The Average 401(k) Balance of Americans at Every Age

Moneytalksnews ^ | 09/20/2024 | Chris Kissell

[af_vet_1981]

Post 92: I had even written it in bold for the reader.

“The more important question is what was His point, which can be summarized as whether one can treat the money as belonging to the LORD.”

1 Corinthians 8:1-3
Now as touching things offered unto idols, we know that we all have knowledge. Knowledge puffeth up, but charity edifieth.
And if any man think that he knoweth any thing, he knoweth nothing yet as he ought to know.
But if any man love God, the same is known of him.

[SamAdams76]

Kidding aside, some people are very happy living in a trailer and doing nothing in retirement. Most people can afford that and my parents did something similar for 20 plus years with just Social Security coming in.

I'm better situated for my retirement but I don't plan on joining a golf club or taking cruises. I was able to get all the traveling and vacationing out of my system during my working years. It helped that I took every business trip offered to me - why not see the world on the company dime!

Now as I approach retirement, I plan to just sit out on my front porch with my dog and watch the world go by. Maybe take some long morning and sundown walks. Definitely get stacks of books at the library and read them! Listen to music and podcasts all day.

All that stuff is cheap.

[SamAdams76]

You nailed the concept of dollar cost averaging.

People with 401k's or other investment vehicles for retirement savings should never react to the stock market. Just let it ride. In fact, I recommend they don't even watch the stock market.

Early in my 401k, I weathered the crash of '87 and the dot com crash. More recently the Fannie Mae crash of 2008-2009. I never did a darn thing. Just kept plugging the money in paycheck after paycheck. Eventually, the markets came back and I even had more shares to show for it as I was buying new share at lower prices that entire time.

The only thing you should do as you age is adjust your allocation to less risk as you near retirement. For most of my career, I rode a 85-90% stock allocation and even today, at age 62, I still have a 70/30 split in favor of equities. When I do actually retire, the stock allocation will likely never go below 65% as you still want most of your money growing.

[BipolarBob]

Now as I approach retirement, I plan to just sit out on my front porch with my dog and watch the world go by.

That's my life. EXCEPT, medical bills for my wife. The medical industry thinks we are their own personal piggy bank. I can advise her to ignore some of it but they have scaremongered her into buying into their constant scheme of more tests and more visits where they tell her she's doing fine but we need to get some number just a little lower (even though it's still considered in the normal range). It's frustrating.

[Skwor]

My first post simply stated I believe such amounts in the article are insufficient for a retirement if depending on a 401K+SS alone. My following posts in regards to some quoted scripture is sometimes people use it to justify their own envy and that rich or poor neither makes you better in the eyes of God.

You recent post still makes no point relative to any of my posts in this thread. Where have I ever stated it is not the Lord’s? What was your post in response to as far as what I posted?

Rich people are not inherently evil, poor people are not inherently good, money is not an inherent evil, the love of money is the issue. We are commanded to be charitable AND we are commanded to be wise stewards of the same resources. Surely you can see a balance in that?

[af_vet_1981]

Perhaps you meant to post to another since my post ( https://freerepublic.com/focus/chat/4266470/posts?page=92#77 ) was to round earther's comment (as seen here https://freerepublic.com/focus/chat/4266470/replies?c=3),

In any case, I think the first principle of investing is a scriptural principle as I advocated and explained.

For an investment philosophy, I find the Boglehead view to be reasonable.

[SamAdams76]

You can pick apart my 1 million assertion all you want but in context, anyone today depending on a 401k and SS only, which is a majority of people, better have upwards close to a mill or more or they will be working part time in there retirement years eventually, or seeking some kind of aid eventually.

That is how I see it too if all you have is 401k and SS.

With a million dollars in 401k at age 65, you can safely take out $40,000/yr using the 4% rule (adjusting for inflation as you go along). With a Social Security check of $2,000 (about average), that will bring you to about $64,000 a year.

That might be about the minimum you would need to have a worry free retirement. Some can get by on less but they'd be scrimping and saving the whole way. Remember the average household income these days is $80k plus and you'd be about 80% of that in that situation.

Medical is the wild card. Make sure you have supplemental insurance as Medicare won't cover it all.

[dfwgator]

I have a High-Deductible Medical Insurance, so I sock away every penny I can into my HSA.

I believe once you turn 65, it basically becomes like a 401k, in that you don’t have to spend it on just medical costs.

[SamAdams76]

The HSA's are awesome. Unfortunately I discovered that later in life, I opted for the higher premium HMO's when my children were growing up so I had less out of pocket to spend.

However, once the children moved out, I switched to low premium (high deductible) plan and started socking away the HSA money. As I'm in nearly perfect health, I rarely see doctors and I am investing that HSA money and watching it pile up!

HSA has a triple tax benefit: Deposits are tax-deductible, growth (when investing) is not taxed, and spending it is tax-free.

[af_vet_1981]

I believe once you turn 65, it basically becomes like a 401k, in that you don’t have to spend it on just medical costs.

Yes, but if it is spent on other than qualified medical expenses it is taxed as ordinary income (like a 401K); best to use it as intended if one can and it is tax free.

[af_vet_1981]

HSA has a triple tax benefit: Deposits are tax-deductible, growth (when investing) is not taxed, and spending it is tax-free,
as long as HSA is spent on qualified medical expenses, otherwise it is taxed.

[Skwor]

Yep, sorry. I got cross posted, which makes much more sense. I could not find a connection in our discussion and it in substance we appear to be aligned. Once again sorry and thank you for going back to clear that up!

[af_vet_1981]

👍 No hay problema.
Mafish mushkela
Kanena problima
Ein baya
😊