Anonymous wrote:

Anonymous wrote:i am so tired of the age-smearing on dcum. get a clue. all personality types are represented in all generations -- to the extent generations are even a real thing.

also, while i am a big saver by nature, it is not invalid to have a consumption oriented lifestyle. It just means you're going to work later in life than if you abstained. each person should decide how they want their life balanced between work and play. avoiding adventure and enjoyment in youth so you can have hoarded money when you are old is the default, but not the only way to do things.

This could not be further from the truth. The reality is that most people, regardless of age, are not saving little for retirement, many of them because they make too little to save much.

Anonymous wrote:i am so tired of the age-smearing on dcum. get a clue. all personality types are represented in all generations -- to the extent generations are even a real thing.

also, while i am a big saver by nature, it is not invalid to have a consumption oriented lifestyle. It just means you're going to work later in life than if you abstained. each person should decide how they want their life balanced between work and play. avoiding adventure and enjoyment in youth so you can have hoarded money when you are old is the default, but not the only way to do things.

Anonymous wrote:"if you believe that you will be in the same tax bracket at retirement as you are now, there is no tax advantage from investing with pre-tax money instead of post-tax money. If you believe (say) that you will pay 28% of your marginal income dollar in taxes when retired, versus 35% now, then the tax advantage from using pre-tax money to invest is 7%. "

NP. You're a little bit off on this one. Even if you expect to be in the exact same [marginal] "bracket" in your retirement, you still need to compare the fact that your tax-deferred 401(k) savings now are likely avoiding the higher marginal rate now, but when you take a distribution in retirement, it's the lower EFFECTIVE rate that matters. So it might be 35% now and 35% then for your bracket, but it's whatever amount off the TOP now (taxed higher), and later it's spread across the whole ladder, including across the much lower rates. Make sense, or no?

Anonymous wrote:

Anonymous wrote:We are a 2-income couple, age 50, with 2 teens, making ~$225k/year. I max my 401k (with employer match), but DH puts very little in. We both have generous and rock solid* pension plans--DH's will replace about half of his salary--and we are on track to have over $1m in savings by retirement age. That, plus social security (which, yes, I do believe will still be in around, in some form) should be enough to maintain--or even improve on--our current standard of living, given that we currently devote about 40% of take-home to mortgage and college tuition payments, both of which will be paid off by the time we retire.

*By rock-solid, I mean: if our pensions fail, we are all in deep, deep trouble.

I can see what you mean. But in a sense, are you looking at the 401(k) as just a way to fund retirement? I'm hoping to use it as a way to generate some wealth that I won't necessarily spend in retirement (because we also have pensions coming). Anyone else in that same boat?

Anonymous wrote:We are a 2-income couple, age 50, with 2 teens, making ~$225k/year. I max my 401k (with employer match), but DH puts very little in. We both have generous and rock solid* pension plans--DH's will replace about half of his salary--and we are on track to have over $1m in savings by retirement age. That, plus social security (which, yes, I do believe will still be in around, in some form) should be enough to maintain--or even improve on--our current standard of living, given that we currently devote about 40% of take-home to mortgage and college tuition payments, both of which will be paid off by the time we retire.

*By rock-solid, I mean: if our pensions fail, we are all in deep, deep trouble.

Anonymous wrote:We're a young 30s couple that is saving for retirement but not maxing out on a $250k HHI. We're saving the difference in taxable accounts instead. We're hoping to have our second child next year and want to make sure we have accessible money in case things happen (illness, job loss, accidentally conceiving twins, etc). I think tax deferred accounts are great for locking the money up and making sure you save it for retirement, but that means it's hard to get your hands on if you really need it. At this point in our lives, I'm ok with only putting $20k/year in tax deferred accounts between the two of us.

Anonymous wrote:We're a young 30s couple that is saving for retirement but not maxing out on a $250k HHI. We're saving the difference in taxable accounts instead. We're hoping to have our second child next year and want to make sure we have accessible money in case things happen (illness, job loss, accidentally conceiving twins, etc). I think tax deferred accounts are great for locking the money up and making sure you save it for retirement, but that means it's hard to get your hands on if you really need it. At this point in our lives, I'm ok with only putting $20k/year in tax deferred accounts between the two of us.

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Anonymous wrote:*raises hand* we're contributing but not maxing out. We have really sound personal finance habits but very little faith in the future of the economy. Signed, disallusioned millennial.

I am curious where you put your money that you consider safer than a 401k, given your lack of faith in the future of the economy. Gold bullion? What investments do you think are immune to the collapse of the US economy?

None are. That's the point. Stay out of debt, have an emergency fund, live within means, put some away for a rainy day. If there's something you want to buy or do that will enrich your life, so it now. Spend the money. There's no guarantee that you and/or your money will be there later.

You're disillusioned enough to believe that the market (stocks or bonds) won't outperform your checking and savings accounts with their 0.1% interest rates? Or you're disillusioned enough to believe that the theory of compounding won't apply anymore?

I'm cringing just thinking about this -- and I'm an (older) millennial too.

The more I see this, the more I think it's not actually a thought-out financial plan, but rather a post hac rationalization for excessive consumer spending. "I want that new Tesla, but the only way I can afford it, and my new condo, is to severely limit my savings. Well, it's not like the stock market is going to do anything anyway . . . "

THIS. I'm a millennial who is very much into investing (older one - in my 30s), and I feel like I hear this year after year. People always say -- oh I could invest it, but it's not like the market is doing well anyway, so let me just get the Benz or Tesla or vacation or whatever. And sometimes they are right that the market isn't doing well right that moment -- it's had a week or 2 of a slide or lateral movement. Yet they fail to look at it long term. I've heard coworkers say it this year -- that it's been a bad year and it isn't worth investing beyond the bare minimum; and yet the S&P is up 5%+ YTD despite the volatility, so there's a 5% return they missed out on.

Yeah, it would be terrible to invest in the market when it's down. They should wait until it's at the peak, and THEN invest.

*headdesk*

Are you just looking for someone to lecture? I'm the millennial that invests plenty -- maxing out all retirement options + a brokerage account and plenty of buying on all kinds of market shocks. I DO understand that you buy low and sell high. All I'm saying is that I have run across lots of people with confirmation bias -- i.e. I'll buy the car bc what good is investing, look how bad the market is -- while looking at headlines for the last week where the market went down 0.5% -- while ignoring that overall it's up 5% YTD.

So save your lecture for someone who needs it.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:*raises hand* we're contributing but not maxing out. We have really sound personal finance habits but very little faith in the future of the economy. Signed, disallusioned millennial.

I am curious where you put your money that you consider safer than a 401k, given your lack of faith in the future of the economy. Gold bullion? What investments do you think are immune to the collapse of the US economy?

None are. That's the point. Stay out of debt, have an emergency fund, live within means, put some away for a rainy day. If there's something you want to buy or do that will enrich your life, so it now. Spend the money. There's no guarantee that you and/or your money will be there later.

You're disillusioned enough to believe that the market (stocks or bonds) won't outperform your checking and savings accounts with their 0.1% interest rates? Or you're disillusioned enough to believe that the theory of compounding won't apply anymore?

I'm cringing just thinking about this -- and I'm an (older) millennial too.

The more I see this, the more I think it's not actually a thought-out financial plan, but rather a post hac rationalization for excessive consumer spending. "I want that new Tesla, but the only way I can afford it, and my new condo, is to severely limit my savings. Well, it's not like the stock market is going to do anything anyway . . . "

THIS. I'm a millennial who is very much into investing (older one - in my 30s), and I feel like I hear this year after year. People always say -- oh I could invest it, but it's not like the market is doing well anyway, so let me just get the Benz or Tesla or vacation or whatever. And sometimes they are right that the market isn't doing well right that moment -- it's had a week or 2 of a slide or lateral movement. Yet they fail to look at it long term. I've heard coworkers say it this year -- that it's been a bad year and it isn't worth investing beyond the bare minimum; and yet the S&P is up 5%+ YTD despite the volatility, so there's a 5% return they missed out on.

Yeah, it would be terrible to invest in the market when it's down. They should wait until it's at the peak, and THEN invest.

*headdesk*

Are you just looking for someone to lecture? I'm the millennial that invests plenty -- maxing out all retirement options + a brokerage account and plenty of buying on all kinds of market shocks. I DO understand that you buy low and sell high. All I'm saying is that I have run across lots of people with confirmation bias -- i.e. I'll buy the car bc what good is investing, look how bad the market is -- while looking at headlines for the last week where the market went down 0.5% -- while ignoring that overall it's up 5% YTD.

So save your lecture for someone who needs it.