2022 Real Estate Observations (lawyers, subsidized, taxes)

[Higherho]

Originally Posted by matrix5k

Just like 100k isn't what it used to be, 1 million isn't what it used to be either. Most people I know are trying to get at least 2-3 million before retiring to keep their current lifestyle.

Look at the gap between millionaires and the middle class. It’s quite drastic, and there isn’t many millionaires by percentage when you do that comparison. Also, not everyone has 2 + million in their 401ks, these are even smaller numbers compared to the average. It’s extremely unrealistic you will live the same life style you do in your 20s/30s/40s when you’re 65+. I’m not saying you can, but it’s not a thing for the vast majority. The 401k system isn’t a retirement plan either (it’s a savings plan) in terms of the tax code.


https://www.personalcapital.com/blog...k-balance-age/


https://www.fool.com/investing/2022/...t-quarter-how/

[bricka]

1 in 10 adults in this country are millionaires.

within the 60-64 age group it increases to 1 in 5.

[msRB311]

Originally Posted by matrix5k

Just like 100k isn't what it used to be, 1 million isn't what it used to be either. Most people I know are trying to get at least 2-3 million before retiring to keep their current lifestyle.

And this is probably triggers people to save so much

[matrix5k]

Originally Posted by msRB311

And this is probably triggers people to save so much

Is it so much though? If you max out your 401k for 40+ years that would easily get 2-3 million. Thats without saving anything in taxable accounts.

[msRB311]

Do all people at the age of 22 (first job out of college) max out their 401? I know I didn't. I do now...but I didn't start doing that until i was 40. I think people are better about it now...I feel like I had a lot of peers that contributed 3-5% to a 401k in their 20's. This was like 2003ish.

[matrix5k]

I'm sure you have other assets though. Home equity, IRA, taxable account or savings.

According to this article, it takes 22-28 years of maxing out 401k to reach 1 million without employer match. Starting at age 30 with employer match, that should easily be 2+ million by age 65-70.

https://www.fool.com/retirement/401k...k-millionaire/

4% - 28 years
5% - 26 years
6% - 24 years
7% - 22 years

[id77]

Originally Posted by matrix5k

Just like 100k isn't what it used to be, 1 million isn't what it used to be either. Most people I know are trying to get at least 2-3 million before retiring to keep their current lifestyle.

Age factors into it as well. A 60 year old today with 2-3 million (plus Social Security kicking in soon) can probably retire modestly but comfortably, but a 40 year old with 2-3 million who tried to retire would have to severely restrict their spending in order to make it, despite what the FIRE blogs would have us believe. Workers with 25+ working years remaining really should be aiming for 8-10 million before putting in their notice, with that number decreasing as they get older.

Originally Posted by Higherho

Look at the gap between millionaires and the middle class. It’s quite drastic, and there isn’t many millionaires by percentage when you do that comparison. Also, not everyone has 2 + million in their 401ks, these are even smaller numbers compared to the average. It’s extremely unrealistic you will live the same life style you do in your 20s/30s/40s when you’re 65+. I’m not saying you can, but it’s not a thing for the vast majority. The 401k system isn’t a retirement plan either (it’s a savings plan) in terms of the tax code.

https://www.personalcapital.com/blog...k-balance-age/

https://www.fool.com/investing/2022/...t-quarter-how/

The vast majority of millionaires, and especially millionaires under 60, are not 401k millionaires. The 2021 numbers I saw had the US at around 22 million millionaires, yet only around 700k 401k/IRA accounts with a balance over 1 million.

The bulk of their wealth is in taxable brokerage accounts/trusts or real estate. Focusing on the 401k numbers can be quite misleading.

[matrix5k]

Originally Posted by id77

Age factors into it as well. A 60 year old today with 2-3 million (plus Social Security kicking in soon) can probably retire modestly but comfortably, but a 40 year old with 2-3 million who tried to retire would have to severely restrict their spending in order to make it, despite what the FIRE blogs would have us believe. Workers with 25+ working years remaining really should be aiming for 8-10 million before putting in their notice, with that number decreasing as they get older.



The vast majority of millionaires, and especially millionaires under 60, are not 401k millionaires. The 2021 numbers I saw had the US at around 22 million millionaires, yet only around 700k 401k/IRA accounts with a balance over 1 million.

The bulk of their wealth is in taxable brokerage accounts/trusts or real estate. Focusing on the 401k numbers can be quite misleading.

Wow, so 21.3 million of those 22 millionaires don't even depend on their 401k. I gotta start buying property.

[yesmaybe]

I think the vast majority of "rich" people here have their entire net worth in their house and very little assets otherwise.

[bricka]

Originally Posted by yesmaybe

I think the vast majority of "rich" people here have their entire net worth in their house and very little assets otherwise.

ignoring home equity: 10 in 100 U.S. adults have at least $1 million in assets
counting home equity: 12 in 100 U.S. adults have at least $1 million in assets

this is based on federal reserve data

based on this, 2 out of 12 millionaires are using home equity to count themselves as millionaires.