003 Gallup poll found that 51% of Americans aged 18 to 29 thought it was very or somewhat likely that they would be rich one day. (That number dropped to 8% for those 65 and over!)

Inaccurate data:

One of the most published pieces of research I've come across states that of 100 people who start work at age 25, by the age of 65:

* 1 is wealthy
* 4 are financially independent
* 3 are still working
* 63 are totally dependent on others (government, friends and charities)
* 29 are dead

This research can be found in dozens of websites (usually associated with multilevel marketing promotion) and in some of the most popular self-help business books on the market. It's usually attributed to the U.S. Bureau of Labor Statistics. Unfortunately, it's not true. It was totally made up and been copied by people until it developed a life of its own.

The head of longitudinal research at the Bureau of Labor Statistics, who oversees all statistics they produce that cover multiple years like this, confirmed that the data is indeed false.

So let's look at some of the claims. What are the chances that a person will die between the age of 25 and 65? According to the inaccurate date is 29%. The National Centre for Health Statistics produces a life table that shows that those who survive to age 25 have an 84% probability of surviving to age 65. In other words, the chances of someone dieing between age 25 and age 65 is 16%, not 29% as stated in the false research.

In addition, the false research states that at age 65, 3 people will have to work because they can't afford to retire. Unfortunately, the reality is far worse. A report by the U.S. Labor Department states that in 2000, 24.4% of 65- to 69-year-olds and 13.5% of 70- to 75- year-olds continue to work.

Retirement truth:

So, assuming you reach age 65-which 84% of 25-year-olds will-what does the average retiree's finances look like? Not very good. According to the U.S. Department of Health and Human Services, "the median income of older persons (age 65 and above) in 2002 was $19,436 for males and $11,406 for females." Furthermore, "the median household income for families headed by persons 65+ in 2002 was $33,802."

The U.S. Census Bureau reports "the median net worth of elderly households (with a householder aged 65+) in 2000 was $108,885." However, "home ownership accounts for $85,516 or 78.5% of this net worth," which leaves only $23,369 on average to fund their retirement. With an average of only $23,369 to fund your whole retirement, where does the average retiree get the income they need to survive?

The Bureau of Labor Statistics found that government-provided social security is the major source of income (providing 50% or more of total income) for 66% of those aged 65 and older. Thus, two thirds of all people over the age of 65 are totally dependent on social security to maintain their standard of living. Furthermore, social security dependency rises from 50% or more of total income to 90% or more of total income for one-third of those aged 65 and older, and is the only source of income for 22% of them.

The sad truth is that being "average" means being poor and mostly dependent on the government to support you in your later years. 66% of those 65 and older have to get 50% or more of their income from social security and 24% of 65- to 69-year-olds are still working.