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To arrive at the scary 40% required savings rate, the article assumes an accumulation period (working lifetime) of 30 years. How many people do you know who st

• aero142 16y ago
  Not many, but I do know lots of people that didn't start saving for retirement until 30 or later.
  • amh 16y ago
    People who save nothing until 30 likely have poor money management habits, and are in for a rough ride no matter what the expected return of the stock market is.
    • joezydeco 16y ago
      Right. Because those stagnant wages and exploding health care costs have freed up all that extra money for the middle-class worker.
      • amh 16y ago
        I'm sure it had nothing to do with racking up an average of $10-20k in credit card debt and taking out highly leveraged mortgages with the assumption that ever-increasing real estate values would make up the difference. Saving early is more important than saving a lot. That's the magic of compound interest. Even during the recent recession, inflation has been very much under control. So I'm not sure what "stagnant wages" have to do with anything.
        • ahoyhere 16y ago
          I'm sure that racking up $10-20k of credit card debt had nothing to do with the fact that there's no reliable social safety net, no affordable healthcare, cash prices for medical procedures (like a doctor looking at you for 5 minute) are sky-high, the cost of gas and food staples is redonkulous, and, oh yeah, no such thing as affordable public universities any more. The people who got those ridiculous mortgages were snookered in a shell game. If a person can't trust his mortgage broker, who can he trust? But, all that good financial education they got in school should have prepared them for that. Wait, it didn't? NO WAY!
          • philwelch 16y ago
            How many medical procedures have you seen the cash money prices for? In my experience, major open surgeries can be paid for with just over $1000 down and between $50 and $100 per month for a few years. As for mortgages, what's the saying? You can't con an honest man? People pay more money for take-out coffee than it costs to make a decent and nutritious meal, and this is considered perfectly normal. It's not impossible to be fiscally responsible, just unfashionable.
            • joezydeco 16y ago
              $1,000 down and $50/month? Wow! I know a couple of cancer patients that would love that plan. Maybe after they're gone, their families can keep up those payments instead of being bankrupted like they are now.
              • philwelch 16y ago
                Cancer's a tough one--frankly, it's one of the reasons I pay for catastrophic insurance ($50/mo in WA). This was for a one time surgical operation. Long term ongoing care, as you've noticed, is gonna be a lot worse. That's what insurance is supposed to be for, not small shit like doctor's appointments, or manageable shit like surgeries. (Assuming you aren't covered by your employer or the government.) The down payments, all told, were somewhat over $1000, $1200 or $1300 as I recall, and that's for anesthesiologist + surgeon after some amount of negotiation. The hospital had an assistance program that covered their end of the costs, which would have easily matched or exceeded the surgeon's bill otherwise.
            • ahoyhere 16y ago
              My friend Jason pays for everything in cash. He broke his arm; they initially wanted $20k, and he then talked them down to $16k. The price for my sinus surgery was $40k. Hell, when I went to the ER because I had pneumonia, and no insurance, I paid $700. Where are you finding these prices for surgery - Tijuana?
              • 16y ago
        • joezydeco 16y ago
          I'm sorry, how many raises have you had in the past five years? Keep the personal debt out of the equation for now. The fact remains that while inflation is "under control", it's not zero. And the costs of other necessary things (esp energy and healthcare) have continued to rise well beyond the "under control" range.
    • another 16y ago
      ... or they acquired a PhD. (in other words, exactly what you said)
• roc 16y ago
  Accumulation period is distinct from employment period. How many people do you know under 35 who were seriously saving 10% toward retirement?
  • robryan 16y ago
    People should be realistic, if they want to retire with a decent income then they should save. If they don't save then get angry about it later then they don't deserve much sympathy.
  • Poiesis 16y ago
    (raises hand) Although to be fair it only reached 10% after 401k matching kicked in, if I recall correctly. Can't pass up free money.