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I would say the number is closer to being accurate than not, but as a Millennial myself, I simply can't see many people making this target whatsoever.
I'll be 30 next month, single, and make $63k with bonus in a low COL metro. That figure is thirty years of gross wages for me. Most people I know around my age are making less than I am if they live in a cheap area. If I moved to a major coastal metro, I'd need to make about $100k, give or take, to have an equivalent standard of living.
There are plenty of Millennials who are doing well, but as the story goes, many have been burdened by high student debt loads, a poor job market (I was 27 when I got my first professional level job), underemployment, etc.
I just don't see how most Millennials have a prayer of getting even somewhat close to that.
No big deal. The number is based on a 2% inflation rate. 2% is historically very low. If inflation is more like the historical 3.5% average.....well, you do the math.
No big deal. The number is based on a 2% inflation rate. 2% is historically very low. If inflation is more like the historical 3.5% average.....well, you do the math.
My math starts with an assumption of a 2% DEflation rate .... negative interest at banks including service charges for all accounts ... falling wages ... high underemployment ... BK left and right ... and so on.
The OP didn't calculate for compound growth when he calculated this as 30 years of gross income. Over a more typical 45 year career, at an annual salary of 63,000 with a 3% income growth rate and a 5% investment return rate and 2% annual inflation, the OP only has to save about 15% of salary to achieve 1.8MM in current dollars at retirement.
The OP didn't calculate for compound growth when he calculated this as 30 years of gross income. Over a more typical 45 year career, at an annual salary of 63,000 with a 3% income growth rate and a 5% investment return rate and 2% annual inflation, the OP only has to save about 15% of salary to achieve 1.8MM in current dollars at retirement.
True - I just did a raw number. Still, it's a ton of money for the average wage earner. Assuming someone starts a career at 25, that's retiring at 70.
Depends entirely on your COL. If you are in San Francisco or New York, not nearly enough. If you are in (choose your small town here) you won't need nearly that amount.
Honestly I think Millenials' retirements are going to be short or not at all. I wouldn't count on any social security either.
Also, 1.8 mil is lower than I have read in the past.
Agreed, but it's so far out (at least thirty years for most Millennials) and society is evolving so quickly that it's extremely hard to predict what the next thirty years will be close.
Thirty years ago, an iPhone's capabilities would have been unimaginable for a device so small. Ten years ago, text messaging was crude, at best. Today, it's considerably more sophisticated.
I'm more worried about Millennials being automated out of the workforce and having a permanent underclass than retirement, per se.
Agreed, but it's so far out (at least thirty years for most Millennials) and society is evolving so quickly that it's extremely hard to predict what the next thirty years will be close.
Thirty years ago, an iPhone's capabilities would have been unimaginable for a device so small. Ten years ago, text messaging was crude, at best. Today, it's considerably more sophisticated.
I'm more worried about Millennials being automated out of the workforce and having a permanent underclass than retirement, per se.
yeah i assume we will be living in some sort of post baby boomer revolution regime
I have no major ill will toward them but any objective observer has to be astounded at the level the boomers oversaw dismantling of the social safety net for the next generation, path to the middle class. From tuitions to pensions. And with their final goodbye they may well break social security.
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