LOL!! What’s a 401(k)?
Cut back on spending, max the 401k, put every other penny into a brokerage or high yield interest savings account, and if your mortgage in under five percent, make the minimum payment.
The median figures are shockingly low to me. I’m closing in Medicare, way too low of savings to think of retirement. But close to average so way above median.
Less than 300k even at 65 as an average, even worse the median is less than 90k at 65, no way anyone is retiring on 300k and 90 is nothing more than a poor reserve savings.
Truth is if you do not have at least 1 million in your 401k at retirement you will not have a good retirement, you will have a future at McDonald’s or Walmart, which is why so many retirement age people work there now.
Happy to say i have more than 4X the average balance at my age group.
I have worked for the same company for almost 38 years. A year into the job, when i wasn’t even 24YO, one of the old timers came to me and said, “Did you sign up for the 401K yet?” I said, “nope.”
He replied, “I’m going to get the form and we’ll sign you up now.” He sat down and filled out the form with me. When it came to the % of contribution he said, “put 10% there”
I thought to myself, “10%??? When he’s not around i’ll change it to 2%”....I never did as much. I used the money 35 years ago to get out of credit card debt then used the money 7 years later to purchase a condo in foreclosure.
It was the greatest bit of financial advice i ever received.
Compound Interest is the 8th Wonder of the World.
And now I’m going to talk about a dumb guy. He opened a 401(k) when he was 25. But he was overly cautious, and put most of his contributions into money market and short-term bond funds.
He didn’t consider that time will smooth out stock market fluctuations. This dumb guy finally fully diversified into stock funds, but he wasted 8 years before doing that.
That dumb guy is me.
| Age Bracket | Average 401(k) | Median 401(k) |
|---|---|---|
| <25 | 7 | 3 |
| 35-44 | 91 | 36 |
| 45-54 | 169 | 61 |
| 55-64 | 245 | 88 |
| >=65 | 273 | 88 |
Retired, DEBT FREE at age 56. It can be done! Followed Dave Ramsey and a few other money people, lived BELOW my means (I know - what a concept!) and used credit wisely. Paid for college as I took classes along the way.
Granted, my healthcare is through the VA as a Veteran, so that was a large part of the puzzle that allowed me to retire early. ;)
I have my future room reserved at the Vet’s Home in Chippewa Falls for when the time comes if I end up all alone in my end years. (Statistically, I will.)
Never had a 401, I wasn’t interested. Instead we bought a bit of property while in CA when it was half way reasonable. The folks I do know who did the 401 thing do a lot of bitching about government and the banks taking more and more of it.
It’s worked out well for us...We don’t blow money on stupid things like cruises, buying boats, new cars etc... We laugh because if we had tons of money we still wouldn’t be interested in traveling or whatever old people think they need to do...We made our compound so nice, except of local travel, leaving the compound it rarely crosses our mind or even interests us. In fact, even the thought of airports and traveling with the public nowadays makes us shudder at the thought...No joke..LOL!
A 401k? Hoarders, everyone of them! Other people need money, too. /s
Interesting they have 401ks instead of 401ks plus IRAs. When I change jobs I rollover the money into my own account so I don’t have to deal with the company anymore.
Fortunately for me, I won’t have a problem because of my 401(k) is 5 1/2 times more than the average for a 65 year old guy. Additionally, I’ve been blessed to have made some money in the market over by lifetime in addition to owning a business. I’m glad I figured this out when I was in my 30s and did not wait till I was older. My advice to you youngsters out there is save, safe, safe, invest wisely.
Thankfully I’m outside the norm and I didn’t start saving till I was 45... It was at that point I figured I might live awhile. Went max contribution then went government for the pension as well. Retired 17 years later and doing fine.
Two years, I was checking my online banking and I could see in my IRA about the average from the article and knew I couldn’t retire. One morning, I used my wife’s laptop using her account and I saw different numbers, about double what I could see. We met with our advisor and he told me to retire. I was due a state pension so I called my boss and gave 8 months notice. I postponed Social Security because I thought I might go back to work. I go back tomorrow but I can’t possible make enough to exceed the SS limit. Luckily, the state limits how many hours a pensioner can work by making them a wage employee.
This literally was the power of investing early in your life.
All —
Read the article carefully: The stats are limited to 401(k) defined contribution plans. They do not include IRAs, Roth IRSs, SEP IRAs, and most importantly, Rollover IRAs. Any person who had a 401(k) likely moves the assets to Rollover IRA when they changed jobs or retired.
For example, I am 65. My Vanguard 401(k) has a balance of ~$6,000, and that’s only because the partnership I belong to requires all partners to maintain a 401(k) account. My Rollover IRA and our Traditional IRSs, however, have a balance of ~$8 million (with $0.00 in debt).
According to the Vanguard statistics cited in the article, we are retirement poor and will have to work the rest of our lives just to survive on cat food. But based upon the value of our total portfolio, we can live on $320,000 a year plus SSI (~$70,000 per year), and never touch the principal balance.
In short, I am working until I am 90.
The median figures indicate that the majority of people at every age are going to be poor in retirement.