3 ms·

> It’s not over-hyped. If you play around with the numbers, the ~$22k per year (increases a little each year usually) you can put in a 401k is insufficient to r

> It’s not over-hyped. If you play around with the numbers, the ~$22k per year (increases a little each year usually) you can put in a 401k is insufficient to retire on, even if you start at age 20 and max it each year till 55 Over the last 35 years, that would have netted you about $3M in today's dollars. You could argue that's not enough to retire on at 55 (although I'm sure many can), but if you keep it up to 65 that's $6M. Easily enough to retire on.

symlinkk 3y ago
Not to mention Social Security kicks in once you hit your 60s.
- gymbeaux 3y ago
  Is SS in the constitution? Show me where social security payments are an American right guaranteed by the federal government.
thunky 3y ago
Right, but that's also assuming the person is 100% invested in the stock market all the way up to their retirement. That's a lot of risk.
- ska 3y ago
  Sure, but more conservative and balanced approach still puts you in really decent shape. 4mm instead of 6 maybe. So that's not the problem, the problem is with the idea that you start max contribution in your 20s and keep it up. To a first approximation, nobody does this. The real way that people run into trouble with voluntary saving (tax sheltered or no) being relied on is something like this: 20s : bad salary, don't save much 30s : making better money but getting married and having a couple of kids 40s : man those kids are expensive, putting college funds together, saving a little bit. oh well at least we're building house equity. 50s : huh, we should think about saving. finally can live a bit though. 60s : oh crap, no way to catch up
  - hotnfresh 3y ago
    Ding ding ding. We started to hit “we could save enough to retire at 55, or 60 at worst” money just as we started having kids. The added health insurance costs, healthcare costs (and our kids don’t even have any huge problems!), housing costs (unless we’re OK sending them to bad schools), lost wages due to time staying home caring for them, child care costs before they started school, et c… that stuff topped a quarter million before I stopped counting, and it went way higher after that. The kids have gotten somewhat cheaper as they’ve gotten older! But having that ultra-high cost front-loaded cast like a million-plus dollar shadow on our likely at-60 savings (due to opportunity cost), not even counting the ongoing costs and the effects those are having. Retiring at 65 is now iffy…
gymbeaux 3y ago
I probably meant to say 59 1/2 rather than 55. I often mix those two. 55 is when you can move to those 55+ communities, 59 1/2 is when you can pull from retirement penalty-free. 65 is when social security benefits kick in, including Medicare.

symlinkk 3y ago

Not to mention Social Security kicks in once you hit your 60s.

gymbeaux 3y ago
Is SS in the constitution? Show me where social security payments are an American right guaranteed by the federal government.

thunky 3y ago

Right, but that's also assuming the person is 100% invested in the stock market all the way up to their retirement. That's a lot of risk.

ska 3y ago
Sure, but more conservative and balanced approach still puts you in really decent shape. 4mm instead of 6 maybe. So that's not the problem, the problem is with the idea that you start max contribution in your 20s and keep it up. To a first approximation, nobody does this. The real way that people run into trouble with voluntary saving (tax sheltered or no) being relied on is something like this: 20s : bad salary, don't save much 30s : making better money but getting married and having a couple of kids 40s : man those kids are expensive, putting college funds together, saving a little bit. oh well at least we're building house equity. 50s : huh, we should think about saving. finally can live a bit though. 60s : oh crap, no way to catch up
- hotnfresh 3y ago
  Ding ding ding. We started to hit “we could save enough to retire at 55, or 60 at worst” money just as we started having kids. The added health insurance costs, healthcare costs (and our kids don’t even have any huge problems!), housing costs (unless we’re OK sending them to bad schools), lost wages due to time staying home caring for them, child care costs before they started school, et c… that stuff topped a quarter million before I stopped counting, and it went way higher after that. The kids have gotten somewhat cheaper as they’ve gotten older! But having that ultra-high cost front-loaded cast like a million-plus dollar shadow on our likely at-60 savings (due to opportunity cost), not even counting the ongoing costs and the effects those are having. Retiring at 65 is now iffy…

gymbeaux 3y ago

I probably meant to say 59 1/2 rather than 55. I often mix those two. 55 is when you can move to those 55+ communities, 59 1/2 is when you can pull from retirement penalty-free. 65 is when social security benefits kick in, including Medicare.