Question must be - how does one retire on $1M? What kind of passive income one could hope for reliably considering one doesn't have a right for mistake when they are 65+ because there's no way to start over, so "rent some servers with Solana stake" is not a viable strategy.
10% of retirees have $1M+ in savings
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Re: 10% of retirees have $1M+ in savings
#42For those in the US trying to do retirement planning I highly recommend trying: https://projectionlab.com/ I first saw it shared on HN and I've been a happy customer for the past year and the ability to compare the impact of different scenarios has helped me make a few big financial decisions. Good community around it for asking questions too.
Thanks for this link. Super valuable! I'm not clear on how it's considering 529s (for you, or for kid[s]?). I wish the "about you" allowed you to add kids and their projected college years into the financial plan.
It's worth making the feature suggestion via discord or e-mail. I've found the developer to be very responsive.
Re: 10% of retirees have $1M+ in savings
#43For those in the US trying to do retirement planning I highly recommend trying: https://projectionlab.com/ I first saw it shared on HN and I've been a happy customer for the past year and the ability to compare the impact of different scenarios has helped me make a few big financial decisions. Good community around it for asking questions too.
Thanks for this link. Super valuable! I'm not clear on how it's considering 529s (for you, or for kid[s]?). I wish the "about you" allowed you to add kids and their projected college years into the financial plan.
That is in the Plans section. Are you in the phase of building a 529 or withdrawing from one? Either way, the app supports it and both of them are in the Plans section. In it, you can prioritize your cash outflow to build a 529 or include it as part of your inflow if you are withdrawing from one.
Re: 10% of retirees have $1M+ in savings
#44Earlier quoted context omitted.
A McDonald’s worker who starts today aged 18 who makes $15/hr and joins the McDonald’s 401k plan and contributes 4% of their income to it and works at McDonald’s for 50 years never receiving a raise should expect to have very close to $1 million by the age of 68. And that’s just 4%. McDonald’s has a 6% match.
1M is the target today. What does that have to do with 50 years from now?
That was just a silly little example of how if someone saves $24 per week over the course of a lifetime it can expand into great sums of money through the miracle of matching and compound interest.
And that was at 7% returns. Over the last 50 years the market has averaged 11% so if half a century ago (let's pretend 401ks are that old they're only 46 years old) an 18-year-old entry level worker emptied trash cans at an amusement park that had a 401k with employer match for 50 years they would have a vast sum of money today.
There are some people who cannot afford to save 4% of their income.
There are so few people who can genuinely not afford to save 4% of their (pre-tax) income that they are irrelevant to discussions about retirement saving.
Re: 10% of retirees have $1M+ in savings
#45Finance news is for rich people and this article proves it, talking like it's a choice whether you retire with $1 million or not. If you're thinking you're not rich but still interested in finance, then you're probably rich! ;) The article breezes past that the median retirement saving is actually $164,000, which makes sense as the median salary is ~$60,000.
> The article breezes past that the median retirement saving is actually $164,000, which makes sense as the median salary is ~$60,000.
Anyone who tells you that the middle class should expect a meager retirement is an ignoramus who should be ignored at all costs.
The median household income is ~75K/year. If this household started saving (from zero!) at age 35, saved 10% per year and got a 6% return for 30 years, they would have ~$600K saved for retirement by 65.
The simple truth is almost everyone can retire in reasonable comfort and with peace of mind if they follow a few simple rules: - Avoid high-interest debt like the plague. - Get in the habit of saving 10% as early as possible - Have an emergency fund in cash, but don't keep more than ~3 months expenses in cash. Invest! - Use tax-advantaged vehicles like 401K/IRA - Invest in broad-based funds with low fees (ex: VO, VOO) - Don't pick individual company stocks. If you must, never invest more than 5% of your portfolio. If you do, know that you're not "investing", you're gambling! - Don't try to time the market. Dollar cost average. Buy and hold. - When you hit 100K, meet with a financial advisor who is a fiduciary and who charges by the hour. Not a stock salesman, not a portfolio manager, an advisor. Heed their advice. Check in every 5 years.
Re: 10% of retirees have $1M+ in savings
#46Earlier quoted context omitted.
Thanks for this link. Super valuable! I'm not clear on how it's considering 529s (for you, or for kid[s]?). I wish the "about you" allowed you to add kids and their projected college years into the financial plan.
That is in the Plans section. Are you in the phase of building a 529 or withdrawing from one? Either way, the app supports it and both of them are in the Plans section. In it, you can prioritize your cash outflow to build a 529 or include it as part of your inflow if you are withdrawing from one.
I'm building 529 balances for two kids, and I have future "school" dates for both, along with expenses for both starting at those future dates. I guess I'm not understanding how it's working in the plan & cashflow, since I'm seeing the cash outflow for the expenses, but I'm not seeing the cash inflow from the 529s (since they're the owners of them)?
Re: 10% of retirees have $1M+ in savings
#47For those in the US trying to do retirement planning I highly recommend trying: https://projectionlab.com/ I first saw it shared on HN and I've been a happy customer for the past year and the ability to compare the impact of different scenarios has helped me make a few big financial decisions. Good community around it for asking questions too.
Gave this a try and have to say, these visualizations are super useful and for me. Opened my eyes quite a bit to a concept that seems obvious: $1k spent now isn't just $1k spent, it's $1k not invested and growing over the rest of your life.
Far too much of my own money has been squandered on living in the now, and tools like this help give me the tools to grasp what it really means to tweak the balance of spending and saving when viewed over the long run.
Re: 10% of retirees have $1M+ in savings
#48Earlier quoted context omitted.
That is in the Plans section. Are you in the phase of building a 529 or withdrawing from one? Either way, the app supports it and both of them are in the Plans section. In it, you can prioritize your cash outflow to build a 529 or include it as part of your inflow if you are withdrawing from one.
I'm building 529 balances for two kids, and I have future "school" dates for both, along with expenses for both starting at those future dates. I guess I'm not understanding how it's working in the plan & cashflow, since I'm seeing the cash outflow for the expenses, but I'm not seeing the cash inflow from the 529s (since they're the owners of them)?
The Cash Flow tab is the result of the inputs in Plan, so no inputs needed there. In the Plan tab, lower right, you will see the 'Cash Flow Priorities'. There you enter the details (time span, amount, etc.) of the build up phase. In the 'Income' section you can enter the withdrawal phase on your "school" dates, as cash inflow. You can add each kid their own entries for different withdrawal date span. Under the 'Expenses' tab is where you put the details of the outflow (ie. expenses) during the "school" dates.
HTH
Re: 10% of retirees have $1M+ in savings
#49Finance news is for rich people and this article proves it, talking like it's a choice whether you retire with $1 million or not. If you're thinking you're not rich but still interested in finance, then you're probably rich! ;) The article breezes past that the median retirement saving is actually $164,000, which makes sense as the median salary is ~$60,000.
> The article breezes past that the median retirement saving is actually $164,000, which makes sense as the median salary is ~$60,000. Anyone who tells you that the middle class should expect a meager retirement is an ignoramus who should be ignored at all costs. The median household income is ~75K/year. If this household started saving (from zero!) at age 35, saved 10% per year and got a 6% return for 30 years, they…
10% before or after taxes? I'm in Canada, so the difference is enormous.
Re: 10% of retirees have $1M+ in savings
#50Finance news is for rich people and this article proves it, talking like it's a choice whether you retire with $1 million or not. If you're thinking you're not rich but still interested in finance, then you're probably rich! ;) The article breezes past that the median retirement saving is actually $164,000, which makes sense as the median salary is ~$60,000.
> The article breezes past that the median retirement saving is actually $164,000, which makes sense as the median salary is ~$60,000. Anyone who tells you that the middle class should expect a meager retirement is an ignoramus who should be ignored at all costs. The median household income is ~75K/year. If this household started saving (from zero!) at age 35, saved 10% per year and got a 6% return for 30 years, they…
Also, usually the problem I encounter is that people need all that money to live "middle class" level, and the expenses are all upfront.
Don't get me wrong, I agree with you. They could pass onto the 50K wedding and repeated very expensive holidays.