- Feb 17, 2001
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http://www.foxbusiness.com/personal-finance/2012/11/19/why-rising-401k-balances-may-not-be-enough/?intcmp=featuredmedia
I'm actually shocked at how low portfolios are for people's savings. When I was 27 years old, I already had 41k in my 401k. I expected to retire with an adjusted amount (inflation/interest/investment rule of 7/choose your number) amount of $500,000. I would image it'll likely be well over $1 million in 30 some odd years.
You put 10% of your tax free income into your 401k, employer contributions is around 3% or so? Making $50k a year, you're putting in about $5000 a year and with employee contibution another $1500. $6500 a year for say.. 30 years? $50,000 a year age 35 until age 65. That's not accounting for increases in pay, or decreases in pay. That's just average.. that's nearly $200,000 without interest or stock price changes! Let's say over the course of 30 years, it should double at least once.. so you're still looking at say $300,000 (not the 200k doubling but at some point, so I'm taking half of the double). Today, that should easily net someone $500,000 after all adjustments.
Assume by 65 your mortgage is nearly paid off, or is paid off.. your car is paid off or nearly paid off, you're mostly debt free, if not completely. Your expenses should be pretty much nil for debt. Seems pretty simple.
I'm actually shocked at how low portfolios are for people's savings. When I was 27 years old, I already had 41k in my 401k. I expected to retire with an adjusted amount (inflation/interest/investment rule of 7/choose your number) amount of $500,000. I would image it'll likely be well over $1 million in 30 some odd years.
You put 10% of your tax free income into your 401k, employer contributions is around 3% or so? Making $50k a year, you're putting in about $5000 a year and with employee contibution another $1500. $6500 a year for say.. 30 years? $50,000 a year age 35 until age 65. That's not accounting for increases in pay, or decreases in pay. That's just average.. that's nearly $200,000 without interest or stock price changes! Let's say over the course of 30 years, it should double at least once.. so you're still looking at say $300,000 (not the 200k doubling but at some point, so I'm taking half of the double). Today, that should easily net someone $500,000 after all adjustments.
Assume by 65 your mortgage is nearly paid off, or is paid off.. your car is paid off or nearly paid off, you're mostly debt free, if not completely. Your expenses should be pretty much nil for debt. Seems pretty simple.
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