Most Americans find it hard to retire comfortably amid economy downtrend. Some have close to nothing going into retirement, my question is, will you pay off mortgage as a near-retiree, or spread money for cashflow, to afford lifestyle after retirement?
Agreed, the role of advisors can only be overlooked, but not denied. I remember in early 2020, during covid-outbreak, my portfolio worth around 300k took a slight fall, apparently due to the pandemic crash, at once I consulted an advisor in order to avoid panic-selling. As of today, my account has yielded big fat yields, and leverages on 7-figure, only cos I delegate my excesses right.
this is huge! mind if I look up the advisr that guides you please? only invest in my 401k through my employer for now, but enthused about diversifying my investments for a prosperous financial future
My CFA, Amber Dawn Brummit , is a renowned figure in her line of work. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
Annette Christine Conte is the licensed coach I use. Just research the name. You'd find necessary details to work with a correspondence to set up an appointment.
When I was 25 I couldn't fathom living to be in my 70s...shoot, I didn't even think committing to a purchase of 100 count garbage bags was a good idea 😅
I think most millennials and Gen Z are fully expecting to work until the day they die. They are already witnessing their grandparents having to leave retirement and bag groceries in order to buy their medications.
Retirement becomes truly fulfilling when you possess two essential elements: ample financial resources and a meaningful purpose in life. Make prudent investment choices to secure good returns and ensure a comfortable retirement.
Rising prices have affected my intention of retiring at 62, working part-time, and building my savings. I'm worried about whether individuals who weathered the 2008 financial crisis found it less challenging than my current situation. The stock market's volatility, coupled with a reduced income, is making me anxious about having enough for retirement.
I completely agree; I am 60 years old, recently retired, and have approximately $1,250,000 in external retirement funds. I am debt free and have very little money in retirement funds compared to the total value of my portfolio over the past three years. To be honest, having a portfolio-advisor for investing is genius!
The decision on when to pick an Adviser is a very personal one. I take guidance from “Gertrude Margaret Quinto” to meet my growth goals and avoid mistakes, she's well-qualified and her page can be easily found on the net.
So I have tracked my returns since 2007. Total contributions (in this account) of $82,364 current balance is $226,503. Compounding interest works. Outside the roughly $30k I contributed the first three years starting in 2007, I added about $51k from 2019 to 2021. This is the power of compounding interest. I keep this account as a benchmark for my other retirement accounts. The plan is to retire at 63 with a withdrawal that can support a $100k lifestyle indexed to 2018 dollars using the mean inflation rate from present to 1974 on a rolling basis. Also stress tested finaces assuming Great Depression market performance levels the year I retire. Know your finances, folks. A failure to plan is a plan to fail. 49 y/o Engineer who does not want to worry about money when he is old and decrepit.
I so messed up not listening to my dad. He told me over and over again to invest in 2008. I had a decent chunk of change then. Didn't do it. Didn't start investing until 2018. Oopsie.
@@FrugalTeacherFI how do you know their age? If they started saving in 2007, assume they are currently 38 with at least 20 years minimum left to save. Conservatively they should have over $900K if they DON'T even put another dollar in. Pretty sure they will be OK by 60ish.
How much do you think you pit away on average a year to reach that? I'm 25 and just really buckled down this year. Just curious how it went for someone whose gone through it first hand
@@matthewclark4958I can’t answer for him, however I’m in a similar situation at present. For me it wasn’t a set dollar amount that I put away (the amount was what I could afford), it’s what I did with that money which was finding a good investment advisor to invest my money so I could get my best return.
Your question doesn't matter, because the markets change and there is no magic number. Keep as much as you need to be happy/content, and save the rest.@@matthewclark4958
@@matthewclark4958 If you can, invest at least $800 a month and never stop that for 25 years. You can even stop adding any $$ once it grows to a large amount, the compounding will do all the work.
@@matthewclark4958I’ll answer your question. I’m a nurse too. I started with just $200 a month and the slowly increase my 403b and max out my Roth. I have been max out my 403b for the last 10 plus years. If you can max out your 401k or 403b and Roth, you will be a millionaire. Good question.
1M at 47 and now 2M at 53. Planning to retire at 55 in 18 months. Do the work and it will come. Just a Gen X kid who didn't know any better than to save some of every paycheck for over 30 years. The 401k or any automatic plan that you never see the money in your bank account will truly set you free. I didn't set out to retire at all. We only wanted a better tomorrow and gave our future selves a wonderful present.
good job, a couple things many people don't realize or think about - 1)there is exponential growth later on , the phrase "the rich get richer". An 8% return when your balance is lower say 100k is very different than the exact same 8% expected return on 1 to 1.5 mil. 2) when you retire, if you grow a decent nest egg - it's not like you take all of that money out right away. Your money and overall worth continues to grow for awhile because the earnings you make on what you have saved are greater than your expenses.
Love your content! You guys have helped to inspire me to go from just doing employer match in the 401k to 15% there and maxing out my roth IRA this year! Living a bit tighter, but seeing the money start to grow is a great motivator.
At 29 I have a 250k net worth with the majority of that being in my Roth makes me soooo happy. I am trying my best to build wealth for my future family your channel is so helpful!! I try to preach this stuff to all my friends.
I started late at 40. We were working with a single income house and child support so every dollar was getting used. Now 3 years later we are 100% debt free and it's game on for catching up. I'm showing my 20 year old how to invest with dividend etfs where she won't have to struggle in the future.
I finished paying CS last October after paying for 13 years, I added that money into my monthly investment like it never existed, my sons mother actually asked the judge to keep it going for 1 more year, she told him that she still had 10 payments on her new car 😂😅.. he told her he couldn't just force me to pay beyond the limit 😭... my sons 19 now and and puts 50$ month into his IRA
1:08: They wake up... and ask, "What do I do?" They complain -- bitterly -- that the "government doesn't care about us old people. How do they think that we can live on what we get with Social Security?" Of course, the government -- the Social Security Administration in particular -- admonishes everyone (I have it in writing from years ago, myself!) that Social Security is meant to supplement what you have saved and invested over the course of your working years. But people just does that warning away and do the YOLO dance! And when they get old, they complain about the uncaring government. My reply: Show me the government (doesn't matter the type) anywhere that really "cares about old people." The only person who can care about you in old age -- at least as far as your money goes -- is that guy or gal you see in the mirror everyday. That's it. It's not the job of the government to "care about you" in old age! They can't and won't. Period! Of course, being consistent about putting money away is soooo boring (soooo Boomer!).
The Social Security webpage literally says it's meant to cover 40% of pre-retirement income. No one can claim ignorance. But I do support lifting the cap and expanding benefits.
I'm 70 years old, worked for 38 years as an insurance adjuster... I was able to save and invest 20% of my gross income since I was 25 and lived in a condo for 40 years .. the key is live beneath your means and invest the rest... I have social security, pension and a seven figure IRA... was still able to have fun and travel when I was younger..
@@hump1953 you say live below your means. As inflation out paces we have less to invest. Housing prices have gone crazy lately. I'm glad things were easy for you but to us younger generations it's like picking have fun OR retire one day.
@@randymillhouse791 I don't have to prove anything to you. Even if I told you you wouldn't believe me. Go live your life and stop thinking everyone is whining. I just want to make a distinction between the times 40 and 50 years ago and now. Often the older generations don't understand how the world has changed since they were this age.
Corporations and even public employers have shifted from defined benefits and into self determined retirement accounts. It is a boon for the employer and will be a disaster for the employee. Workers, especially the 60% earning less than $100K, do not have the understanding, much less the expertise, to turn $1 into $88. The vast majority under the deferred comp scheme will end up working until the day of their death, and only then if their employer lets them off for the funeral.
I'm always suspicious of these stats ... is that $220k per couple? per account? my wife and I each had multiple jobs during our careers, when we retired we had accounts at 7 different brokerages. I'm doubtful that these stats factor that in
My boss convinced me to contribute to the 401k at Winn Dixie early, Luckily I got another job and transferred it to my current job in 2008. It got up to $15k, but it was down to $10k when I moved it. I know people that lost everything when the company went bankrupt! I now have a 457b worth around $200k. but I've got 9 years to work, and that's a supplemental retirement that doesn't include our pension where we can get up to 90% 0f our salary... plus there is a DROP program
Unfortunately the stat mentioned, needs more context. We know several people who have guaranteed pensions, so their savings are smaller. So the average retirement savings should be mentioned with pensions, retired military, etc.
My parents retired about 7 years ago with about $500,000. They left the crazy high cost state of CA and moved to SC. My Dad always told me the key to a secure retirement is to retire with ZERO debt, including NO MORTGAGE. When you have no debt and no mortgage your retirement will truly be the "golden years" per my Dad. Looking at my folks current situation I now know how right my Dad was! Their mo. income is about $5,000 which includes SS, dividends and a small pension. Think about this. If you had no debt how far would $5k/mo. go for you? With my folks income their $500K is essentially an emergency fund that keeps growing every year (yes, that will be my inheritance some day and will likely be well south of 7 figures). They have never had to withdraw a penny! Do they enjoy retirement? They take several week-long trips every year, they eat out when ever they want, they drive a nice can and live in a beautiful new home, etc., so yes, they have an amazing retirement. BTW, one important decision they made was to leave CA! My Dad is a smart dude! My Dad laughs when I tell him everyone on RUclips says you need a $1M or more to retire. The bottom line is to have NO DEBT and enough income to never have to rely on your savings and investments! 😀
I started investing in my late 40s, so I’m really late to this party, but now I’m maxing out my ROTH IRA with dividend aristocrat stocks for compound interest and bond ETFs and slowly growing my diversified brokerage account with 10% muni bonds, and growth/value stocks, and S&P 500, VT, and Nasdaq ETFs. It’s never too late! ✌️
Maxing out accounts are not easy but doable if you have the mindset. One thing that help me accomplish this are pay raises. I automatically allocated those increases into the retirement accounts. Also I live below my means, Dave Ramsey said something that stuck with me: Live like no-one else now so that you can later live like no one else. We've got to put our money to work early so it can grow and take care of us when we no longer are able to work.
Millennials dying at their desk because they can't retire in their 70s will legitimately be a major issue in 30-40 years. I'm fortunate that I've saved so I won't be one of them.
I was 47 when I had my 'oh crap' moment. 7 years later I am finally on track, no debt and maxing out retirement. What an idiot I am. YEARS too late, but it will work since I 'caught' my mistake in time.
That is exactly my situation. Playing catchup is doable. We still need a minimum of $185K but we can save / grow that in 1.5 years, maybe a few months more. It gets very strange when the money one has hits a certain figure. We put away about $8K per month but the average saved / grown over a year is $11K.
$220k will be what I'll have in various retirement accounts at 62. SS plus a pension will be $2500 a month. I have inexpensive tastes, and I will retire somewhere with a lower cost of living. And no debt.
I was a perpetual graduate school student until I was 34 and didn't get my first "real" full time, benefitted, job until I was past 36. Then I got laid off by a vindictive boss at the end of 2008 right as the recession was raging. I didn't have a full time job for two years. During that time I began doing anything to bring in income including on-line teaching and starting a very small home business. Then I got rehired after the clown boss got himself fired. But I kept all the side income streams going. Bought a condo and paid it off in eight years using the side-gig income. The home business began to really take off this year, to the point it's brought in as much as my "real" full time job. At 60 I've surpassed $1 million in net worth and at the rate I'm accumulating I expect to reach $2 million by age 67, at which point I will retire, continue with the side gigs, and only take Social Security at 70. Funny to say it but an idiot led to my having a very secure retirement.
A step further on the automatic part not only make it automatic but also increase your contribution automatically, I have my roth 401k contributions go up 1% each year on my birthday usually you can adjust to a 1% decline in income and if your getting a raise you won't even notice it but it will add up over time
I agree. If one simply saves and invests (just a simple, mindless "set it and forget it" mutual fund), early on and consistently, even on a meager pay, wealth is INEVITABLE. The only caveat would be a catastrophic health issue, which is not the case for most people.
Most people I know around retirement age bought too much house when they were younger. Now they have nice homes they can’t sell. I think the key is to buy a smaller house than you can afford and invest the rest. It’s hard to do in these times
I retired 2 years ago at age 55 paid off my mortgage.. To date we have not touched a dime of our retirement money. I have 1.5M in my portfolio. It took me 10 years to get to this goal. I started with 35K through my CFA ‘Lisa Rosa Cavanagh’ My dividends are supplementing my retirement at the moment. It takes time and I invest in good companies. I never sell the chicken that lays the egg (dividends). I just eat the egg
Is the $221,451 in retirement investments or is that total assets? I regularly see how much you should have by what age, but most of my net worth is tied into my house.
The problem there is you have to sell your house and deposit the money into an interest bearing asset in order to reap the benefits so I wouldn't include a house in my net worth unless it's a second house you're renting out.
Get started early is the best advice to give anyone. The next bit of advice I've given people is when you get a raise, give at least half of the raise to your 401K contribution. Keep doing this until you max out. You're already living on what you've been bringing home anyway. Also, some employers have a maximum % you can contribute to the 401K. Lobby them to remove the ceiling so you can someday get to the IRS $ limit. I made the request with my former employer, and they took off the cap. It costs your employer nothing and they shouldn't be trying to protect you from saving too much. Maybe your spouse doesn't have a retirement plan, or maybe you have a side hustle and can afford to save more into the 401K. I do understand inflation hasn't been helping with the standard of living, but you can make great progress using these points.
The second component of that advice is to always live like you're on the previous payscale. I spent most of 2011-2015 living like I was on $8/hr since that was about all that I made. When I finally starting making more reliably in 2015-2019, I had learned the hard way to keep living like I was making $8/hr (though I finished up making $14/hr, of which a chunk went to retirement and another chunk to personal savings to move interstate). When I found a much better job in 2019 and my income more than doubled, I've managed to keep living like I was making $14/hr since I'm pretty confident I can match or exceed that level regardless of what happens next.
$221,000 actually wouldn't be that bad if the retiree or retired couple had that in addition to a livable pension/Social Security plus having a paid for home/house.
And they do have those things. On top of that each spouse has that average amount. plus social security, and a paid for house with almost no bills. This is just the common "panic porn" RUclipsrs and the banks put out to get your cash.
Yes, each person is bringing in about 3K a month in this scenario. 6K a month combined, with a paid-for house is plenty. I get tired of this fear mongering!
@@rozinant1237 Exactly... I have 90 year old parents. They spend about 1500 a month. Old people don't do much other than watch TV. Honestly they can easily live on Social Security alone, but they have a pension coming in and investments... once your home is paid and the kids are gone, people don't have many expenses
That's the same age (32) when I started investing for retirement with my new job that I started with at 32. I just started with my employers 403B plan and I opened a ROTH IRA.@@gio.orbit5498
@@jennifermoffitt4635 Ironically studies show that married couples build much more wealth than single people. Plus I'd hate to die alone and leave my hard earned money to the government or non profit organizations that most likely wouldn't use much good and pay their employees instead of using it for good deeds than leave it to my children.
The Teachers Retirement System of Texas is HUGE! It may skew all your retirement info on teachers. It's that big. It's also typically mandatory at 8% contributions. So, almost all teachers (and others employed by education systems) are enrolled in the TRS. And they do a consistent payout monthly for the rest of your life at retirement (based on a formula of length of service and other factors) no matter how long you live. You cannot "run out" of TRS benefits. My husband works for a teaching hospital run by a public state university and he is in the TRS. He's ahead of me in his retirement savings and he didn't even have to think about it since it was mandatory.
What makes the stat is really that the saving is mandatory and automatic. If you are a teacher, or in education, saving for retirement isn't an optional thing and they do it for you. Depending on how much you are paid and what your lifestyle is, you might not ever need to think about retirement at all. Do make sure that you are not counting on social security for him though. My sister in law is a teacher and they do not have SS taken out, so they will not get it when they retire. So if you are on a pension, make sure you are still saving on the side to make up for that if you need to.
@marshallgardner790 - He is not a teacher. He's a research scientist. He just happens to work at a state education system hospital. My sister is a music teacher. But we definitely have other retirement accounts for both of us.
@@kscott2655 My (still working) husband retired from a TX state education system hospital. My parents were public school teachers in TX. There's a big difference between how TRS treats its hospital system workers and its public school teachers. But all of them are grateful for their pensions! I think one of the best benefits is getting health care when you hit the rule of 80.
wow... I know 1M is not the same 20 years ago.... but man, reality is that most only less than half of that? that sucks.. My 2 boys 16 and 18 already both have Roth Ira and already have positive net worth and knows the power of compound (army of dollars). I totally agree making it "automatic"... that you dont even see it
most teachers are in unions and have a 403b or similar , and most work in the same profession for 20+years. My daughter has been a teacher for 10 years and has more than 150K in her retirement plan.
We started investing at 15% in our late 20's Kicked it to to 25% in our mid-30's. Now our income is doubling as I hit 40 and we are planning to supercharge our investing putting away all that extra income. We'll invest in retirement hard until we get to returns that exceed 2x our income. I consider that the super critical point. Then we'll invest to front load lifestyle improvements. Put away 100k-200k to fund $10k-15k in international travel a year. Put away 100k-200k to fund a boat habit. I'll do the same for my bills. Just use returns on investments to pay for everything until you hit complete financial independence from your job. Then retire.
@@AlexFlavell, If you cab invest hard when you're in your 20's it really helps. Make sure you max out a Roth IRA every year. After you get an emergency fund setup and invest for retirement, I wish I would have setup a "cost of living fund" basically start toss money in outside retirement investments to eventually produce enough returns to offset your "needs" bills, rent/mortgage, property taxes, insurance, etc. Then if SHTF and you lose you job or something bad happens all your needs are covered. Then you just work to finance your "wants" and investments until you hit that point where working isn't necessary anymore. Then do whatever you want.
@@getinthespace7715 It's awesome you say that since I do many of those things...max Roth each January, wait till December to contribute to my SEP IRA, and all through the year balance between hard DCAing into my taxable brokerage, and managing checking and savings. I just wish I worked for a company that had a 401k match, as it's pretty turbulent being self-employed in the music industry 🎵
The thing that is so often overlooked in these discussions is that the equation has two parts; Retirement Income vs. Retirement Expenses. We chose to drive our Retirement Expenses waaaayyyy down by retiring to Ecuador. That makes our hum-drum 401k go a LONG way. We are able to live in a beachfront condo with multiple pools, dine out whenever we want, and have excellent quality healthcare all on JUST our Social Security. We never touch our 401k. The brokerage houses and most financial shows all focus on boosting the income side of the equation without addressing the expense side.
True, but then you’d have to live in Ecuador 😂 It all depends on the individual situation. I know I’d be very unhappy living so far from my family, friends, and culture despite a beachfront property and dining out.
As a teacher, I think a main reason we’re able to accumulate $ even with fairly low salaries is that people know we make fairly low salaries. Therefore there’s no need to keep up with the Jones. In fact teachers who would flaunt their wealth, such as owning luxury cars, could cause the community to vote against additional taxes.
Well....I hope you had good benefit, medical insurance, etc. Plus lots of time off during the year. You may not realize the price others were paying all along for medical coverage. You may not ujderstand the advantage of time off that you had. @@lauracamper3425
In Pennsylvania teachers can make $100,000, have better job security than most, and better pensions than most. IMO knowing that you have job security better positions you to invest.
There’s a reason many teachers are millionaires if you know about their robust pension, and you don’t have SS taken out of your paycheck (nor receive it…but pension far outweighs it). The system “forces” (in a good way) teachers to ‘save’. It’s also an example of how saving consistently and over time grows into robust retirement!
After the last 4 years, these teacher don’t even deserve that. Only then we you get paid for not doing your job. Well I can’t say all teachers, some do amazing job, but here in Tulsa 46% of the high schooler that graduate can’t even read, teacher pass them on to keep creditably and don’t wanna deal with the hassle. You can even look it up. I’m from that school and can say they did a miserable job and are failures
People get upset with teachers pensions but they earned it with putting aside 6 or 7% of their pay over 40 year and getting a match. Plus the money is really hard to withdraw early. It’s not like it just magically appeared from tax payer money. I don’t know why it’s so hard for people to understand compounding interest.
@@5daysofcoffee 6-7% savings rate of a medium income job, working 9 months of the year, and retiring in early-mid 50s with 80% of their pay for rest of their lives…it’s definitely unusual for a lot of reasons and not typical of someone savings 6% of the same age with same pay for the same length of time. It’s not solely compound interest. Almost all my aunts are teachers and I wouldn’t want their job to be frank but it’s not all bad either.
@@FunStuffBuddy It’s pretty much just interest. I’m not a teacher but very familiar with how Wisconsin’s teacher pension works. It’s a 7% match and grows at 6.5% a year, they assume you retire between 55 and 65 and die 80 and then you get the payments for life. So if you end with 1.5 million, you’d get that number divided with anywhere between 15 and 25 for years alive and then divide by 12 for each month. Yes, you get it for life but it’s all from one account and some people die early, some people live longer plus you only get the 6.5% growth so you’re losing a lot of potential compounding growth. Pensions aren’t magic money machines, and the returns might be worse than a 401k, it’s just very safe, you don’t have to worry about how the market is preforming.
Unfortunately, I got totally side crashed and off my goals, when I became a sole caregiver to my aging parents. Now trying my best to catch up because by the time I might retire (maybe 70 or never) there will might not be any social security nor Medicare assistance.
Social Security and Medicare will most surly be there. It's called the "3rd Rail" of politics for a reason. No elected official will ever vote to cut SSI. If they do it is the end of their career and they know it. Trust me every program in the US... will be cut well before SSI. So when America no longer has a military or any other program then you can worry, but not one second before.
When the 401k grows to an amount which is greater than all of the money that you earned while working at the company, it is a great day. It took a while, but it is a great feeling. Given the curve, if you start out of college, you add a reasonable amount to your 401K(15%) until you are 40-45, then you may not need to add any more until retirement. But that initial investment must be high.
My dad only has 300k in his 401k. I was shocked he had so little but he put most of his wealth into his house. Without social security I have no idea how he's going to be able to live comfortably.
@beckypetersen2680 Because the actual Social Security Board of Trustees have said the Old-Age and Survivors Insurance section will actually run out 2033. The only thing left funded is the Disability section. Google: Summary Actuarial Status of the Social Security Trust Funds.
Because as a boomer, we gave up all our income to the millennials and to younger generations. We have nothing left except our TSPs, 401k and something we buried in our backyard.😃😃😃
Retired 21 years ago at 45 with $100k cash and $400k home equity. Now at 66 I have $530k home equity and $15k cash. I could take $2800/mo SS but don't need it so waiting until 70 and $3600/mo. Getting house ready to sell and move to SE Asia. 4% widthal plus SS would be about $5000/mo with people reporting living well is $1500-2000/mo I was lucky when I retired that social media wasn't a thing yet so there was 1000's of people saying you needed millions to retire. I didn't just sit in front of a TV and drink beer. I got into remodeling my home, creating a super landscape, things I enjoyed and no deadline pressure. When done I had to sell so I could get another place, a new canvas. Well gee, cool, $250k cap gain was tax free. So basically that has funded my retirement. I did several other fun projects that turned into cash. For 15 years my total spend has been $600/mo. Because $0 reportable income (I don't invest) I got Medicaid (now Medicare) for $0 cost, $0 copay, $0 deductible. Best health insurance I've ever had. Plus free smartphone and plan (LifeLine) and recently free home internet (ACP). Moving from San Jose CA to Phoenix worked well. No need for heat in winter or hot water in summer so electric is $22-28/mo for 7 months, $75 for 5 months. Line dry clothes as fast as running a dryer. In N Central so walk everywhere (2 hr a day). I burn about 20 gal/yr in my car. Everyday is super fun. Don't have cable TV, NetFlix, etc... no time. Waste enough time on YT.
I'm 47 and I was broke my whole life. I just couldn't see to get out of the quicksand. Finally started saving at 43, now I have 20K in my 401K. I'm saving 25% of my pre-tax income and paying for a M.S. in Information Systems out of pocket. I'm still in debt but I know at some point I'll be out of debt. The hard thing about this is no one I grew up with ever had a penny to their name when they retired. They all depended on family and their children. It makes me crazy to think how bad the habits I learned were! I would be so far ahead if I had known what to do!😡
Are the saving statistics referenced in the video specifically RETIREMENT savings accounts or ALL savings and investments? If its the former, the stats could be a bit misleading. I could have zero in retirement savings account and still retire comfortably based on home equity, passive/semi-passive income from investments and regular non-retirement savings.
Live life now and pay later. Or sacrifice and get out of dept and live happy later when retired. I had a ball and never had the latest and greatest. Cars, trucks, bikes I still kept up to those that always had the latest and greatest, and am ahead now.
Don’t save a certain amount. Spend only what you have to and save the rest. While you guys are living up to your earnings, your giving away your compounding.
I'll be honest, that's more than I thought people in retiring age had. I've heard the average American barely has a few thousand dollars in the bank. I realize here they're referring to retirement investments and probably bank accounts also, but again, I'm surprised as that's more than I thought - which is a GOOD thing.
Since the Earth will be done in 6 years, why would anyone save... or so the narrative states. Perhaps it is time to have the conversation with AOC, Greta and others, that planning for the future may be more than EV's and elimination of fossil fuels. Just consideration.
One of the first things I noticed as an early 20 something entering the workforce: Pensions aren't really a thing anymore and social security is a joke. I've been packing away savings hardcore ever since
honestly yes. Even tho I haven’t finished university yet, just working is EYE opening. Really hard to save in general, I decided to stop hanging with anyone honestly, too expensive. I wanna stay some years in the USA then GET OUT lol
Funny how these talks never consider the loss of purchasing power of the dollar in their long term compounding interest excitement. If you are looking at the actual reality, the gains you perceive are much less.
For my wife and I if we consider where we crossed the $2M mark it was 49. While we combine things and jointly own the house we have similar incomes and retirement savings so each had that $1 million net worth. Almost 2.5 million now thanks to housing and stock market.
Actually, I think that it is worse than $200K. 200K is an average - if you take all of the retirement money and divide it by the number of retirees, you get $200k. If you rank everybody from low to high and select the guy in the middle, you get a median of less than $100,000. Vanguard comes out with statistics about it every year. The reason the average is $200k is that the wealthy skew the average upwards.
Same. Wife and I are just turning 39 and knocking on the door of being a millionaire. But it's all invested (except the value of our house) so we dont ever see any of that money. We still save and put away, but it's still hard living right now
Does this $221K number only include avowed retirement assets like IRAs and 401Ks, or does it include all financial assets regardless of the type of account they're in? How about real estate owned? A lot of these alarming statistics are cooked up by brokerage houses who are looking to manage more assets.
In my case, I only consider the money I have in investments. I never include my real estate, my employer sponsored retirement plan or any employer sponsored deferred compensation plan, just my personal investments. At present I will be able to supplement my employee retirement with my investment income so I will be earning my pre-retirement income after retirement and still have a surplus of investment income.
I was lucky enough to get started saving money early @ 21 yrs old into 401K and have a lot of money in there after 37 years... been into 7 figures for 5 years now... It is truly amazing how the power of compounding works... I've been maxing the 401K and Roth for 9 years now... It is sometimes sad to have to go to work and get paid peanuts compared to what I make in the stock market in one day.. Sometimes Ill make 50-100 thousand dollars in one day ( of course I might give 40 thousand back the next day ) while I'm making $350 that day at work... Ill be retiring as soon as im 59 1/2, which is in about 1.5 years.... The only thing that i would have done different if I would have known... Was that I would have started a Roth when I was 21 also because all of that money including the capital gains will never be income taxed... I didnt start a Roth until about 12 years ago, but I was lucky enough to get that money invested into tesla, so the future looks bright....
I dont know about 37 years ago but 401ks now let you invest traditional or roth or a combination of both. Roth 401ks are seperate from the roths you can only invest 6500 or 7500 if youre over 50. I always tell people to invest mainly with after tax dollars but you should still invest a little in pre tax Btw you must really love your job because you can retire anytime and the money you take out early will only be penalized 10 percent. Sounds like you could have retired a long long time ago. Im not sure what its called but you sound like you may have a compulsion disorder where it would bother you irrationally to not wait til 59 1/2. Good job saving that much though
Keep this in mind, teachers are third in net worth THIS DOES NOT INCLUDE THEIR PENSION. Let’s say they average 50K a year in pension with COLA you could say that is like a million dollars
Delusional if you believe that Americans are retiring with that much money! The vast majority I believe are retiring with far less or without anything at all! I know several who didn't even make it to retirement due to health issues that wiped them out financially and will be living on disability for the rest of their lives. I 'd like just once for one of these shows to gather REAL statistics of how many Americans retire with any money saved. What percentage of Americans are on disability? What percentage only live off SS? The majority of Americans would probably think $220k was a huge amount to retire on! You are not factoring in the majority of Americans that live below the poverty line and have never made enough to save. It's only going to get worse with the political and economic climate for future generations of retirees.
The fact is there is no cookie cutter retirement. Nor is there a cookie cutter financial plan. Everyone has different ideas of retirement. I retired early due to health issues. After a year I have recovered sufficiently to work a couple of part time jobs. Even though I Loved my old job, it was highly stressful and demanding. I have no stress, of course I don't make the money that I did. But I can work if I want or don't. I took my first disbursement from my retirement account, not because I need the money, I wanted to take some out while the Trump tax cuts were in effect and get it taxed at 12% and then deposit it into my Roth IRA. Expenses drop significantly in retirement with the exception of health insurance which is ridiculous. If you are younger and invest for retirement, use a Roth IRA. Taxes will likely be much higher in the future. Good Luck
The Teacher stat is a little misleading. Nearly every head-of-household teacher has a side gig (begins w/ summer free time). The side gig ends up earning more than their teacher salary, yet they continue to identify as a teacher. Try asking a few. I think Dave Ramsey still calls himself a teacher....PLus, until recently, nearly all teachers received a full pension including healthcare, LTC, and life insurance, and pension money until death with COLA. That is changing for the current new hires, but historically, teachers have done well. Don't fall for the helpless, "Im a teacher and Im poor"
this video gave me the impression that you folks do not have any compassion and are all to happy to belittle people who have less than you and maybe haven't made all the best decisions ... I am sorry, but i just didn't sense you were out to help people ... I wish you the best ... hopefully my impressions were incorrect ...
Listen to these guys! I’m 43. I started saving / investing heavily at age 20 just as they recommend. I don’t have as heavy today as I did then but I am in the “messy middle” right now. 5 person household with 1 income. That said, no consumer or student loan debt (I didn’t go to college), 2 years left on the mortgage [400k property] and 1.7M invested in mutual funds. Not a single stock or coin in sight. On pace to retire at 55 years old with 5M invested. These guys are giving you the recipe for success! Get that “Army of Dollar Bills”!
Before all the ranting, how about actually looking at the source of the numbers? The oft quoted retirement savings amounts come from financial institutions. A large number of us have money in multiple accounts with different financial institutions. Before retiring I had savings and retirement accounts with three financial institutions , total of 5 different accounts not counting savings accounts with two banks. My wife also had several accounts.
If I could go back to my 20 year old self I would read myself the riot act. Didn't start really saving to 35 but I buckled down. About to retire now and have a good nest egg. I can't imagine retiring with 221k. Don't know if they teach this now in schools but they should as never done when I was in school.
Dude I'm 29 and can't even find a job that pays. Still living with my dad. I got a job offer for $17.50... All men should be making $23.00 starting out
If you're living on $8,000 a year from your investments and social security you aren't paying much in taxes if anything. Also, teachers receive pensions. I know teachers that meet the criteria in one district to qualify for their pension at retirement and move to another district to become vested in that district's pension fund. I don't disagree with you encouraging people to invest and save for retirement, which is necessary but be more transparent please.
11:00 I'm 58 years-old...and 30 years since completing my MBA. My financial picture at age 38, 48, and today look a lot like this chart. I retire in 9 years, and am hoping to reach the last bar in this chart at that time.
Most Americans find it hard to retire comfortably amid economy downtrend. Some have close to nothing going into retirement, my question is, will you pay off mortgage as a near-retiree, or spread money for cashflow, to afford lifestyle after retirement?
as most investing-related questions, the answer is, it depends.. my best suggestion is to consider advisory management
Agreed, the role of advisors can only be overlooked, but not denied. I remember in early 2020, during covid-outbreak, my portfolio worth around 300k took a slight fall, apparently due to the pandemic crash, at once I consulted an advisor in order to avoid panic-selling. As of today, my account has yielded big fat yields, and leverages on 7-figure, only cos I delegate my excesses right.
this is huge! mind if I look up the advisr that guides you please? only invest in my 401k through my employer for now, but enthused about diversifying my investments for a prosperous financial future
My CFA, Amber Dawn Brummit , is a renowned figure in her line of work. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
Annette Christine Conte is the licensed coach I use. Just research the name. You'd find necessary details to work with a correspondence to set up an appointment.
When I was 25 I couldn't fathom living to be in my 70s...shoot, I didn't even think committing to a purchase of 100 count garbage bags was a good idea 😅
Same lol.
I am 25 and can't imagine it, but I am planning as if I will! 😅 at that age, everything must hurt, so I don't want my wallet to hurt as well
A roommate some years ago, "TP comes in a 4 pack? Why? We only have one bathroom!"
@@Sylvan_dBHahaha! I’m the only one in my household and I buy the 24-pack at Costco, lol.
LOL, I have wanted to live into my 100's ever since I was a kid.
The amount of my fellow millennials who aren't even saving for retirement and say they just plan on living off social security is terrifying to me.
Wtf. I don't think I know anyone my age who thinks social security is even going to be a thing by the time we get to retirement.
Largest line item on the US budget, time to phase it out
You have a strange subset of millennials as friends.
@@MultiRocknroll123whatever works for your daydream fetish of old people in the streets.
I think most millennials and Gen Z are fully expecting to work until the day they die. They are already witnessing their grandparents having to leave retirement and bag groceries in order to buy their medications.
Retirement becomes truly fulfilling when you possess two essential elements: ample financial resources and a meaningful purpose in life. Make prudent investment choices to secure good returns and ensure a comfortable retirement.
Rising prices have affected my intention of retiring at 62, working part-time, and building my savings. I'm worried about whether individuals who weathered the 2008 financial crisis found it less challenging than my current situation. The stock market's volatility, coupled with a reduced income, is making me anxious about having enough for retirement.
I completely agree; I am 60 years old, recently retired, and have approximately $1,250,000 in external retirement funds. I am debt free and have very little money in retirement funds compared to the total value of my portfolio over the past three years. To be honest, having a portfolio-advisor for investing is genius!
*@mellon-wrigley3* That does make a lot of sense, unlike us, you seem to have the Market figured out. Who is this consultant?
The decision on when to pick an Adviser is a very personal one. I take guidance from “Gertrude Margaret Quinto” to meet my growth goals and avoid mistakes, she's well-qualified and her page can be easily found on the net.
Thank you for the lead. I searched her up, and I have sent her an email. I hope she gets back to me soon.
So I have tracked my returns since 2007. Total contributions (in this account) of $82,364 current balance is $226,503. Compounding interest works. Outside the roughly $30k I contributed the first three years starting in 2007, I added about $51k from 2019 to 2021.
This is the power of compounding interest. I keep this account as a benchmark for my other retirement accounts. The plan is to retire at 63 with a withdrawal that can support a $100k lifestyle indexed to 2018 dollars using the mean inflation rate from present to 1974 on a rolling basis. Also stress tested finaces assuming Great Depression market performance levels the year I retire.
Know your finances, folks. A failure to plan is a plan to fail. 49 y/o Engineer who does not want to worry about money when he is old and decrepit.
I so messed up not listening to my dad. He told me over and over again to invest in 2008. I had a decent chunk of change then. Didn't do it.
Didn't start investing until 2018. Oopsie.
Not sure you’re going to have enough to support 100k a year.
@@FrugalTeacherFI as stated in the post, it is ONE of my accounts.
@@FrugalTeacherFI how do you know their age? If they started saving in 2007, assume they are currently 38 with at least 20 years minimum left to save. Conservatively they should have over $900K if they DON'T even put another dollar in. Pretty sure they will be OK by 60ish.
I’m 54 and have saved 7 figures by age 49 during my nursing career plus a pension. I’ll be retiring at 57-58
How much do you think you pit away on average a year to reach that? I'm 25 and just really buckled down this year. Just curious how it went for someone whose gone through it first hand
@@matthewclark4958I can’t answer for him, however I’m in a similar situation at present.
For me it wasn’t a set dollar amount that I put away (the amount was what I could afford), it’s what I did with that money which was finding a good investment advisor to invest my money so I could get my best return.
Your question doesn't matter, because the markets change and there is no magic number. Keep as much as you need to be happy/content, and save the rest.@@matthewclark4958
@@matthewclark4958 If you can, invest at least $800 a month and never stop that for 25 years. You can even stop adding any $$ once it grows to a large amount, the compounding will do all the work.
@@matthewclark4958I’ll answer your question. I’m a nurse too. I started with just $200 a month and the slowly increase my 403b and max out my Roth. I have been max out my 403b for the last 10 plus years. If you can max out your 401k or 403b and Roth, you will be a millionaire. Good question.
1M at 47 and now 2M at 53. Planning to retire at 55 in 18 months. Do the work and it will come. Just a Gen X kid who didn't know any better than to save some of every paycheck for over 30 years. The 401k or any automatic plan that you never see the money in your bank account will truly set you free. I didn't set out to retire at all. We only wanted a better tomorrow and gave our future selves a wonderful present.
good job, a couple things many people don't realize or think about - 1)there is exponential growth later on , the phrase "the rich get richer". An 8% return when your balance is lower say 100k is very different than the exact same 8% expected return on 1 to 1.5 mil. 2) when you retire, if you grow a decent nest egg - it's not like you take all of that money out right away. Your money and overall worth continues to grow for awhile because the earnings you make on what you have saved are greater than your expenses.
@@stevetimmons3114 Exactly and thank you.
Love your content! You guys have helped to inspire me to go from just doing employer match in the 401k to 15% there and maxing out my roth IRA this year! Living a bit tighter, but seeing the money start to grow is a great motivator.
At 29 I have a 250k net worth with the majority of that being in my Roth makes me soooo happy. I am trying my best to build wealth for my future family your channel is so helpful!! I try to preach this stuff to all my friends.
I started late at 40. We were working with a single income house and child support so every dollar was getting used. Now 3 years later we are 100% debt free and it's game on for catching up. I'm showing my 20 year old how to invest with dividend etfs where she won't have to struggle in the future.
Good man!
If only child support actually went to children.
I finished paying CS last October after paying for 13 years, I added that money into my monthly investment like it never existed, my sons mother actually asked the judge to keep it going for 1 more year, she told him that she still had 10 payments on her new car 😂😅.. he told her he couldn't just force me to pay beyond the limit 😭... my sons 19 now and and puts 50$ month into his IRA
@@Liimpy she's a little weasel
I started mid 40s…had to pay my debts…paid off my student loan. Now I’m sure that I ll retire with some good extra money on top of SS
1:08: They wake up... and ask, "What do I do?" They complain -- bitterly -- that the "government doesn't care about us old people. How do they think that we can live on what we get with Social Security?" Of course, the government -- the Social Security Administration in particular -- admonishes everyone (I have it in writing from years ago, myself!) that Social Security is meant to supplement what you have saved and invested over the course of your working years. But people just does that warning away and do the YOLO dance! And when they get old, they complain about the uncaring government. My reply: Show me the government (doesn't matter the type) anywhere that really "cares about old people." The only person who can care about you in old age -- at least as far as your money goes -- is that guy or gal you see in the mirror everyday. That's it. It's not the job of the government to "care about you" in old age! They can't and won't. Period! Of course, being consistent about putting money away is soooo boring (soooo Boomer!).
The Social Security webpage literally says it's meant to cover 40% of pre-retirement income. No one can claim ignorance. But I do support lifting the cap and expanding benefits.
I'm 70 years old, worked for 38 years as an insurance adjuster... I was able to save and invest 20% of my gross income since I was 25 and lived in a condo for 40 years .. the key is live beneath your means and invest the rest... I have social security, pension and a seven figure IRA... was still able to have fun and travel when I was younger..
Do you understand how much higher the cost of living is now compared to back when you were able to save that kind of money?
@@Holthyr yes, so what’s your point?
@@hump1953 you say live below your means. As inflation out paces we have less to invest. Housing prices have gone crazy lately. I'm glad things were easy for you but to us younger generations it's like picking have fun OR retire one day.
@@Holthyr Stop whining and answer this question: What have you done in the last year in order to earn more money?
@@randymillhouse791 I don't have to prove anything to you. Even if I told you you wouldn't believe me. Go live your life and stop thinking everyone is whining.
I just want to make a distinction between the times 40 and 50 years ago and now. Often the older generations don't understand how the world has changed since they were this age.
Teachers in washington state make over 100k for 10 months of work. That is hardly little pay.
Corporations and even public employers have shifted from defined benefits and into self determined retirement accounts. It is a boon for the employer and will be a disaster for the employee.
Workers, especially the 60% earning less than $100K, do not have the understanding, much less the expertise, to turn $1 into $88. The vast majority under the deferred comp scheme will end up working until the day of their death, and only then if their employer lets them off for the funeral.
I'm always suspicious of these stats ... is that $220k per couple? per account? my wife and I each had multiple jobs during our careers, when we retired we had accounts at 7 different brokerages. I'm doubtful that these stats factor that in
Is total per person on avg.
Pretty sure they use every account associated with the social security number, so it factors in accounts at different places.
It doesn't matter if they are in the same or separate brokerages. It compounds the same either way.
so includes ultra-wealthy@@grega2362
@@mulletsquirrelthat's not the point he was making.
My boss convinced me to contribute to the 401k at Winn Dixie early, Luckily I got another job and transferred it to my current job in 2008. It got up to $15k, but it was down to $10k when I moved it. I know people that lost everything when the company went bankrupt! I now have a 457b worth around $200k. but I've got 9 years to work, and that's a supplemental retirement that doesn't include our pension where we can get up to 90% 0f our salary... plus there is a DROP program
Unfortunately the stat mentioned, needs more context. We know several people who have guaranteed pensions, so their savings are smaller. So the average retirement savings should be mentioned with pensions, retired military, etc.
My parents retired about 7 years ago with about $500,000. They left the crazy high cost state of CA and moved to SC. My Dad always told me the key to a secure retirement is to retire with ZERO debt, including NO MORTGAGE. When you have no debt and no mortgage your retirement will truly be the "golden years" per my Dad. Looking at my folks current situation I now know how right my Dad was! Their mo. income is about $5,000 which includes SS, dividends and a small pension. Think about this. If you had no debt how far would $5k/mo. go for you? With my folks income their $500K is essentially an emergency fund that keeps growing every year (yes, that will be my inheritance some day and will likely be well south of 7 figures). They have never had to withdraw a penny! Do they enjoy retirement? They take several week-long trips every year, they eat out when ever they want, they drive a nice can and live in a beautiful new home, etc., so yes, they have an amazing retirement. BTW, one important decision they made was to leave CA! My Dad is a smart dude! My Dad laughs when I tell him everyone on RUclips says you need a $1M or more to retire. The bottom line is to have NO DEBT and enough income to never have to rely on your savings and investments! 😀
It’s okay to have some debt. Depends on a lot of things
@@alex124241 Said the guy who cold calls people from Chase Bank...
Queue "Time" by Pink Floyd:
And then one day you find
Ten years have got behind you
No one told you when to run
You missed the starting gun
I started investing in my late 40s, so I’m really late to this party, but now I’m maxing out my ROTH IRA with dividend aristocrat stocks for compound interest and bond ETFs and slowly growing my diversified brokerage account with 10% muni bonds, and growth/value stocks, and S&P 500, VT, and Nasdaq ETFs. It’s never too late! ✌️
Maxing out accounts are not easy but doable if you have the mindset. One thing that help me accomplish this are pay raises. I automatically allocated those increases into the retirement accounts. Also I live below my means, Dave Ramsey said something that stuck with me: Live like no-one else now so that you can later live like no one else. We've got to put our money to work early so it can grow and take care of us when we no longer are able to work.
Single income and started saving at 40. Saved 1.5 million in 5 years with skills I’ve built over the past 2 decades.
Curious to know what type of job or business is helping you generate over 650K annually?
Nothing succeeds like success. Start small, start young, just make sure you start now.
Millennials dying at their desk because they can't retire in their 70s will legitimately be a major issue in 30-40 years.
I'm fortunate that I've saved so I won't be one of them.
I was 47 when I had my 'oh crap' moment. 7 years later I am finally on track, no debt and maxing out retirement. What an idiot I am. YEARS too late, but it will work since I 'caught' my mistake in time.
That is exactly my situation. Playing catchup is doable. We still need a minimum of $185K but we can save / grow that in 1.5 years, maybe a few months more. It gets very strange when the money one has hits a certain figure. We put away about $8K per month but the average saved / grown over a year is $11K.
$220k will be what I'll have in various retirement accounts at 62. SS plus a pension will be $2500 a month. I have inexpensive tastes, and I will retire somewhere with a lower cost of living. And no debt.
I was a perpetual graduate school student until I was 34 and didn't get my first "real" full time, benefitted, job until I was past 36. Then I got laid off by a vindictive boss at the end of 2008 right as the recession was raging. I didn't have a full time job for two years. During that time I began doing anything to bring in income including on-line teaching and starting a very small home business. Then I got rehired after the clown boss got himself fired. But I kept all the side income streams going. Bought a condo and paid it off in eight years using the side-gig income. The home business began to really take off this year, to the point it's brought in as much as my "real" full time job. At 60 I've surpassed $1 million in net worth and at the rate I'm accumulating I expect to reach $2 million by age 67, at which point I will retire, continue with the side gigs, and only take Social Security at 70. Funny to say it but an idiot led to my having a very secure retirement.
Twelve years in grad school? Why?
A step further on the automatic part not only make it automatic but also increase your contribution automatically, I have my roth 401k contributions go up 1% each year on my birthday usually you can adjust to a 1% decline in income and if your getting a raise you won't even notice it but it will add up over time
I love how you emphasize that the wealth-building is INEVITABLE if one does it right.
I agree. If one simply saves and invests (just a simple, mindless "set it and forget it" mutual fund), early on and consistently, even on a meager pay, wealth is INEVITABLE. The only caveat would be a catastrophic health issue, which is not the case for most people.
Most people I know around retirement age bought too much house when they were younger. Now they have nice homes they can’t sell. I think the key is to buy a smaller house than you can afford and invest the rest. It’s hard to do in these times
I retired 2 years ago at age 55 paid off my mortgage.. To date we have not touched a dime of our retirement money. I have 1.5M in my portfolio. It took me 10 years to get to this goal. I started with 35K through my CFA ‘Lisa Rosa Cavanagh’ My dividends are supplementing my retirement at the moment. It takes time and I invest in good companies. I never sell the chicken that lays the egg (dividends). I just eat the egg
Truly It’s all about accumulating wealth through compound interest investments.
I looked up Lisa Rosa Cavanagh on the internet out of curiosity; she has a strong résumé.
I'm playing the long term game with a well diversified investment portfolio
did a quick search and found her webpage. I must say her resume is pretty impressive.. will be writing her too
I dropped loads all over Lisa Kavanaugh!!!
Is the $221,451 in retirement investments or is that total assets? I regularly see how much you should have by what age, but most of my net worth is tied into my house.
The problem there is you have to sell your house and deposit the money into an interest bearing asset in order to reap the benefits so I wouldn't include a house in my net worth unless it's a second house you're renting out.
Get started early is the best advice to give anyone. The next bit of advice I've given people is when you get a raise, give at least half of the raise to your 401K contribution. Keep doing this until you max out. You're already living on what you've been bringing home anyway.
Also, some employers have a maximum % you can contribute to the 401K. Lobby them to remove the ceiling so you can someday get to the IRS $ limit. I made the request with my former employer, and they took off the cap. It costs your employer nothing and they shouldn't be trying to protect you from saving too much. Maybe your spouse doesn't have a retirement plan, or maybe you have a side hustle and can afford to save more into the 401K. I do understand inflation hasn't been helping with the standard of living, but you can make great progress using these points.
The second component of that advice is to always live like you're on the previous payscale.
I spent most of 2011-2015 living like I was on $8/hr since that was about all that I made. When I finally starting making more reliably in 2015-2019, I had learned the hard way to keep living like I was making $8/hr (though I finished up making $14/hr, of which a chunk went to retirement and another chunk to personal savings to move interstate). When I found a much better job in 2019 and my income more than doubled, I've managed to keep living like I was making $14/hr since I'm pretty confident I can match or exceed that level regardless of what happens next.
Be the tortoise, not the hare. Every time I read that book, the tortoise wins. The tortoise just kept going no matter what was happening around him
$221,000 actually wouldn't be that bad if the retiree or retired couple had that in addition to a livable pension/Social Security plus having a paid for home/house.
And they do have those things. On top of that each spouse has that average amount. plus social security, and a paid for house with almost no bills. This is just the common "panic porn" RUclipsrs and the banks put out to get your cash.
Yes, each person is bringing in about 3K a month in this scenario. 6K a month combined, with a paid-for house is plenty. I get tired of this fear mongering!
I would not feel comfortable under 1milliom
Stats say, only 10% of Americans retire with a million dollars. Last time I looked, the other 90% are not living on the street.
@@rozinant1237 Exactly... I have 90 year old parents. They spend about 1500 a month. Old people don't do much other than watch TV. Honestly they can easily live on Social Security alone, but they have a pension coming in and investments... once your home is paid and the kids are gone, people don't have many expenses
I am 61 male, single, no kids, currently saved in retirement is $907,000, with 4 more years to work before retirement.
what did you invest in? when did you get started? I'm asking because I'm low income and only have 12k invested at 32
That's the same age (32) when I started investing for retirement with my new job that I started with at 32. I just started with my employers 403B plan and I opened a ROTH IRA.@@gio.orbit5498
single and no kids.... that's how.
@@jennifermoffitt4635 Ironically studies show that married couples build much more wealth than single people. Plus I'd hate to die alone and leave my hard earned money to the government or non profit organizations that most likely wouldn't use much good and pay their employees instead of using it for good deeds than leave it to my children.
Asked no one
The Teachers Retirement System of Texas is HUGE! It may skew all your retirement info on teachers. It's that big. It's also typically mandatory at 8% contributions. So, almost all teachers (and others employed by education systems) are enrolled in the TRS. And they do a consistent payout monthly for the rest of your life at retirement (based on a formula of length of service and other factors) no matter how long you live. You cannot "run out" of TRS benefits. My husband works for a teaching hospital run by a public state university and he is in the TRS. He's ahead of me in his retirement savings and he didn't even have to think about it since it was mandatory.
What makes the stat is really that the saving is mandatory and automatic. If you are a teacher, or in education, saving for retirement isn't an optional thing and they do it for you. Depending on how much you are paid and what your lifestyle is, you might not ever need to think about retirement at all.
Do make sure that you are not counting on social security for him though. My sister in law is a teacher and they do not have SS taken out, so they will not get it when they retire. So if you are on a pension, make sure you are still saving on the side to make up for that if you need to.
@marshallgardner790 - He is not a teacher. He's a research scientist. He just happens to work at a state education system hospital. My sister is a music teacher. But we definitely have other retirement accounts for both of us.
TRS offers some security although it is fixed and rarely offers a cost of living adjustment. Hopefully this will change in the future.
@@kscott2655 My (still working) husband retired from a TX state education system hospital. My parents were public school teachers in TX. There's a big difference between how TRS treats its hospital system workers and its public school teachers. But all of them are grateful for their pensions! I think one of the best benefits is getting health care when you hit the rule of 80.
Pay yourself first! Started investing at 18, I’m 29 now… I wish I started earlier!
wow... I know 1M is not the same 20 years ago.... but man, reality is that most only less than half of that? that sucks.. My 2 boys 16 and 18 already both have Roth Ira and already have positive net worth and knows the power of compound (army of dollars). I totally agree making it "automatic"... that you dont even see it
most teachers are in unions and have a 403b or similar , and most work in the same profession for 20+years. My daughter has been a teacher for 10 years and has more than 150K in her retirement plan.
Wrong with Teachers. In the Northeast, they make 130k for 9 months work, Pension for life, healthcare for life.
Wow I feel very fortunate as I hit the 1M net worth at age 39.
We started investing at 15% in our late 20's
Kicked it to to 25% in our mid-30's. Now our income is doubling as I hit 40 and we are planning to supercharge our investing putting away all that extra income.
We'll invest in retirement hard until we get to returns that exceed 2x our income. I consider that the super critical point.
Then we'll invest to front load lifestyle improvements.
Put away 100k-200k to fund $10k-15k in international travel a year.
Put away 100k-200k to fund a boat habit.
I'll do the same for my bills.
Just use returns on investments to pay for everything until you hit complete financial independence from your job.
Then retire.
I like your thinking…I’ll try to do the same as time goes on (25yr old here!)
@@AlexFlavell, If you cab invest hard when you're in your 20's it really helps. Make sure you max out a Roth IRA every year.
After you get an emergency fund setup and invest for retirement, I wish I would have setup a "cost of living fund" basically start toss money in outside retirement investments to eventually produce enough returns to offset your "needs" bills, rent/mortgage, property taxes, insurance, etc.
Then if SHTF and you lose you job or something bad happens all your needs are covered.
Then you just work to finance your "wants" and investments until you hit that point where working isn't necessary anymore. Then do whatever you want.
@@getinthespace7715 It's awesome you say that since I do many of those things...max Roth each January, wait till December to contribute to my SEP IRA, and all through the year balance between hard DCAing into my taxable brokerage, and managing checking and savings. I just wish I worked for a company that had a 401k match, as it's pretty turbulent being self-employed in the music industry 🎵
The thing that is so often overlooked in these discussions is that the equation has two parts; Retirement Income vs. Retirement Expenses.
We chose to drive our Retirement Expenses waaaayyyy down by retiring to Ecuador. That makes our hum-drum 401k go a LONG way. We are able to live in a beachfront condo with multiple pools, dine out whenever we want, and have excellent quality healthcare all on JUST our Social Security. We never touch our 401k.
The brokerage houses and most financial shows all focus on boosting the income side of the equation without addressing the expense side.
True, but then you’d have to live in Ecuador 😂
It all depends on the individual situation. I know I’d be very unhappy living so far from my family, friends, and culture despite a beachfront property and dining out.
As a teacher, I think a main reason we’re able to accumulate $ even with fairly low salaries is that people know we make fairly low salaries. Therefore there’s no need to keep up with the Jones. In fact teachers who would flaunt their wealth, such as owning luxury cars, could cause the community to vote against additional taxes.
Plus, they are really good planners. 📝
Teachers in general also have great retirement programs offered to them. Not all lower paid workers have that advantage.
When I was in High School it was a well-known fact that teachers never had sex.
Well....I hope you had good benefit, medical insurance, etc. Plus lots of time off during the year. You may not realize the price others were paying all along for medical coverage. You may not ujderstand the advantage of time off that you had. @@lauracamper3425
In Pennsylvania teachers can make $100,000, have better job security than most, and better pensions than most. IMO knowing that you have job security better positions you to invest.
There’s a reason many teachers are millionaires if you know about their robust pension, and you don’t have SS taken out of your paycheck (nor receive it…but pension far outweighs it). The system “forces” (in a good way) teachers to ‘save’. It’s also an example of how saving consistently and over time grows into robust retirement!
After the last 4 years, these teacher don’t even deserve that. Only then we you get paid for not doing your job. Well I can’t say all teachers, some do amazing job, but here in Tulsa 46% of the high schooler that graduate can’t even read, teacher pass them on to keep creditably and don’t wanna deal with the hassle. You can even look it up. I’m from that school and can say they did a miserable job and are failures
People get upset with teachers pensions but they earned it with putting aside 6 or 7% of their pay over 40 year and getting a match. Plus the money is really hard to withdraw early. It’s not like it just magically appeared from tax payer money. I don’t know why it’s so hard for people to understand compounding interest.
@@5daysofcoffee 6-7% savings rate of a medium income job, working 9 months of the year, and retiring in early-mid 50s with 80% of their pay for rest of their lives…it’s definitely unusual for a lot of reasons and not typical of someone savings 6% of the same age with same pay for the same length of time. It’s not solely compound interest. Almost all my aunts are teachers and I wouldn’t want their job to be frank but it’s not all bad either.
@@jacksonbilly9979this makes me so glad we moved from Tulsa. That literacy rate for a graduating class is pathetic. It explains alot though.
@@FunStuffBuddy
It’s pretty much just interest. I’m not a teacher but very familiar with how Wisconsin’s teacher pension works. It’s a 7% match and grows at 6.5% a year, they assume you retire between 55 and 65 and die 80 and then you get the payments for life. So if you end with 1.5 million, you’d get that number divided with anywhere between 15 and 25 for years alive and then divide by 12 for each month.
Yes, you get it for life but it’s all from one account and some people die early, some people live longer plus you only get the 6.5% growth so you’re losing a lot of potential compounding growth. Pensions aren’t magic money machines, and the returns might be worse than a 401k, it’s just very safe, you don’t have to worry about how the market is preforming.
Such bs!! Money 💰 scam.
Unfortunately, I got totally side crashed and off my goals, when I became a sole caregiver to my aging parents. Now trying my best to catch up because by the time I might retire (maybe 70 or never) there will might not be any social security nor Medicare assistance.
Social Security and Medicare will most surly be there. It's called the "3rd Rail" of politics for a reason. No elected official will ever vote to cut SSI. If they do it is the end of their career and they know it. Trust me every program in the US... will be cut well before SSI. So when America no longer has a military or any other program then you can worry, but not one second before.
Yes there will
When the 401k grows to an amount which is greater than all of the money that you earned while working at the company, it is a great day. It took a while, but it is a great feeling. Given the curve, if you start out of college, you add a reasonable amount to your 401K(15%) until you are 40-45, then you may not need to add any more until retirement. But that initial investment must be high.
My dad only has 300k in his 401k. I was shocked he had so little but he put most of his wealth into his house. Without social security I have no idea how he's going to be able to live comfortably.
Why does everything think they are going to just suddenly stop SS? If they won't cut SSI or welfare, why would they stop SS? I don't see it.
@@beckypetersen2680 I don't think they'll stop it but perhaps the benefits will be diminished.
He can sell house and downsize. Use proceeds to live off of. He could also move abroad
@beckypetersen2680 Because the actual Social Security Board of Trustees have said the Old-Age and Survivors Insurance section will actually run out 2033. The only thing left funded is the Disability section. Google: Summary Actuarial Status of the Social Security Trust Funds.
@@kumarsukhdeo9886 Reverse mortgage.
Because as a boomer, we gave up all our income to the millennials and to younger generations. We have nothing left except our TSPs, 401k and something we buried in our backyard.😃😃😃
Common myth. Teachers get paid well in many plaves plus excellent retirement plans available.
Retired 21 years ago at 45 with $100k cash and $400k home equity. Now at 66 I have $530k home equity and $15k cash. I could take $2800/mo SS but don't need it so waiting until 70 and $3600/mo. Getting house ready to sell and move to SE Asia. 4% widthal plus SS would be about $5000/mo with people reporting living well is $1500-2000/mo
I was lucky when I retired that social media wasn't a thing yet so there was 1000's of people saying you needed millions to retire. I didn't just sit in front of a TV and drink beer. I got into remodeling my home, creating a super landscape, things I enjoyed and no deadline pressure. When done I had to sell so I could get another place, a new canvas. Well gee, cool, $250k cap gain was tax free. So basically that has funded my retirement.
I did several other fun projects that turned into cash.
For 15 years my total spend has been $600/mo. Because $0 reportable income (I don't invest) I got Medicaid (now Medicare) for $0 cost, $0 copay, $0 deductible. Best health insurance I've ever had. Plus free smartphone and plan (LifeLine) and recently free home internet (ACP).
Moving from San Jose CA to Phoenix worked well. No need for heat in winter or hot water in summer so electric is $22-28/mo for 7 months, $75 for 5 months. Line dry clothes as fast as running a dryer. In N Central so walk everywhere (2 hr a day). I burn about 20 gal/yr in my car.
Everyday is super fun. Don't have cable TV, NetFlix, etc... no time. Waste enough time on YT.
I'm 47 and I was broke my whole life. I just couldn't see to get out of the quicksand. Finally started saving at 43, now I have 20K in my 401K. I'm saving 25% of my pre-tax income and paying for a M.S. in Information Systems out of pocket. I'm still in debt but I know at some point I'll be out of debt. The hard thing about this is no one I grew up with ever had a penny to their name when they retired. They all depended on family and their children. It makes me crazy to think how bad the habits I learned were! I would be so far ahead if I had known what to do!😡
Are the saving statistics referenced in the video specifically RETIREMENT savings accounts or ALL savings and investments? If its the former, the stats could be a bit misleading.
I could have zero in retirement savings account and still retire comfortably based on home equity, passive/semi-passive income from investments and regular non-retirement savings.
Live life now and pay later. Or sacrifice and get out of dept and live happy later when retired. I had a ball and never had the latest and greatest. Cars, trucks, bikes I still kept up to those that always had the latest and greatest, and am ahead now.
Good lord. Anything over 200k is endgame for me.
Don’t save a certain amount. Spend only what you have to and save the rest. While you guys are living up to your earnings, your giving away your compounding.
I'll be honest, that's more than I thought people in retiring age had. I've heard the average American barely has a few thousand dollars in the bank. I realize here they're referring to retirement investments and probably bank accounts also, but again, I'm surprised as that's more than I thought - which is a GOOD thing.
Since the Earth will be done in 6 years, why would anyone save... or so the narrative states. Perhaps it is time to have the conversation with AOC, Greta and others, that planning for the future may be more than EV's and elimination of fossil fuels. Just consideration.
Keep in mind the average of $221k is skewed higher by the ultra wealthy, More sobering is the mean savings
One of the first things I noticed as an early 20 something entering the workforce: Pensions aren't really a thing anymore and social security is a joke. I've been packing away savings hardcore ever since
Not only that but they make it so difficult and unrealistic to collect it when it comes to raising the age etc, it's almost not worth it
honestly yes. Even tho I haven’t finished university yet, just working is EYE opening. Really hard to save in general, I decided to stop hanging with anyone honestly, too expensive. I wanna stay some years in the USA then GET OUT lol
Funny how these talks never consider the loss of purchasing power of the dollar in their long term compounding interest excitement. If you are looking at the actual reality, the gains you perceive are much less.
I know a lot of people close to retirement age who would like to have $221,000.
For my wife and I if we consider where we crossed the $2M mark it was 49. While we combine things and jointly own the house we have similar incomes and retirement savings so each had that $1 million net worth. Almost 2.5 million now thanks to housing and stock market.
Actually, I think that it is worse than $200K. 200K is an average - if you take all of the retirement money and divide it by the number of retirees, you get $200k. If you rank everybody from low to high and select the guy in the middle, you get a median of less than $100,000. Vanguard comes out with statistics about it every year. The reason the average is $200k is that the wealthy skew the average upwards.
This is wild. My wife and i became millionaires at 39, and i still feel like im behind 😂
Same. Wife and I are just turning 39 and knocking on the door of being a millionaire. But it's all invested (except the value of our house) so we dont ever see any of that money. We still save and put away, but it's still hard living right now
$221k is good to me but i'm late... on saving on retirement.
At this rate I will retire in my mom’s basement
I will work til i drop🤣🤣 jk..i am doing my best to save a lil...being a millenial is not easy🥲
Great video guys! We have to keep educating people on this. Many just don't get it.
Looking for where to begin putting in some funds that will aid me after retirement. Saving up isn't giving anything in return
As somebody who saves a lot and maxes my contributions, I still dont know how median income people can possibly save enough for retirement
They can't save anything. The middle class is the new white trash
Average or Median? Per couple or per person?
Does this $221K number only include avowed retirement assets like IRAs and 401Ks, or does it include all financial assets regardless of the type of account they're in? How about real estate owned? A lot of these alarming statistics are cooked up by brokerage houses who are looking to manage more assets.
In my case, I only consider the money I have in investments. I never include my real estate, my employer sponsored retirement plan or any employer sponsored deferred compensation plan, just my personal investments.
At present I will be able to supplement my employee retirement with my investment income so I will be earning my pre-retirement income after retirement and still have a surplus of investment income.
inflation is cranking up the suck factor in retirement as well.
I was lucky enough to get started saving money early @ 21 yrs old into 401K and have a lot of money in there after 37 years... been into 7 figures for 5 years now... It is truly amazing how the power of compounding works... I've been maxing the 401K and Roth for 9 years now... It is sometimes sad to have to go to work and get paid peanuts compared to what I make in the stock market in one day.. Sometimes Ill make 50-100 thousand dollars in one day ( of course I might give 40 thousand back the next day ) while I'm making $350 that day at work... Ill be retiring as soon as im 59 1/2, which is in about 1.5 years.... The only thing that i would have done different if I would have known... Was that I would have started a Roth when I was 21 also because all of that money including the capital gains will never be income taxed... I didnt start a Roth until about 12 years ago, but I was lucky enough to get that money invested into tesla, so the future looks bright....
I dont know about 37 years ago but 401ks now let you invest traditional or roth or a combination of both. Roth 401ks are seperate from the roths you can only invest 6500 or 7500 if youre over 50. I always tell people to invest mainly with after tax dollars but you should still invest a little in pre tax
Btw you must really love your job because you can retire anytime and the money you take out early will only be penalized 10 percent. Sounds like you could have retired a long long time ago. Im not sure what its called but you sound like you may have a compulsion disorder where it would bother you irrationally to not wait til 59 1/2. Good job saving that much though
The best time to start saving for retirement is the day your born! Parents stop buying the crap we don’t need and start a retirement account.
Preferably a Roth retirement account. Taxes are a huge factor.
Kind of hard to save for retierment when just existing takes all my money.
It's not how much you make, it's how much you keep.
#9 is completely correct
What licenses would a person need to do what they do?
The bad news is...... what the money you grown is ACTUALLY worth after subtracting the depreciation caused by inflation.
Keep this in mind, teachers are third in net worth THIS DOES NOT INCLUDE THEIR PENSION. Let’s say they average 50K a year in pension with COLA you could say that is like a million dollars
Delusional if you believe that Americans are retiring with that much money! The vast majority I believe are retiring with far less or without anything at all! I know several who didn't even make it to retirement due to health issues that wiped them out financially and will be living on disability for the rest of their lives. I 'd like just once for one of these shows to gather REAL statistics of how many Americans retire with any money saved. What percentage of Americans are on disability? What percentage only live off SS? The majority of Americans would probably think $220k was a huge amount to retire on! You are not factoring in the majority of Americans that live below the poverty line and have never made enough to save. It's only going to get worse with the political and economic climate for future generations of retirees.
The fact is there is no cookie cutter retirement. Nor is there a cookie cutter financial plan. Everyone has different ideas of retirement. I retired early due to health issues. After a year I have recovered sufficiently to work a couple of part time jobs. Even though I Loved my old job, it was highly stressful and demanding. I have no stress, of course I don't make the money that I did.
But I can work if I want or don't. I took my first disbursement from my retirement account, not because I need the money, I wanted to take some out while the Trump tax cuts were in effect and get it taxed at 12% and then deposit it into my Roth IRA. Expenses drop significantly in retirement with the exception of health insurance which is ridiculous. If you are younger and invest for retirement, use a Roth IRA. Taxes will likely be much higher in the future. Good Luck
The Teacher stat is a little misleading. Nearly every head-of-household teacher has a side gig (begins w/ summer free time). The side gig ends up earning more than their teacher salary, yet they continue to identify as a teacher. Try asking a few. I think Dave Ramsey still calls himself a teacher....PLus, until recently, nearly all teachers received a full pension including healthcare, LTC, and life insurance, and pension money until death with COLA. That is changing for the current new hires, but historically, teachers have done well. Don't fall for the helpless, "Im a teacher and Im poor"
this video gave me the impression that you folks do not have any compassion and are all to happy to belittle people who have less than you and maybe haven't made all the best decisions ... I am sorry, but i just didn't sense you were out to help people ... I wish you the best ... hopefully my impressions were incorrect ...
How is your mic this bad
Listen to these guys! I’m 43. I started saving / investing heavily at age 20 just as they recommend. I don’t have as heavy today as I did then but I am in the “messy middle” right now. 5 person household with 1 income. That said, no consumer or student loan debt (I didn’t go to college), 2 years left on the mortgage [400k property] and 1.7M invested in mutual funds. Not a single stock or coin in sight. On pace to retire at 55 years old with 5M invested. These guys are giving you the recipe for success! Get that “Army of Dollar Bills”!
Before all the ranting, how about actually looking at the source of the numbers? The oft quoted retirement savings amounts come from financial institutions. A large number of us have money in multiple accounts with different financial institutions. Before retiring I had savings and retirement accounts with three financial institutions , total of 5 different accounts not counting savings accounts with two banks. My wife also had several accounts.
If I could go back to my 20 year old self I would read myself the riot act. Didn't start really saving to 35 but I buckled down. About to retire now and have a good nest egg. I can't imagine retiring with 221k. Don't know if they teach this now in schools but they should as never done when I was in school.
Dude I'm 29 and can't even find a job that pays. Still living with my dad. I got a job offer for $17.50... All men should be making $23.00 starting out
If you're living on $8,000 a year from your investments and social security you aren't paying much in taxes if anything. Also, teachers receive pensions. I know teachers that meet the criteria in one district to qualify for their pension at retirement and move to another district to become vested in that district's pension fund. I don't disagree with you encouraging people to invest and save for retirement, which is necessary but be more transparent please.
Don’t make assumptions about teachers. I’m an elementary school teacher and I make well over 6 figures in base salary.
Invest 15-30% in low cost index funds like VTI throughout your life and ignore the rest...the secret to millionaire status.
These lack of retirement assets scare me!
Teachers DO make good money when you take into account unions associated pensions. Same for government lackeys.
I got completely wiped out with stocks in my 401 k 27 years gone retirement is not reachable with naked short selling a issue
11:00 I'm 58 years-old...and 30 years since completing my MBA. My financial picture at age 38, 48, and today look a lot like this chart. I retire in 9 years, and am hoping to reach the last bar in this chart at that time.