Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
This also assumes no breaks in employment, which is not realistic.
But I do agree with the general thinking. $360K is not a lot but it's still more than most people retire with. Combined with Social Security, it would provide an adequate retirement, assuming your house is paid off by then.
Usually the company match is not a percent of what you put in but a percent of your income. Some companies will match 50% of your contribution up to 8%, for example, so if you put in $1000, they put in $500 up to 8% of your income--so say your total contribution would be 8%, their max they would put in would be $4000. If they do a dollar for dollar up to say 6%, if you put in $6000 (off of 100,000), they would match $6000, but if you put in say $8000, they would still only put in the $6000.
Quote:
Originally Posted by 20yrsinBranson
It depends on when you start. Here is a graphic that helps explain.
20yrsinBranson
This is a concept people here fail to grasp!!!!!! When people come here and talk about taking loans, etc. from 401K's or deferring contributions to 401K's to pay off student loans, they don't take into consideration the time value of money!!!
Even so, it's still better than having NOTHING wouldn't you say? Your statistics go to prove only one thing. Instead of $100, people should be saving $200 or $300 per month instead of spending it on cable television, smartphones, useless vacations and overpriced cars.
As others have pointed out, this is overlaying your own personal utility function on someone else's decision-making. Most of the population disagrees with your valuations of all of these things. That's life. You'll need to be more rigorous -- or at least more persuasive -- if you wish to convince others of the errors of their ways.
I love me some Dave Ramsey...but 12% in not realistic...IMO. I think 6-8% is closer for a 40 year horizon.
Dave Ramsey is basiccally empty calories, and all of these returns appear to be nominal. You can't spend nominal. After adjusting for inflation, fees, taxes, and periodic market collapses, no one is well advised in betting that he or she will be able to realize a real and spendable return of more than 2%. It is, of course, entirely possble to do much worse than that. Just not much better.
Dave Ramsey is basiccally empty calories, and all of these returns appear to be nominal. You can't spend nominal. After adjusting for inflation, fees, taxes, and periodic market collapses, no one is well advised in betting that he or she will be able to realize a real and spendable return of more than 2%. It is, of course, entirely possble to do much worse than that. Just not much better.
you are scaring me , we have been in agreement lately.
personally i am not smart enough to really comment as to whether [Pfau's] calculations would be correct but judging from all the facts and figures he has brought to the financial world i do not feel i am qualified to second guess him.
What's up with that? You try to second guess ME all the time.
Last edited by oaktonite; 07-15-2013 at 08:51 AM..
This is a concept people here fail to grasp!!!!!! When people come here and talk about taking loans, etc. from 401K's or deferring contributions to 401K's to pay off student loans, they don't take into consideration the time value of money!!!
I agree that the illustration makes an important point, but a part of that very point is that a dollar fifty years from now is worth much, much less than a dollar today. Things like 401-k loans and paying off high-cost student loans may make all the sense in the world. Ruling them out in general is just as nonsensical as resorting to them in general.
LOL! Baby-boomers are defined by their birthdates, not by their financial habits. Dave Ramsey is a freaking baby-boomer for crying out loud.
so are you saying that ranges of birth are not good perimeters for defining cohorts? Dave Ramsey is an outlier.
ALSO...I did not intend to bash baby-boomers, so I am sorry.
But...
Fact is...there is great concern over that lack of planning that the baby boomers did when it comes to retirement. Part of it is generational, part of it is the marketing of credit that previous generations did not have.
List of Thirteen Baby Boomer Facts and Statistics:
On average, every ten seconds, another baby boomer will turn 65.
25% of baby boomer have no retirement savings. (source – AARP)
Two-thirds of people aged 65 or older have one or more “chronic diseases” and see seven doctors. (source – AMA)
40% of baby boomers survey intend, or will be required, to work “until they drop.” (source – AARP)
One third of Americans over 65 rely on Social Security for nearly all of their income. 75% of Americans claim their benefits at age 62 as soon as they are eligible – this is out of necessity. (source – End of the American Dream)
The number of non-government workers for each person receiving social security benefits is 1.6. In 1945, that number was 42. (source – The Economic Collapse)
In 2015, people 50+ will represent 45% of the United States population (source – AARP)
According to a Nielsen survey, boomers spend $230 billion on consumer packaged goods, of 55% of the total. (source – Nielsen)
Of the nearly 200 million U.S. internet users, approximately 70 million are older than 50. (source – Jupiter Research)
By the way, I used the savings calculator on my employer web site to come up with the numbers in the OP. I will look into it further to check whether the numbers are correct.
Even so, it's still better than having NOTHING wouldn't you say? Your statistics go to prove only one thing. Instead of $100, people should be saving $200 or $300 per month instead of spending it on cable television, smartphones, useless vacations and overpriced cars.
20yrsinBranson
So what exactly will you be spending your oh so precious savings on when you retire?
Oh, and tell me you don't own a smartphone nor take vacations, please tell meh! Oh, make sure you also drive a beater. Oh and pleeasseeee make sure the spouse and kids also ride in a beater, who needs safety when you save a few hundred bucks each month that may never be used when you're dead.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
