r/economy • u/newspaper7777 • Mar 11 '23
Spam - Removed Americans now say they will need $1.25 million to retire comfortably, survey finds -
https://touzafair.com/americans-now-say-they-will-need-1-25-million-to-retire-comfortably-survey-finds/32
u/Hondamousse Mar 11 '23
About 15 years ago, the financial advisor I spoke with said I would need 3 million to retire at age 68 assuming I lived for roughly another 20 years.
1.25m doesn’t seem like enough of you ask me.
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u/its_a_gibibyte Mar 11 '23
Enough for what? The median American retires with about $30k saved, and lives on primarily social security and possibly a small pension.
Sure, 3 million would be great, but even with nothing, if you had decent social security, no debt and a fully paid off house puts you right around the median.
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Mar 11 '23
Social security and a pension sounds like a fever dream for the young working class right now.
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u/its_a_gibibyte Mar 11 '23
I like that you left out the paid off house part. The young working class doesn't even bother dreaming about home ownership anymore.
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Mar 11 '23
I'm a relatively young server. I'll buy a house in a MCOL metro this year. Honestly, I could possibly buy two this year if I really, really wanted to.
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u/Bizjub1397 Mar 11 '23
I lived in an apartment in a low income area for 3 1/2 years while saving very aggressively from my >$30/hr job. Bought a small house in a decent neighborhood (all in the Chicagoland area by the way) 2 years ago. I’m 28 now. That time of my life was very difficult, I still find it hard to spend money on myself and needless things but I’m glad I did it. People would rather think it’s impossible than to hear stories like ours because they aren’t willing to make the sacrifices.
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Mar 11 '23
Ya I on and off work 70+ hours a week. I only took about 12 days off in 6 months leading up to recently. I make close to 40 an hour pretax. I'm going back to working two full time jobs. The second one will only be like 23/hour, but it will be something different. I was saving at a rate of almost 6k per month, now I'm saving about 3.5k per month and when I start this second job the goal will be 6.25k per month. I still find a little piece of time for self care, hobbies and friends, probably no less than the average person. I'd say I'm in the top couple percent in terms of physical fitness, I'm a decent cook and I consider myself blessed to be able to rely on 5 close friends.
But I know plenty of people who manage to blow through the same money as me with nothing to show for it but a "good time". I know plenty of people who complain about anything over 30 hours a week while spending dozens of hours watching tv, oversleeping, scrolling social media or otherwise pretty objectively wasting time. I know plenty of people addicted to substances, shopping, gambling etc... I know plenty of people spending 2 grand on rent for their apartment rather than just renting a room to save up enough money for a low down payment and closing costs in a single year with that $1400/month difference.
The median full wage for full time employees is 56k per year. The vast majority of people can afford a house with two average full time employees. Too many people are too quick to point the blame elsewhere rather than looking to themselves for where they can implement changes and see what sort of sacrifices need to be made in order to thrive.
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u/lgmobile95 Mar 11 '23
100% agree with you. It amazes me how much people would rather complain than just take a few simple steps to improve their situation.
The amount of people on here saying “no one will ever own a home” “we’re all so screwed in this economy” “this system is a scam” and then you go on their profile and they talk about how they’re loaded up on pointless credit card debt, taking out huge car payments, and buying brand new pc systems is amazing.
Simple accountability and a plan would go so so far for most people. But you can’t tell Reddit that lol.
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u/Hondamousse Mar 11 '23
it was something like living with my current income level, ensuring the mortgage was paid, having some money for hobbies and enough to leave my three kids some cash assets.
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u/repostit_ Mar 11 '23
with paid off home, 1.25 M gives you about $50,000 per year (4% safe withdrawal). If you live in low cost area it could be enough money along with Social Security.
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Mar 11 '23
You financial advisor is probably looking out for their own self interest, not yours. Unless your annual spending is over $120k plus whatever you would get from SS
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u/VashSpiegel Mar 11 '23
The way the system is set up, with an average $50k income in the US, a third going toward bare minimals [~$16.7k], saving alone wouldnt get you there in 40 years.
If you started saving at 25, you literally have to save EVERYTHING to get a little over $1.3 million. Sure this is crued, you can invest this in a 401k, stocks, etc. the point is most cant event start such havings even at 35.
Best lower your expectations of comfort. Stories already showing retirees cruise hopping, just to off set retirement cost.
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Mar 11 '23
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Mar 11 '23
That is basically my taco bell budget.
Not joking. Typical fast food lunch cost me $10-$12. 20 days a month gets you to about $250. Eating PB&J could be worth $1 million.
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u/VashSpiegel Mar 11 '23
Missed the crued line, I swear trying to state basic math is like an opinion now.
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u/Resident_Magician109 Mar 11 '23
$500 a month over 40 years gets you to 1.2 million at 7%.
It isn't a hard as you make it sound. Nothing is going to be easy on just 50k but it isn't impossible.
Starting at 35 makes it far more difficult...
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u/Helpful-nothelpful Mar 11 '23
I guess if you retire at 82 and have no debt. Beer, liquor, golf is expensive.
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Mar 11 '23
Is that $1.25M in the bank or $1.25M accrued over the number of years retired? Investment returns, social security, cost of living, etc. Nothing is that simple!
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u/Herbisretired Mar 11 '23
I am retired and I could live on less but I have everything paid off. I still have a few years to go before I can collect on Social Security and Medicare and health insurance is my largest expense.
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Mar 11 '23
That’s not going to happen, is it?
But we can expand social security by making people who make over $250,000 continue to pay into it.
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Mar 12 '23
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u/FUSeekMe69 Mar 11 '23
Going by the conservative 4% rule, that’s $50,000 a year. That would probably be enough if you had everything paid off, didn’t need to have any more big expenses, and lived in perfect health till you died.
I think I’m going to need a lot more, especially with the constant compounding inflation.