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Don't kid yourself. No matter how much you have, you always want more. And the more money you accumulate, the more you "need" to get the same rush and/or feeling of security. Wealth accumulation can be an unhealthy addiction if you aren't careful (Ask me how I know!! )
And things change as you get older. When you're 43, it's harder and more expensive to change careers; and how long can most people live on $135K???? For most of us, it would only last a few years before it would be gone. I'm a few years younger than the OP, and I can testify how discouraging the market performance has been. I've got 135K, but I know I've had negative returns. I would have been better off putting my money in money markets or stable value funds all these years.
Sorry, I didn't proofread that, I meant to say I would not be comfortable with that amount at that age, even though it is twice what I have, I have only really been working at this well paying job for 2 1/2 years. I'm not sure how much I would want at that age, probably closer to $250K.
Market returns were really an issue last decade, if you invested heavily in large caps, you got nothing basically, didn't even keep up with inflation, small caps did much better. I was reviewing the options in my 401k lately and there was a fund Fidelity has that averaged 11% annualized last decade (where the Dow had like 0%), I looked to see what it was, and they mentioned their strategy was to invest in stocks with prices less than $35, my reaction to that was like WTF!?? How can that work??? The income and bond funds had about 3 and 5% respectively. The lucky people probably invested in that crazy fund while the rest of us probably had it in the S&P500, maybe tech stocks in 2000 (I graduated high school in 2000, so I mostly avoided that bubble), which would really put you in a hole. It seem that everyone will have to be more proactive, because this auto-pilot idea doesn't seem to get us anywhere.
As for how much one will ultimately need depends on what they need to spend money on, which is a pretty hard question to answer. If I were to keep my lifestyle I think I would need $50K/yr income (in 2009 dollars) at least initially, then it would probably have to go up to account for health care costs, that seems to mean at least $1.25M, probably more as health care costs go up from age 65 to age 75 to age 85 and so on... If I actually have a paid off condo thought, it would be significantly less to start out with.
A person 40 years old earning $150K/year with $200K in 401K is not the same as a 40 years old earning $60K/year with $200K in 401K.
Yes it is. You have two 40-year-olds with $200k in retirement accounts, which is exactly the same. The differences between those two people are the investment potential and the desired/required income needs during retirement.
$58k annually is a good amount of $$, you could easily have $100k by your age...don't let people tell you otherwise.
My wife and I have a little over $80k in retirement (although mostly contributed by me) and another $30k in liquid savings. Her average pay since college is $10/hr and mine is $14/hr. That's around $48,000 year for both of us. We're both 28. We also have a house we bought almost 2 years ago.
Thank you for sharing your story; I feel much relief because sometimes I feel everyone is making more money than me!
Yes it is. You have two 40-year-olds with $200k in retirement accounts, which is exactly the same. The differences between those two people are the investment potential and the desired/required income needs during retirement.
The desired/required income needs during retirement for the 2 people is different (most likely more for the $150k/year income person) so while both have $200k in 401k, the one with the lower income is in much better shape.
From looking at this thread its pretty amazing how little people are saving for retirement. I have no plans to retire, yet I have more than some people here!
Thank you for sharing your story; I feel much relief because sometimes I feel everyone is making more money than me!
Feelings change more often.
Quote:
Originally Posted by user_id
From looking at this thread its pretty amazing how little people are saving for retirement. I have no plans to retire, yet I have more than some people here!
The definition or perception of retirement changed for me.
When I was younger, when "retirement" came up, I thought of "not working and just hanging out."
When I got a family, retirement means a rest from the "burden of financial responsibility."
When my kids are growing up (in my perception) right before my very eyes, retirement means able to financially support myself after the kids pursue their adult lives.
And I'm just thinking when my kids have their own family, retirement to me means having the luxury of time to pursue my wants and interests--be it working for a passion regardless of what it pays, or the freedom to do things on my own time schedule (and be physically fit to do).
From looking at this thread its pretty amazing how little people are saving for retirement. I have no plans to retire, yet I have more than some people here!
Imagine what shape the people are in who haven't responded to this thread...
33yrs old about 130K in our retirement savings, the bulk in 401K. No employee match but we always contributed 15% even when we were making hardly anything.
The desired/required income needs during retirement for the 2 people is different (most likely more for the $150k/year income person) so while both have $200k in 401k, the one with the lower income is in much better shape.
You have absolutely no way of knowing that, based on the scenario that you presented. For all we know, the person earning $150k/yr has been plowing a lot of his extra income into paying off his home. Or maybe he's a health care professional who hasn't been out of school all that long and is poised to increase his income substantially as he establishes a private practice.
I could list dozens more scenarios, but the point remains the same. You assume that one person is better off than the other, but there's no way of knowing.
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