Does "wealth" include equity in your primary home? |
In the study cited it does. |
120k salary is 90th percentile. Makes sense they end up with a 90th percentile retirement as someone making 120k and maxing retirement and owning their own house with no mortgage should have about 2M in assets by late 60s.
A lot of inflation. You're thinking in 1990s numbers when it's 2024. |
Not really. I am at about 95th percentile. Don't need to be top 1 percent. |
My pension plan allows designation of a non-spouse survivor who can receive benefits. |
Having $20M and living on $40k/year is probably a bit of mental illness. That is more than normal “frugality.” |
Numbers without context aren’t very useful.
Are people happy having those amounts? |
Yes |
Age is a big factor. $ saved at age 65 and $ saved at age 95 hit differently. Retirees can spend down. |
401k has a huge flaw.
A person making 300k at a company with 6 percent match who does the minimum to get match ends up putting in $36k a year A person making 100k whose company match 50 cents on dollar on 6 percent is only putting in for match is putting in $7,500 a year. People have a tendency to do the match. Plus lower income people can’t afford to ax out 401k And some companies have zero match. My current company has an amazing match bs prior company crappy match. It is amazing how much quicker my 401k is growing |
Our goal which we are on track to make is the 95th percentile.
I’m purposely not comparing myself to the “I can’t retire with a NW of 10M” crowd. I’m running my own race. |
120k is only the 70th percentile for household income. The average household has more than 1 person working. Also people can’t spend most of the home value associated with their house unless they sell it and live in a tent. 2M is not a lot of money anymore especial when 500k-1M is tied up in your home. Here’s a real world example. My grandparents Net worth would be about 1.6M under this methodology and 675k of this is from social security pension, with another 500k from their paid off house. But they only have 400k of assets excluding house and pensions. One of them got a cancer recently and they will be on the hook for the remaining 20% of medical bills not covered by Medicare. If the first line treatment therapy does not work, the only option left are some very expensive gene therapies that cost 400-500k. They will be on the hook for the 80-100k not covered by Medicare. The first line therapy for this cancer has a “cure” rate around 50%. So the total cost of treating this cancer will easily reach 100k+ if they are unlucky and need gene therapy treatment. A single medical incident can easily wipe out 25%+ of their existing liquid assets. They are not that old and it is very likely that one of them will live another 15+ years. |
Top contender for one of the smartest comments on DCUM. Spot on. World is changing. I’d like to retire when we have 10m plus banked. Our net worth is currently 5 plus but it’s not liquid, tied up in stocks and real estate. I’m also not sure hubby is the retirement type, he loves work and “the hunt”. My dad is 85 and living off of his real estate (rented out) and 2m plus portfolio and it feels desperately stressful and low budget. Please save for your retirement folks and if possible, STOP blaming the boomers for everything affecting your sad sack lot in life!!! |
Also, most don't earn 250K+ from 30s onward. They are in lcol areas and make $40-50K. Do that and your lifestyle wont require $200K+/year at retirement either |
Makes sense because many people do "downsize" to a lesser costing home around retirement (despite what the other thread might have you think). |