February 5, in Financial Planning , Retirement Planning by Financial Samurai. The k does a woeful job in replacing a pension. Before I explain the assumptions behind the chart, please take a look to see whether you think the amounts are too high or too low and why. There should be plenty of opinions because everybody has different life circumstances.

The initial feedback is negative for folks up to age 35, and much more agreeable for folks over Numbers have been rounded up to make the numbers easier to remember.

There still is no company match. My chart is the suggested balances by age for a healthy retirement not dependent on others. Based on my chart, we can make an assumption that the majority of us will all retire as millionaires by the age of The biggest challenge of a 22 year old is to not develop wanderlust too early and maintain discipline in saving as aggressively and consistently as possible.

If you are below the Low range, then it is likely you think the chart is unobtainable for most Americans. Life happens to us all. But if you are to be completely honest with yourself, you know you could have probably saved more if you absolutely had to.

You realize the median life expectancy is 80 years old for men and 82 years old for women. The numbers are aggressive because maximum contribution amounts were lower in the past. But humor me anyway as this is just an exercise of what could be. Every source available says that Americans are not saving enough for retirement. Supposedly two-thirds of working households age with at least one earner have retirement savings less than one times their annual income.

Finally, more than 38 million working-age households 45 percent do not own any retirement account assets, whether in an employer-sponsored k type plan or an IRA. Hopefully these households are diligently saving their money in after-tax accounts and not solely depending on Social Security. But the below solutions should at least help:.

As you can see from the High End column, compounding really does do wonders when there is a positive annual return.

Even with no compounding, you will end up with 14X — 63X more than the median household. As soon as you can uncomfortably start maxing out your k, go for it.

Extending work life is one way to solve the retirement gap. But sometimes you might get laid off, or nobody wants to hire you.

Besides withdrawing from your retirement funds and collecting Social Security, think about developing other sources of income to support your lifestyle. Other sources of income can be in the form of creating an after tax dividend portfolio, building a CD ladder, or investing in peer-to-peer lending to name a few.

The more you can track your finances, the better you will be able to grow your net worth. The clients who I speak to who need the most help with their finances have never bothered to calculate their net worth or track their cash flow.

Practice the habit of knowing exactly how much you have in each account, your average total monthly expenses, and your average total monthly income to start. Sticking to a consistent process over time does wonders. To do so, simply:. Thanks to Personal Capital, I switched out of several expensive mutual funds and into lower cost funds in my k that should allow me to reach retirement two years sooner than planned. Reduce Your k Fees With Personal Capital today. Sam is the former Managing Editor of the Daily Capital blog.

He worked in finance from before deciding to focus full-time on his online endeavors - FinancialSamurai. Sam is an avid tennis fan who loves to travel. Once I did get access to one later, it took me many years before I started maxing it out.

The younger we start saving, the better. The goal of the chart is to provide a REALISTIC picture of what could be and motivate folks to save. The data on this article is on the dot. Your chart is definitely not painting a a REALISTIC picture of what could be for most recent grads. I rented a studio with a buddy, as we figured it was like a more luxurious dorm room. I also took advantage of the free stuff. I remember making 40K a year, and living with a buddy my working wife.

I scrimpt and saved. Was no where near the 16K you are talking about. In that circumstance your allowed contributions can become almost non-existent. This was designed to keep the plans from becoming top-heavy , with only the big earners benefitting, but it backfired. When junior high age my grandmother had a serious discussion with me, the gist of which is that it you had less, you would do things differently to survive, meaning spending less is always an option, and you can always save.

Spending less is a religion and is heresy to most, the government included. Why spend less when you might die with your credit maxed out and never have to repay, or live and have political processes transfer the value of your savings to indebted others? Freedom of religion gives each of us some wiggle room, but wiggling away from living beyond your means requires very deliberate action often not complimented by main street culture. College next with a full-time union job that rotated thru each shift every week found me living modestly while making more than ever before and able to pay for everything out of current income while saving about half my pay.

That generally meant living on less than 4 hours of sleep, but being young, healthy and motivated is pleasant. Admittedly, I never had to reduce my standard of living in order to be living modestly, and some difficult sacrifices were made. I think many young people today have grown up in a much more prosperous environment and have a very different idea of what living modestly means; paying cash for everything including a car or paying with credit cards only when having savings to pay each off every billing cycle, buying a house as a business decision and only after becoming informed by doing your homework about the investment, potential expenses and return on investment, routinely think of every expenditure, even the most petty, as having to be justified.

Neighbors, a family from SE Asia with 5 young children and both parents being physicians in their country come to mind. The parents took jobs here cleaning floors and on that income they and their children purchased a home and put each of the children through school, college, and graduate school. If you travel in a different circle, get out of that box. Try doing that today, you would barely make enough to pay rent. Classic, tell everyone how you did it when tuition and rent were affordable, when rent and tuition today make that impossible.

Most people I know went to grad school or moved back in with their parents. Living in manhattan on the average college graduate salary is laughable. Even if you had the money to make the max contribution, you would be limited by the percent of salary cap. Contribution limits are dollar limits, period. Did you even bother punching in census numbers to come up with your chart?

What about percent of salary going into home mortgage, average age when having children and costs associated? Lets not blame the upper management. I too cannot afford that with bills accrued before a good job house, cars, loans, etc. This also assumes no one has any bills or student loans after college and a job that pays well over what they may have in debt. Most corporations are not giving huge raises.

They may however give big bonuses. I do not look down on that. If your upper management has put things into place and people in place to do better then they should get a bonus for doing a good job and producing.

As too the employees doing the work if they are going over and beyond to do more. That is unrealistic for most people. That is y the rich get richer. But maxing out is absurd. I believe it will save you a lot of financial regret in the future. When the government came out with the Clash For Clunkers program, I was amazed. That is a personal finance KILLER. Never finance a car, or live with car payments for the rest of your life.

They make more on fools financing than on the cars themselves. Well, what kind of car, year, make, moldel….. There IS a difference between getting to work…. I bought my car 17 yrs ago new. You can save a lot of money by just repairing yours. But I do agree that to K is way too high for most people. I agree, this chart is ridiculous. I hope less people face this reality as time goes on, because the reality is scary.

Car companies are not making more on financing than the cars, unless margins on cars are a lot lower than I think they are or rates are a lot higher. I use a different formula that still keeps car expenses low, but is more realistic.

So, say you find a used car with , miles on it. Figure the expected life of the car is about 10 years most cars within the last 15 years will make , miles and 10, miles per year is typical.

That said, none of these make any sense if a loan is necessary. Making payments on cars must be the most sure way to losing good financial stability. Student loan debt can be avoided by working while in school. People spend way too much today compared to 30 years ago. Advice like cutting back on eating out or going to the movies, are you kidding me? Look at the migrant workers saving for homes bought in cash, driving 20 year old cars in cash, all on tiny incomes.

The modern american seems to be able to whine about having debt and no money, but appears unwilling to do anything about it. YOLO will not end well. Totally agree with you folks. NOT realistic to expect most to be able to contribute these huge amounts. I am older and still can not get even close his recommended amount, unless my wife and I would sell our house and move to an apt.

We actually did down size to a smaller house too. I think this can be more realistic than many people realize. Believe it or not I worked a second job to allow myself to contribute what I did to my k and used the PT job as my spending money. If toyr making k a year you should be driving a basic car or a decent premium used car—not brand new luxury cars.

You should be living in affordable homes and not looking for completely up to date homes. Oh, I do have a Roth IRA too. Agreed the chart is laughable. Only a minuscule few could do that from age Kevin If you can do this at the age of 22, you are well on your way. Continue to think outside the box. Great job and continued success. I feel like I live in luxury, but I spend less than 20k a year. It took me over 10 a while to develop a lifestyle and earn enough to do it.

It can be done pretty easily. I live in the Bay Area too and it is expensive. There are ways to reduce to cost of housing, eating out, etc. Is everyone living in Manhattan or a Swiss banker in this article?

Any first year analyst on Wall St. Similar amounts in consulting and many many other jobs. Check out this post for more: I doubt that as the average for engineers nationwide is 75k — and that includes ALL engineers with any number of years of experience. Seems unlikely a fresh graduate would make within 10k of the average in their first year. Many of my close college friends were engineers as well and my salary was on the higher side. Location is key, if you work near Houston or anywhere on the gulf coast as an engineer you will be paid at least 75K.

Well, my daughter graduated college a year ago and is a social worker and she is making more than me and very close to 60k a year. So, if you want it, it can be done. She also has a ROTH IRA which I helped her set up and she contributes weekly to that. If my little girl can do it, sacrifices and all, just about anybody who WANTS to do it can. You know, you can spend your time complaining about your situation, or you can do something about it.

Take what you can, work to make yourself better, and move up the ladder. Start your own business and make your own job. Go to a cheap college, live with six other people on Top Ramen, work your way through, and get out as fast as you can. Want to learn how to invest for retirement? Come to my website and learn how for free: Or buy a copy of my book — I lay out how to retire a millionaire, step-by-step.

I do think that the assumption was that the saver has a job. Obviously, without a job contributing to a k is impossible. Six figure jobs are all over Houston. We Houstonians work here for the money.

Very true, there are six figure jobs all over Houston, in many different fields. We live large, enjoy an overall low cost of living, eat great food, enjoy great museums, and have a lot left over to invest.

At the end of the game, I for one will retire early, take those earnings and live practically anywhere I want to. Think outside the box people. STOP complaining and get started. Anything is achievable with some sacrifice and proper investment. Now as a parent, I wanted the same for my child. Being disabled makes things very hard. Maybe you should consider a change in occupation. I will also receive defined retirement benefits from my employer….

If you k had very limited investment choices, you may be able to sue your employer this has been done successfully before. Given the poor returns on my k here at Tyco which is probably getting kickbacks from the fund administrator , that my dream.

But not every employer sets up a k. Many people do not have the opportunity to invest in one. But if you have the means to do so, do it! Your 55 year old self will thank you! That represents a smallish proportion of our total investment portfolio.

The rest of the money is in other retirement savings accounts and taxable brokerage accounts in my name or her name. I enjoyed the article. I am mostly in agreement. I am way behind the curve as I am a late bloomer. Graduated college at 31 after years of screwing off and not saving.

Over the last 6 years I have been increasing my percentage that I save. Along with raises and such, I will finally be maxing out for the first time this year. I am paying for school loans, living with a used car that I just have a few thousand left to pay it off. I can see how it is difficult to start this trend, however, now that I have the ball rolling, it is not at all unrealistic. Ermm, actually your data point does NOT corroborate his chart. I agree Americans are not saving enough but the chart makes very unrealistic assumptions.

The Average Net Worth For The Above Average Married Couple. My wife and I are in our 11th year of working and we have contributed to our Ks the whole time, though not always maxing it out completely, but are close. However, we do live in the Bay Area so housing costs are higher than most places. We are planning to open a solo k this year. Hopefully if we keep doing that we will be in a good position for all that we want to do after our retirement.

Sounds good to me Suba. I did mention in the post one can use these statistics as a guide for an overall savings rate. Much higher contribution limits and lots of added perks and benefits, I help my clients set them up all the time. Essentially, in my opinion, much of it comes down to priorities and the unwillingness or lack of desire to see how present actions will impact the future.

That said, starting early and making it a priority is key. That will begin to develop that discipline that will help you n the long run. We see a lot going to welfare, so I think we mentally think, worse case, we can just go on welfare. They were ridiculous nonsense that most people laughed at try googling it. Same as that recent ad about a girl who smokes pot and her dog talks to her.

People are wising up to the lies the government has been foisting about pot especially. I enjoy reading articles on personal finance and saving but would like to see more examples of how to meet those goals for people who make less than 30, a year. Thanks for sharing your situation. Does your wife work to help boost household income?

Are there any other income making opportunities? One of the things I did when I was working about hours a week in finance was to work on my writing hobby online. After three years of writing online for nothing, I decided to take a leap of faith and focus on it full-time.

The income is not as much, but it is enough to support a family of three or four in SF. I think the income aspect is an important facet to assess. It all gets earmarked fairly quickly. I just think there needs to be some perspective about what can pragmatically be done. There is a trade off in just about everything, but assessing where the floor is is important. My goal of the chart is to show POTENTIAL savings. I firmly believe a lot has to do with the choices we make.

Once the loans are eliminated, you bet I will be maxing that sucker out. As for spending, I have worked to get my costs on the big 3 food, shelter, transportation down as low as possible. Does everybody live frugally and save? My financial situation at graduation was very similar to yours. I am now 33 and have been able to achieve the target on this chart.

We always lived frugally — no major vacations we try to fly to Germany every second year… 4 persons. We hardly go out for dinner, no fast food, lunch bag from home, but still trying to eat very healthy. We just moved here Florida 16 years ago and we are doing fairly well on this scale on one income.

The 3d one comes in about 2 years. My husband started contributing to K as soon as possible and we are maxing it out each year. We started putting away money, as soon as my husband started working after finishing Grad School and military in Germany. He needed to pay back student loans, too.

Within a few years we were able to buy our apartment to stop paying rent in a fairly expensive area in Bavaria…. We are not expecting to get any social security or Rente from Germany — so our retirement funds need to be as high as possible, to have a decent live after retirement.

KW — you are doing the right steps — congrats. One potential flaw in your chart…assuming that your hypothetical 35 year old entered the workforce in or so, the k limit was only around 10k at that point not So the low end number is probably off by 20k or so. This chart is better suited for younger folks or folks who have many more years of work. I should consider doing the same for the k. I was going to point out the very same thing.

If I remember correctly, back in when I started working for my first company that offered a k plan, the k limit was less than half what it is today. Indeed you are correct. This is a great chart for young workers to make retirement relevant. What would this picture look like for those that max out after-tax k contributions? I have been doing the former but am concerned about the tax hit on the earnings, at ordinary tax rates.

Tough to say because everybody would contribute a different amount past the pre-tax k contribution max. The crisis might have been avoided or lessened if business and government had continue to invest in the worker through pensions or set aside retirement monies rather than focus on profits. How many Americans will be able to save enough for 40 years to make your saving range?

My wife and I have had good paying jobs for 35 years and are within 10 years of retirement. Our savings balance is in the range but toward the low end. When I look at our friends and family I see very, very few who have managed to do as well and avoid the many pitfalls that life throws at all of us. The K saving experiment is a myth. Companies that wanted to save profits promoted it as a pension replacement.

Now the results are made clear. I agree with you that we should have gone to or go to a mandatory contribution plan. Life is unpredictable indeed. Anyone who can still draw a pension has won the lottery compared to the k savings program.

We should probably go their route. But we Americans value our freedom to choose, so it will never happen. Should a married couple double the numbers? The chart can represent household savings if you wish, as we should view married couples as a team. Although I do always recommend each individual spouse continuously focus on building their own nest egg as bad things do happen in marriages.

Those are some good targets to shoot for. I suspect people have more than that through IRAs, outside savings etc. It might make sense. You miss the point. Both k and IRA have no floor against market loss. I understand why RMD can be a problem in a declining market but not sure what you suggest as an alternative.

Take a look at the post I just wrote on Smart Indexing. I think this is a good investment strategy to lower volatility. What vehicle offers any actual floor? Even annuities and pensions have some risk tied to the company. In addition, the less risk of loss the less the chance of keeping up with inflation.

Rollovers can make a lot of sense. I did this type of rollover with my k into an IRA LLC. This is hands down the best ay to jailbreak your retirement account:.

I recently started using Personal Capital and really love the tools. It shows a nice chart plotting growth of the assets with time, along with expenses. On my blog, I have one of challenging goal is to maximize my K and Personal Capital may help me how to optimize it. We adjust to our k contributions very quickly because it is pre-tax, and we never see it in the first place. The dollar amounts in here look ok, but is it really K — 3. How do you account for future taxes?

Not sure why so many financial advisers fail to account for the embedded tax on these dollars. That is my biggest issue and concern. These are pre-tax dollars. A future increase in tax rates is definitely a concern. You can spread it out over your remaining life and strategize accordingly. You can also consider investing in a Roth IRA or Roth k and pay taxes now if you qualify, to avoid paying taxes in the future. One of the best ways in my opinion to grow your IRA, is by converting it to a Self Directed IRA and investing in real estate and or houses.

This is a technique not to be used by people who have no self control or good spending habits, but if you are savy and strict, this is a great way to create wealth. If anyone has questions you can visit our website FindFundandFlipDeals. Some of the companies that do them are Equity Trust, and Security Trust to name a few.

Id be interested to hear what others have to say. I think you may be focusing on the wrong thing here. Looking only at the k limitsimplies whoever set those limits must know what we each need to live on.

If someone has paid off there mortgage and any other debts by the time they retire, they may not need as much income as someone who will be still paying on those debts. I would like to travel. But I could just as easily do that every 5 years and go car camping in the in-between years. Let me clarify that. Then I need to look at what higher expenses I may see. What jumps tyo mind is if i have more time on my hands, would i do activities that cost more then what I pay out now?

I welcome your attempt to create a chart to fit your needs and what you think is right. Just shoot me an e-mail. Personal finance is personal. This post is just trying to provide some guidance for those wondering how much they should save or whether they think they are on track or not. Anyone who thinks you can live anyplace in the US and not have a car except NYC, with a 24 extensive mass transit system is delusional — how would you get to work!

Saving it great, but not a reality for most Americans. Lets stop beating up people for not doing what is impossible. I strongly believe that if more people followed this rule, more people would have much healthier financial lives. Or how about car pooling? Why not live closer to where you work? My AVERAGE salary over I now get the opportunity to invest my money in lesser amounts on stocks that return a higher annual yield, so I should be able to make up the REAL, not paper, losses and maybe end up with MORE for retirement.

Of course, I will retire by then, but you get the drift. One always SHOULD diversify, but I believe if something bad happens to ExxonMobil stock, you have got much more serious issues to deal with than retirement. WHERE DO YOU THINK MANY PENSIONS WERE INVESTED?

When you have no other choices, you do it. If you have to take a 2-hr bus ride to work each way and eat boxed macaroni and use the internet at the library and give up your cell phone, you do it. Either save now or pay later. Nobody is going to help you. You have to help yourself, and the sooner the better. We started early, blue collar worker but we sacrificed thru the years. Exactly — and remember that 51K median is HOUSEHOLD income, which is usually two earners. Which implies that the median individual income may be around 23kk a year.

Is it possible some many individuals have multiple ks with different employers over a lifetime. Therefore i wonder whether the average k balance reported here may be misleading. That is definitely a possibility that multiple k accounts serve to LOWER the average k balance. Thanks much for a very useful article. I agree with many comments above given parents with one child making k a year fresh out of college, with student loan debts plus expenses.

It takes a lot of spending discipline to put away some money in either ESOP or K plan. As we mature further into our life, career, our children education, retirement etc…..

I have also learned, just putting your hard earned money away and hope for the best may not work out so well. We must learn how to manage in term of risks taking while at young ages and smart diversification as we get older. With commitment to raise and to provide our three boys with at least a Bechelor degree or 22 years each now 26, 21 and 16 it takes not just hard work but serious money management, investing, investing.

I have planned to retire at 56 or 57 post our youngest had obtained Bachelor degree. This will give our oldest Son some additional ammos to save and invest.

Wife is 38 and entered workforce later. Together, we have about k saved. Our combined income is probably k. No credit card debt or anything like that. But wife has significant 40k student loans and I live in an expensive part of the country. We live very modestly. Our home is very small and our 30 yr fixed is 3. She also maxes out a Roth.

Our home needs major remodeling. And I could find myself unemployed for a stretch. The reality is that people like us, not rich but not struggling, find this kind of savings rate unattainable. Sir, you are indeed broke. You just need to admit to what kind of broke you are…house broke? Please get your financial priorities in order! Stop the and only invest in a matching K up to the match.

Then focus on eliminate the student loan. If you are driving anything brand that is considered luxury such as, but not limited to, Audi, BMW, Mercedes Benz, Lexus, Infinity…etc, then consider down grading to a Honda or Toyota. What is a small house? I have a feeling that your are lifestyle broke and have a problem with admitting it. He said he was sitting on a lot of cash because of his job situation being tenuous. What did you not get about that? Day care is expensive..

Your savings look larger than they really are because your table does not take inflation into account. Using with your ending numbers and adjusting them for inflation: Why do I ask? My husband does not have a retirement plan at work, so I have to make up for it by maxing out mine, and then maxing out our IRAs.

I am 57 and will retire in December thanks to my K. From a young age I taught my children to do the same. I guaranteed them that if they followed this strategy they would thank me when they turned Financial independence is not determined by how much you make but on how much you save.

I started to save at 32 yrs old in our k, ira, annuities and real estate. Some of the replies from younger commentators astound me. Do you think you have a choice? You either save the money or you end up suffering.

My home is that by showing younger folks the power of savings, they will get motivated to save more. Kids likely could have done better buying bonds. Plus factor in the risk of our ever so volatile stock market and how it is more and more becoming a game and electronic trading ground, younger americans may want to look at a ROTH and other asset classes for their money, not just the K tied to the market. The under 35 crowd have seen no returns, hence the dissent.

Wait, Financial Samurai, you said you had mutual funds with high fees? Or did you just say mutual funds with high fees for the effect, when in reality, you chose your funds very carefully a long time ago….

Yes, I had invested in several mutual funds with high fees before discovering Personal Capital two and a half years ago and running my k through the free k Fee Analyzer.

My Fidelity Tech Fund had a 1. No offense, but Financial Samurai lives in a fantasy world. The kid graduated from a top school and began his career at Goldman Sachs in NYC. I quote below his response to a guy who has to drive to work:.

However, not everyone lives in a big city with easy access to public transporation. Living closer to work? That gets expensive buddy. Give me a break. I applaud your ability to make a ton of money after the dot.

No offense taken Jon. Thanks for your perspective! Forget about what I did before age I decided to pull the rip chord and try my hand at entrepreneurship by resetting to 0. I wanted to see if I could do something on my own with my own two hands. And I still take the bus into work every day. These assumptions are ridiculous. The only people who have starting salaries high enough to contribute the maximum besides professional athletes and movie stars have advanced degrees and professional degrees and are age 25 and over.

I am 22 years into my career, two degrees in computer science, and I am still not able to even contribute half of the maximum of my k each year. These assumptions are incorrect and unrealistic. Most importantly, who would be crazy enough to work from age 22 to 65 and give up the best years of your life to SLAVERY.

Few people have a labor of love. Most work in a stressful, slave-like, boring, repetitive, predictable job! One does not need a ton of money to do this. These figures in the millions are ridiculous and greatly exaggerated.

When you work you are not a slave — you are a servant. You have a purpose and you make an impact on the lives of others and make the world a better place. Who is more important to this world, the offspring of a rock star who spends their lives going from party to party or a janitor? I agree with the above poster. I used to drive to work with chest pains thinking about what I had to do. I for one found the post and table at very least interesting. It is hard to satisfy all or write something that covers all or most situations, so thanks for trying.

At 46 like myself it is sometimes hard to know if you are on-track to actually retire in 20 years. This lets me know I am within range, but lower than I need to be. I have heard about having somewhere between 8x and 20x your ending salary saved for retirement, but it is hard to estimate 20 years in advance. When I was in the military for 11 years and raising a family I was not able to save much in an IRA. Now later in life I am able to contribute to a k with a match and have become very aggressive as of late seeing the end goal of retiring getting increasingly closer.

I maximize the I understand how fortunate I am, but have worked very hard to get where I am today, just wondering if I can continue to work so hard for the next 20 years, paying off mortgage on-plan to be paid off in 10 years , bills, etc, and land on a reasonable income needed for retirement.

I continue to encourage my kids to save and they are starting to take it seriously, but I do understand that it seems daunting from the on-set. This article lets me know that I need to apply myself more to saving today as well as continue to push the importance on the kids.

Old-me and old-them will thank me one day. The assumptions listed are too high for many individuals and families. Based on my 33 years of experience in the financial business, sometimes a simple plan makes sense. But utilize resources and listen to experts. Hey, some people may want to use this article as a general guideline or as a kick in the pants to save more, but not everyone should take it to heart.

I drive a car, but ride my bike to work most days petrol is expensive! It took me 3 years to save for a Hawaiian vacation. Of working too much? Of not having any fun? Of missing out on life? Like I said, life is all about balance. You gotta be realistic with the average American. Few can save like this few earn the money to be able to while many live beyond their means, assuredly. Being mortgage free for the rest of my life is a relief. I hate owing money.

I think practicality has to be used when planning retirement. I think people have to look at the general picture of their lives instead of dreaming of big numbers. Depends on life, the market, work, world events, health, how long I live….

The first chart is absurd, and shows how out of touch retirement projections are with economic reality. Also if you have been watching the news lately, you would realize that economic disparity has been increasing. Very few will meet these requirements in the aggregate.

I am glad to hear the stories from the outliers on this site, if their claims are true. It allows the rest of us to feel bad about ourselves and our situations.

When this country took away pensions, it replaced it with a model that is unrealistic. I am interested in your opinion regarding how a military pension will factor into the amount of personal savings.

I am 43 and eligible for military retirement in Aug So what does a person who has been disabled and unemployable for over 35 years do to catch up? At 58, I am going through an intensive rehab to get back into the workforce. The thought that I am nearing retirement age but have not worked consistently is depressing and frightening.

The chart is depressing. The reality is that many of us will live like paupers, looking to a bankrupt government and a broken healthcare system for what meager assistance they can provide. I always tell the new people coming in to the job, save at least the match amount and increase your contribution with at least half your raise. No debt and weekly dividend income allowed me to retire at Graduated HS in Just retired last year at the age of Have net worth of 2.

Yes you can do it. Start saving the day you start working. Work harder than all your peers. Save all you can. Leave your nest egg alone! After about three years of contributing to my k , I borrowed from it, which, well, you can just imagine the impact that decision had on my retirement outlook …. Yep, with that money I bought an engagement ring. Then, when people shifted to conservative investments in and , we dumped all of our investments into stock while the market was low. My wife have contributed to Social Security as well as k , b and pension funds.

We will expect all four of those to fund our retirement. Will we live in a swanky retirement community? But swanky retirement communities are boring. How To Convince Your Spouse To Work Longer So You Can Retire Earlier. It would also be foolish to rely on Social Security as well. That will make no difference to the Government and could perhaps land you behind bars. I think it would be much smarter not to figure Social Security into the equation. You assume 8, the first year out of college when the average starting salary is sub 30, before taxes and medical.

Is this difficult to put together? But whatever the vehicle, these numbers make sense to me for total retirement balances. We have to aim higher. Buy a lot less house or car than you think you can afford. Good luck to all! Feeling much better after looking at the actuals. Our government can and will rescue anyone and everyone regardless of whether it was their fault or not.

Bailouts are the American way, and I do believe America is gradually turning into Europe. Europe has consistently the happiest countries in the world! What did you invest in to lose more than the market decline in ?

And how is your portfolio now, given we are at all time record highs? This is where a financial adviser, or having a diverse portfolio really helps weather the storms. Not easy in the SF Bay Area, but frugality makes it possible. My biggest problem is trying to decide what fund types to build my investments. Seems to me that it was the perfect time to buy.

It is just the price per share that goes down. Seems to me the perfect time to buy. So when the market rebounds, you make some serious gains. Remember the old adage… Buy low, sell high! The general information given in the article is spot on.

Personally I do not have a k or IRA. I have been diligent in saving and own two properties, one income producing, with the plan to close on a 3rd aid the first of year. I guess the point if this long winded post is to be diligent in saving and diversify yourself. My husband had some of his k contribution returned last year; the non-highly compensated employees had not participated at a high enough rate.

Eventually, the top executives at some companies will see that they have to give incentives to their staff to participate, and that may help the numbers. The numbers you have for ks are probably vastly skewed to the low end. The vast majority of my retirement money is in an IRA that I rolled over from ks of previous companies. To have a realistic number, you would need to include ALL types of retirement accounts.

Inflation over time will make that 40k into almost nothing after a decade or more of retirement. If one is in the range, which you say you are, then you are doing great.

This is eye-opening, and disheartening! Luckily, we are living at home, and I have paid off all student loans, car, etc. Much of my cash was indeed squandered on MacBooks, HDTVs, media entertainment, etc. Is this realistic and the solution to our poor start? Please let me know as I would like to sit down with my cousins for a financial planning discussion. Take a look at the BRICS nations plans on forming a cohesive union to dismantle the dollar. Moreover, if you think the act itself of obtaining money from savings impossible, ask if they agree in the EU particularly in Cyprus.

Tangible assets, international savings and alternative currencies. This completely violates the thoughts mentioned in this write-up. So, the theme really should be to maximize your long-term well-being. Surely, us non-finanical advisors should certainly be educated. I just think the worst people to be educated by are financial advisors who reap rewards on you placing more in to the system they benefit from.

It means you should not blindly trust the level of your contribution amount to people who are paid more if you contribute more. I think you might be forgetting a small fact though. The financial industry has trillions of dollars worth of savings that they will lobby to keep untouched by the government. This is the same industry that got nearly one trillion dollars in bailouts. If they can get that kind of money from the government by lobbying they can certainly keep that much money by the same means.

But I have some unique excuses. In , we had a crash that took half of my k. I took that half of my savings and invested in rental properties. They did well until They still pay for themselves, but not too much more. The real threat is privatizing social security. If the very rich make that happen, there is no future for anyone in this country.

Look at current savings rates. Very few can or will save enough on their own including me. I think before you can bash SS and the government, you need to disclose how you are doing with savings.

We had a brief period where people could depend on three things for their retirement planning—personal savings, Social Security, and a PENSION. Couple the dismal savings rate in the United States with the catastrophic projections for Social Security, we are facing a huge social crisis. But a big risk comes from those who do.

I started my career in and married in My wife and I both have college degrees and we live in the SF Bay Area. From day 1, we have maxed out our K contributions. When we had children, my wife did not work when they were young so she was unable to contribute, but I always did. We bought cheap cars, a modest home, simple vacations, all while raising three children. We will both turn 50 next year. Our K combined balance is 1. Consistent and smart investments and management of those funds really does pay off.

You can save all you want it matpy not matter! I saved over k by age My wife divorced me and took aphalf of everything and now gets 45k a year for life while I am out of work an will be living in my car soon. I plan to work 2 — 5 more years and then do something else. Not until my health gives out. I think working is fun! Next time I will work for myself. I have a degree in Fine Arts and plan to do that full time. It is what it is. If you are saving your income into a K and health care investment plan, subtract that from your income.

You are making less money. Plus investment plans carry a BIG risk. You can loose it all baby Saving early and often is key. Personal Capital should consider mentioning the use of an immediate annuity in retirement to protect against longevity risk for a portion of their portfolio. He should have gone up garret at once.

One saves because one wants more security and freedom. If one already feels secure and free, then the urgency to save is less. This may be one reason for the under 30 crowd having a more negative reaction. It was painful to have to sit in class from 8am — 6pm on Saturdays the first year, and 9am — 5pm for the last two years, but it was worth it.

However, even at the risk of sounding like a naysayer, I have to admit that I think this outcome is in fact unrealistic for most Americans currently 22 to Very few people I know actually graduated at Most of them had to work and attend university. As a result, they may have finished with less loan debt than could have been possible, but it took much longer.

I have at least one friend who graduated free of debt, but it took him seven years to get a BA. I started college at 17, but I finished at 23 because of financial hiccups and moving across the country. I was fiercely dedicated in high school, and I finished in the top 10 of my class, but I was only able to secure a partial scholarship and some financial aid.

I studied and compounded my credits too much to work, so I took out loans for the residual fees. My loans are all paid off now, at 30, but I have no retirement savings. After graduation, virtually no one I know was able to secure a job that paid enough to contribute what this article says is the minimum.

Most entry-level jobs pay peanuts, and a good amount of them do not offer much in the way of benefits. It took years for most of them to find jobs that paid even decent salaries, let alone offered any help with ks. Most of them are only now able to start saving. For me, specifically, I also had to be patient.

I have little to no credit card debt, no outstanding medical bills ATM, and I eat like a college kid. Working full-time, freelancing on the side, and putting away most of what I earned. I get no return, but I do earn it throughout the year. Not without deferring all semblance of a life.

I go without most of the year, and I only go on one vacation a year. If the figures in this article hold true, I will likely never be able to retire. I know that the year-old me will want to live and have money. You can only really experience this world once. As a CS major, what are your thoughts on moving to a place like San Francisco where such majors with experience are in SUPER HIGH demand? Just check out angellist. Sam — well done. People can save money with it, but that money does need to come out of their take-home and go into the account to make a difference.

For anyone that thinks they might want to retire one day or leave a legacy to grandchildren or children; or even just protect against health or disability risks at later age , then they need to be acting — not just thinking — on this topic seriously.

This is a great article. I think the non-saving mentality is a huge problem. A first or second year out of college grad can save boatloads by living at home and not spending at the bars and restaurants. Also could get a part-time job. Tutoring, bar tending, retail, etc. Assuming someone can save By that table I should have somewhere close to k in my retirement savings at this point in my life.

First job out of college, just turned 22, and I am making 55k. I have a 6 month emergency fund already. This chart is unrealistic, I make 30, a year and have school debt. I am 23 btw. How long have you been working and saving? Anyone would understand that any single chart like this, covering ,, people, is just informational. It is just a rough starting point.

However, the point of the chart is that YOU make your own decisions. If you make the right decisions, you can achieve the results on the chart. In essence, that means others who DID sacrifice and save will be oppressed and taxed out of their savings to pay for those who did not save or sacrifice. I lived on the same planet as the rest of you. I made all these sacrifices and more. I have not had ANY debt since the divorce, except a mortgage on the home we just sold.

No debt makes a HUGE difference! Decide first WHAT you want to achieve, then set out to make decisions that will achieve it. IF you do, you will hit, or come close to the goal.

Keep your hands out of my retirement savings!! I am 23 and just graduated and started working. I know nothing about finances except that the money is for having fun and enjoying the life. However, my mother has very good grip over it and I do not like to be always talking about money. With this background let me explain why I am here. I started working in the middle of August Should not be they same?

Does it mean that I might lose money? I might not have used proper technical terms. I actually do not understand how it works. Do I have to choose how and where to invest money even after contributing to k? As per my understanding you forget about the money until you retire. Please help me understand in plain and simple language.

I do not talk money language. Thank you all for reading in advance. You probably lost money through performance or through trading fees. No kids and no house for now. I have about saved. And the fact is that many people are so clueless about financial matters that balancing a checkbook is challenging, let alone choosing among various investment options. Do you feel good about a retirement savings plan that is based upon bankrupting the unborn? I came from a blue collar family and graduated from a state college in With help from the bank, I bought my first home a year later.

My wife taught for a nine years until the second kid arrived. We have the first child at a private university and she will have no debt upon graduation. We have another still in high school and he will leave college debt free as well.

We have not had a car payment since We vacation a week or two every year and eat out a few times a week. My K exceeds 1 million as of this year and I am 48 years old. I am not bragging, but I know that it can be done.

We keep about a years salary aside from the K to guard against job loss and such. I am concerned that the politicians will make us pay for our lifetime of living within our means when we start withdrawing it.

I have contributed the maximum amount to my k for 20 years. I am 59, I did not have access to a k until I was I started working for a generous financial services company. I put the max in my k account as soon as I was eligible. Was it easy, NO. I made it a priority. I worked for 28 years, until I was forced into retirement. Your chart is very realistic and achievable.

I loved my job, but when they kicked me to the curb, I was ready. I volunteer, I excersise, I travel. I do all the things I wanted to do while working 50 hours a week, but was too exhausted to do. Too many people under 40 are not saving because their priorities are flawed.

Then, whatever remains, can be go for frivolous consumption. This approach requires discipline — a trait that is eluding generations X and Y — Quico. I guess we are on the low end, or pretty close to it. I retired 2 years ago at age 55 and my husband plans to work for a couple more years. Our home has no mortgage, and we will not have any debt after the real estate is sold next year.

Realistically, this will never happen because the vast majority of Americans are consumers and are willing to borrow money to get what they want now and not wait. Another irony I see and have witnessed many times. Most elderly folks will not spend much if any of their retirement savings. It means more to them to have the security of having a large sum of money than to spend it on anything. They die with it and leave their children a nice inheritance.

There would just be a dip as the economy stopped running on borrowed money and returned to pay-as-you go. Kind of like when you cut up your credit cards after always paying the balance in full each month and then need to spend a month or two paying off the float that you were putting on credit cards each month before you can resume you previous spending levels. Especially those in the lower earnings brackets. The car is of course many peoples mistake on how much they spend. Here is also another post to read, How Much Should I Have Saved By Age?

It highlights pre and post tax numbers. Setting financial goals at an early age, having the discipline to save and making some small sacrifices. Good book to read: The Millionaire Next Door. I believe that if more parents and schools taught kids at a young age like mine did that saving is important, more would be in a better financial position. We are greedy Americans who want to look good and feel good.

I look back on my life and am very grateful for being constantly reminded by my parents to SAVE. That amount increased with each new job and with increases in income.

Then I set goals as to how much I should save. My income averages well below what most make but I know that discipline truly works.

What you are advising is that everyone bunk down with roommates, sock lots of money away—fund managers need their jobs—and then low and behold, magically you will have a K at retirement.

Of course, if something happens before your magical retirement day—and the list is long—illness or even death—then lucky you, you got to work all your life, never experience a vacation or something fun, and gee.. It was a lot more solid of an investment than a K that can go up in smoke with flash crashes on Wall Street.

The numbers that matter most are, how much you need during retirement and for how long — and how are you going to achieve that. Otherwise how much in your K is totally irrelevant. How much you have access to -total net worth and liquidity is what I think most important. A bunch of money sitting in a K getting eaten up by inflation might not last as long as money that is invested. Then again, money that is sitting in index and bonds might dwindle to near nothing too, crashes happen, and like global warming, are getting worse.

Pensions are subject to default. Tough reality to accept, but I have not seen any way out of it. And my numbers are well aligned with those above. Given that, just stay calm, and work on. OR be completely broke, go on medicaid and live in a home. I did not contribute to the K when I started work right out of college.

I did not know anything about finance — period. However, I did learn from a former co-worker who has since retired and he taught me about investments etc. There is no better feeling than to have independence from a work place when you are in your 50s.

The job market these days are getting more and more volatile. I am 51 years old, make about 70K a year have three kids and my retirement savings is K. I have done nothing amazing except to follow the advice of people like the one who wrote this article.

Anybody can argue that their life circumstance prohibits saving but it is all a matter of choice. Soon I will retire before age 60, have over a million in savings so my wife and I can travel the world for the rest of our days. Might want to do some quick math on your retirement. Basically, I was borrowing for student loans while saving my earnings.

In addition, I have invested in real estate. By the time I was 40, my net worth was more than my total lifetime earnings and I was worth over a million despite a modest income. I married late in life and sadly can no longer claim I am worth more than my lifetime earnings.

They will also not need to wait and have their money dribbled out to them over the years and will be able to leave their K account to their children if they die early.

The K is a ton better than a pension. The trouble is that people do mess with their K accounts. They withdraw money to pay down credit cards that they then run up again. They decide at 45 to start a business and use their K to bankroll it. They take out a loan from their k to take a vacation or add on to their home and then never pay it back. There is nothing wrong with Ks except that people have the ability to pull the money out for stupid reasons and, even though they pay a big tax penalty, they do so.

The program is badly designed and will leave most people impoverished. We need Social Security more than ever. First of all, the assumptions made in making the chart were ludicrous. And that money goes away when you die, so if you die at 64 you get nothing. How has that worked out for you during this long period of unprecedented low rates?

If we do get an interest rate boost, it will because the economy heats up. So any increase in rates will be offset by greater tax revenues. And SS is going to save my generation from abject poverty. For current retirees, only the poorest have just SS to fall back on, but in 20 years, that will be all there is for most people because the k experiment was a disaster. The answer is you invest in low-fee growth stock funds like index funds and hold them for a long time.

And even if they do miraculously keep paying at the current rates, it would be dwarfed compared to the return from a K. No one can predict how the markets will go, what health issues you may encounter, or whether job changes will adversely affect your income.

The other calculation was compounded continuously, thus the discrepency, and I agree that I should use annual instead. This is just using his assumptions of 43 years and someone starting at 22, meaning retirement at 65 or This is not inflation adjusted, but then neither were the numbers in the article.

How many of you make over $,/year? - I Will Teach You To Be Rich

Still, it is a lot better than his table. Would you suggest putting in more than that if I am 22 and will begin to get my MBA. My company pays for 80 percent of my MBA which will still result in me having to pay approximately k out of my own pocket. Would you max out your k still in a situation like this? I quit putting anything into my k after the certain government officials started talking about confiscating them at some time in the future.

I had to tap into my retirement savings in my 30s to care for a terminal parent. I live in the studio apartment on the ground floor for free as the rent from the other apartments cover to mortgage, taxes, and insurance.

I have been working for about 16ish years including college and including those college years, I have only had access to a k or retirement plan for around 6 of those, optimistically. This assumes it is even an option. Even better would be to offer tips for those of us without access to employer plans. It is not just service or retail jobs that are impacted. Seriously, you can still contribute to an IRA or a Roth IRA as long as you have an income from work to cover the contribution.

Beyond that, you can always start an account at Vanguard or another fund company and invest in index funds. Joe was the type that saved as much as he could and worked hard for every penny.

He did this by living in dumpy apartments and driving broken down cars. He was content watching TV on the couch and seeing his savings build up. Matt worked hard and played hard. He lived in a decent apartment down the street from his favorite bar which he used a time or two to get lucky with the ladies. He was conservative with his money but indulged on the weekends and took annual vacations. Fast forward 20 years later.

Joe is retiring in a few days and ready to spend all that money he worked hard for. He buys a house on the beach, a boat and of course a new sports car. While Matt is at the reception dancing with his new daughter in law Joe has been hit by a drunk driver. Matt is now joking with his son about tips on a successful marriage. Joe lays on the operated table unconscious. His mind is looking for something, possibly a memory to give him enough strength to wake up; to fight death and continue to spend all he is worth.

Matt sits in a rocking chair on the front porch of the only house he has every owned. His granddaughter in his lap. Every life has its own journey indeed. But I do believe there are suboptimal paths to take that will lead to regret if action is not taken now.

When that stupid program came out, all i could think about was all those perfectly good used cars being junked. That of course meant less inventory for those of us who purchase used cars. I always said that ridiculous program was only a benefit to those who have disposable income.

My wife and I earn comfortable, but not extravagant salaries under six figures each. Each of our retirement accounts are at or very near your high end chart value for our respective late gen-x ages. Responsible spending choices and automatic contributions really pay after compounding. So the chart is far from laughable, it is achievable. How much would one really need if one wants to retire at 49? Do one need to have at least 1.

Most people would need to work till they are 65 or longer to accumulate that amount. The question I have is would 1m be enough to retire on at the age of 49 if the assumption is that one would live to the ripe old age of 98?

Do you own your home? Have any other debt? Have a company medical subsidy as part of your early retirement? Expect any pension from your former job? How much of that million is taxable Etc. If it were how much you should have then the chart should go the other way with the youngest needing the largest amounts. In addition, how much each person needs depends on how much they spend. The most important thing is to have a plan that works for you and that puts you in financial control of your future.

As a total package, we are doing quite well. I had student loans and needed a car for work. My short-term savings helped pay for my grad school. Much of my K is in a Roth account — contributing post- tax dollars means effectively putting away even more than the equivalent for a traditional K — Whether or not you have children is a HUGE one.

Nothing is worth more to a working mother than knowing her child is being well cared for while at work. When you have a family, many of us also tend to spend more on things such as health insurance, life insurance, accident insurance, etc.

My husband and I work very hard and live a mostly modest lifestyle. That plan is personal but saving should be very intentional. The bottom line, I feel is save something and take advantage of a company match, if offered. While you may always have an opportunity to make money, if you stay in good health, you will never have the opportunity to make more time.

Katrina — You have expressed one of the most grounded, balanced, and realistic outlook on life and finance that I have ever seen on financial blogs and from a young person of your generation.

However, the conclusions drawn in his admirably idealistic but inherently dogmatic scenarios, often fall short to impress those who routinely contend with a spectrum of day to day life issues similar to no one and constrained to no formula. I am 58 years old, married with two children.

Since the time I immigrated to the U. The first ten years of my life I worked hard, played well and extracted joy in assisting many others close to me to achieve their potentials.

Noteworthy achievements were building a career, credibility and trust among peers, but most of all life memories in places and with people. From then on building our current financial networth was simply tweaking some priorities and rearranging our focus — we already had all the assets and ingredients necessary to grow our wealth. We focused our talent, energy, and imagination on establishing a business that satisfied our passion for helping others, while also targeting for rewarding jobs in our professions.

As Katina said above, plans are personal. No two journeys are the same, and if you happen to fall short in Sam,s charts, there are unlimited ways to complete your financial picture and even exceed your happiness threshholds.

6 investment options for the retired

Use some imagination with realistic planning, temper them with sincerity and hardwork and let things sail towards your very own and unique destiny. Effort to reach an ideal target need not be constricted by any particular timetable or method, but rather expanded through infinite pathways in a perpetual process.

I would love to see the savings numbers and expected amount saved broken out by gender and location. Here in Utah, it has taken me 20 years of work, with a B. The good news is that goods are lower.

But, it takes us off the mark in terms of actual dollars saved. Utah has the largest gender gap in the nation. My performance reviews are consistently high, I am well-respected in my field, and I have had job offers out of state. But, I am female and have stayed in the same location to provide stability to my children and maintain medical insurance.

But, that certainly pinches even the most frugal of families. I have learned to live frugally. I was hoping to retire in another 10 years. The return on [the right] college degrees can be formidable, but remember that SS is progressive. Not everyone needs to be a millionaire when they retire, in order to have workable retirement.

This is pretty unrealistic, based on my experience. I am 45 years old and manage IT for a major organization. However, the first 10 years of my career, the small companies I worked for did not offer a k.

When I found a company that did so many years later, there was still no match. I only know one guy who can pull that off, and he is 47 and lives with his mother, had no house payment and no kids. Started k at age I drive a dependable truck and have a luxury car, and a Harley Davidson custom, all paid for and paid off early.

I feel I am ahead of the curve yet I still enjoyed life with boats, dirt bikes, Harleys, swimming pool and travel. You see you have to start where you start and never give up trying to do more, have more and you know what you will get more. No way I work past Put more in the bank. It is a figure that changes. Keep doing what works. An interesting article and some insight to the retirement issues.

Who is going to pay their retirements? Time to start pushing back and re-evaluate welfare, false claim SSI disability, and other free handouts to the lazy. One thing that this article assumes is that everyone needs to be a milliionaire to retire comfortably. This is just not the case. My wife and I plan to live a simple retirement life. We plan to do sim ple,, free things, and just enjoy NOT having to do anything.

My wife and I own everything: So, we plan to sell our home when we retire and buy a smaller townhouse and pocket the difference. I only contribute for tax reasons. Mhy dad had it right: I dont know what economy they pulled that chart from.

The last 7 years of my k laid flat under GW Bush wartime economy and almost delayed my retirement. Had it not been for a small inheritance to go with my k I would have been working until I was So, everyone assumes that no one will get sick. No homes will be purchased.

No repairs will need to be done on homes. No secondary degrees will be sought after that require thousands of dollars. No kids born will go to college or need to go to daycare. But what life are you living? Because my life suggests that there are more important things to take care of NOW rather than hoping I live to retirement 30 years down the road. So, my family starves NOW so I can live comfortably at 67? I think there need toe be a balance in life. For those who are more concerned about life 50 years from now so much that you miss out on your current life, more power to you.

How about companies paying a living wage? People have to live, let alone thin about saving a large portion of their puny income. You are not alone in your opinion.

The Average k Balance By Age

Austere saving for the future is not something everyone can do. I look it the same as yourself. You must must deduct the money you are earning from that that you invest into a retiree investment plan. Throw in a Healthcare investment plan and you make even less. All are financial scams by the financial industry to get your money to invest and make trillions of dollars.

Heck, some of them might even be breaking laws and cheating insider trading, etc. Could that be thinking of the financial crises? Making money off your sweat. Yes, some folks have saved and done well. A gentleman that wrote previously reminded me of my neighbor. He also has a double income. His spouse makes as much as I do. And that makes a huge difference.

We do have pensions, btw, so we are better off than most. Of course you still have the option of still contributing to other retirement plans as well. On the other side of the coin, those in the six figure salary range have no excuse including the tax benefits of isolating pre tax money. Be very careful, Pesonal Capital will ask you for access to your IRA accounts and bank accounts.

I have found that investments in k plans tend to be more conservative than they pretend to be, and as a result do not grow as fast as other investments in the long term. While I have maxed out my k every year since the year I graduated with my Masters degree, I have found that the money that I put into Roth IRAs has grown at a faster rate than my k. Do you have any comments on k vs Roth IRA contributions?

I have been maxing out both since which probably puts me a little higher than the maximum on your chart. Should I start contributing less??? I paid for college for one and the other went to trade school which I paid for as well. I was disciplined and every time I received a raise I increased the k.

I stayed on top of my savings and knew what was going on in the market. Today I am making more money than I ever thought I would without a college education 70K.

Excuses are easy results you have to WORK for. And oh by the way I drive a 15 year old car with K mile on it. Saving for retirement CAN BE DONE quit making excuses! This schedule is so out of wack, what 23 year old can afford to put 17k a year in their k? Here is what I wrote to my daughter about this article when she sent it to me. It did make her think about putting money away:. The person writing this article does not live in the real world.

I believe certain oil rich countries are like this. Maybe you should have earned a degree as an oil field engineer. A new car is nice, but it will depreciate in value and it is expensive to maintain. I laugh at the guy who takes his bonus check and buys a new BMW. Put it into something that gives you some kind of return not a money pit. Actually, that had a pretty good return after all. That means you can save less and still achieve the high end of the chart. You should read some of the comments.

The other thing, Sam, the person writing the article not sure if male or female has an undergraduate degree and an MBA from Cal. I propose that k s have a subsidy.

Since companies eliminated Pensions, they have record profits. This way, all workers would be able to retire at some point and Wall Street would be super happy at having more people to steal money out of their accounts. I did not start working until I was 29 as I was building my human capital in graduate school. I began saving with my first paycheck. I still contribute the max including catch up contributions.

I plan on working more years because I like my job and co-workers. I can also whack the mortgage to zero over that time. Central Scrutinizer, You are truly in rarefied air. Do you realize that 1 in 3 Americans have nothing saved…. To have saved that much, you have been extremely fortunate. You are also lucky to not have been outsourced as soon as you turned American workers have been crushed by Free Trade Agreements, elimination of Unions, and tax policies for generations.

You got a pension? You are so lucky. Wages are not that high for most jobs now. Thanks to Trickle Down Economics and Anti-American Free Trade Agreements, we have very few high paying jobs left. You know how it would be possible? Mommy and Daddy paid your entire Undergrad degree which means you had no student loans to pay back not in my case.

You also lived at home for free all those years or Mommy and Daddy paid your rent which unfortunately is a common theme and I also did not have that luxury. You might say get a roommate which I did and mostly everyone does or move to a cheaper area. I was born and raised in Northern NJ and have worked in NYC my entire professional career. But then again, no country is perfect and this is why allot of Americans are now retiring overseas, but this is a conversation for another day.

Within five years I got married, bought a used car, rented a small house all the while increasing my savings amount. Your analysis is dead on. It is now 35 years later, and during that time we put there kids through college, paid for two weddings, we own our own home and we enjoyed a couple vacations every year. I preach exactly what you are preaching to everyone I know.

I am now 58, will retire this month and my wife and I are starting the next phase of our life … traveling the country in our 38 foot RV and taking three or four Caribbean cruises a year. Live can be good if you plan appropriately. My youngest son bought into save early and often behavior. I think that he is actually surprising himself. My other two children, er, not so much. Is this for per indivdual or per couple?

I did not have access to ks until my late 20s and my pay was prettly low most of my career. I did not earn enough to max out until my 40s. I was floored when I first projected my Roth k and Roth IRA balances. And I plan on receiving only the RMD and passing the rest to my grandchildren. And the RMD is , at 65, 1,, at 75, and 2,, at I was always an investor. But then my first wife a stay at home mom decided she was not happy — low self esteem. We sold the house. She got most of the money.

Our kids lived in an apartment over a bar. Today we have been retired many years. My kids have done very well for themselves.

We want for nothing major. The bottom line is get to a place where you are happy and have some money with a good roof over your head. Know what is really important in life. I did not have access to a k at 22, just got out of college during a recession.

I have since maxed out the k contribution and am on track. I think what should be taken from this is to start saving, whatever you can and increase as you can. You would be amazed on how much you can save by doing it a piece at a time. What happens when everything crashes.

Corporate Profit Margins vs. Wages in One Disturbing Chart | naked capitalism

The stock market bombs. Then what happens, Everyone is broke and we have no retirement. What an asinine article. I kept my job, put away as much as I could, have NEVER owned a new car, and live WHERE THE JOBS ARE- in an expensive urbanized area of the country. Can anybody tell me if the cap on contributions to k plans includes the employer contribution?

The limitation is only on YOUR contributions to a k. You need to be careful for those over My first job out of college, did not have a k at all. I was there for almost 5 years and the last two years I begged them to add one. I ended up leaving for a place that had a k. Some people over 50 might not have access to a k. I am assuming that the examples are all based on K and SS only? Or, are there examples that include pensions that some of us were so fortunate to score, along with saving in a K.

I am almost 60 years old. This limited my contribution to less than 2 percent of income so I quit contributing 10 years ago and went into real estate. Zero money for saving because of house, marriage, child. Maybe a lot of other people might have the same story as mine? So, I am guessing this is a plan built for rich kids whose parents set them up with awesome jobs right out of school or pay for their bills.

Sounds like you have an income problem. What do you do? Have you mapped a career path to make more money or set yourself up to make more money in the future? Do what I did — Drive premium used cars, like older diesel Mercedes Benzes, and max-out your K with what you save. Do that for 30 years. Wake up and stop living the American consumerism lie and start living happy by living well within your means. Believe me if we stop buying into what department stores and auto companies would have us believe we could ALL live off 25 grand per year and save the rest!

Forget about it if that person is also paying off student loans. It sounds nice, but not realistic. This article and your numbers are spot on. As you called it in the article, the people with less than low end number in their account are commenting how these numbers are impossible, only ivy league, rich kids with connections, etc…could ever hit these numbers. I went to a 2nd tier in-state university, paid my own tuition working 2 jobs, degree in business, graduated in at age I worked my way up in the company into a sales director position, salary gradually increased over the years through new positions and raises so contribution increased.

For any years old out there reading this; do not listen to all the people saying it is impossible to hit these numbers, There are plenty of us out there that started at the bottom with no connections and through hard work and some luck are hitting these numbers.

Year Age K Def. During the 20th century, the stock market average return was Why does everyone need to play the all in or nothing game. Best advice I could provide, listen to those who have succeeded.

Yes, the employer could add more to the account, go ahead and wait for that day. We could run into another Great Recession. THIS IS YOUR LIFE PEOPLE you are the only one who will suffer. The average supplied from Vanguard is only for the accounts they handle, nothing more nothing less. I have a feeling if you could figure it out, the averages per person would be a lot higher. Some of my accounts will drag the averages down and some will be way above average.

However, if all totalled up, after all its my money, I far exceed the averages. I worked 10 years before k were available. So basically I had to scrimp and scrape and save every available spare penny to contribute what this article states is what I should have been saving…or…. While you are saving your asses off, your life is passing you by. So, to the article writer, I say……. Answer — Almost no one. The result of the fall of the Pension is this: My philosophy is and has always been save as much as you can.

Realistically it is better for one to gauge based on their own situation i. Neither paid a lot which stymied my contributions but believe I will be comfortable in retirement.

The numbers can be achieved! I am 51 and on the high side of what has been published here. I have a good wage, but not outrageous. As they state, it is possible to work like a dog, invest, invest, and invest, and but in the end, it is all about luck.

Invest in the right thing, you make money, invest in the wrong thing and you are flat broke. If you are REALLY lucky you are in good health and able to work. If you are unlucky you get laid off time after time. The chart that shows how much Americans have actually saved versus what is possible, demonstrates how ridiculous the entire subject is. If your investments do well, you do well, if not too bad. To retire in America you must play the stock market casino and it better not come up snake eyes.

Vegas has an advantage over the stock market though, you at least get free drinks. Live while your young , enjoy life you might not even make it to the age to cash out. OK, Doug, you go for it. Your are right on one point. You also just might be wrong in your assumption. My wife and I are 73 years old, have both survived fights with cancer, wife just this summer beat the odds when two different doctors gave up and advised she would not survive a fight with sepsis due to a blood infection, and now she is a double amputee learning to walk on prostheses.

We both sacrificed for years to save while raising a combined family of four sons, helping to provide them with education experience and getting all four established in successful careers. I never screwed over anyone to whom I had obligations. I never took public money for anything, even while being out of work a couple times for varying periods. We own our home and have a vacation property in the Rocky Mountains where we built and paid for a log cabin.