Anonymous wrote:People mostly seem to think about replacing their income in retirement, lifestyle creep, etc. But I think about the high costs of eldercare. I think in the final years of my life, my expenses may go up dramatically. The money can go so quickly. My net worth is over 5 million and I see no reason to stop throwing money into a retirement account. I don’t want to save the bare minimum, I want overkill and any extra can go to the kids.

Anonymous wrote:Is 10 percent on average even correct? I calculate whether our savings will be enough based on a 5 percent average. Would much rather discover I've got too much money than not enough one day.

Anonymous wrote:We are able to save around 100k a year right now with current incomes and have a net worth of 1.5M. The stock market returns 10% on average, so avged out this 1.5M would grow by 150k on its own which is already more than we contribute every year. If had 5M, it would grow an average of 500k. This is 5x our contribution rate.

At some point doesn’t it kind of feel pointless put more money into your account unless your income keeps scaling with your net worth? TBH if we had 5M which isn’t quite enough to retire I might redirect that 100k of earned income into something else like a sports car or fancy vacations, and just let the 5M compound. At this level your growth is more about market performance and not 9-5 salary.

Obviously I know 10% is just a long term average and it doesn’t mean a steady 10% every year, some years it might be up or down by 20%+. But it’s averaged 10%.

Anonymous wrote:People mostly seem to think about replacing their income in retirement, lifestyle creep, etc. But I think about the high costs of eldercare. I think in the final years of my life, my expenses may go up dramatically. The money can go so quickly. My net worth is over 5 million and I see no reason to stop throwing money into a retirement account. I don’t want to save the bare minimum, I want overkill and any extra can go to the kids.

Anonymous wrote:

Anonymous wrote:It feels pointless when your saving is causing a situation where you're essentially starving yourself for a prolonged period just to gorge many years down the line.

Not to mention, RMD’s.

You could also gift people who are struggling, or worthy causes.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Is 10 percent on average even correct? I calculate whether our savings will be enough based on a 5 percent average. Would much rather discover I've got too much money than not enough one day.

That 10% is actually more like 7 to 8 percent when you factor in inflation. So not unrealistic. I assume your 5% includes inflation.

No, I just run the calculator on investor.gov using our current savings and our ongoing contributions and tell it to assume a 5 percent annual return. I guess I'm underestimating future contributions (because those will go up with inflation and with increases to tax-advantaged savings caps) but also obviously underestimating future costs.

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Anonymous wrote:

Anonymous wrote:Why are people LOLing the 10% average annual return? That’s absolutely been the case for a very very long time.

Because the average doesn't matter when the market crashes 20%. Or you have years of stagnation. Or you have high inflation.

Nobody should plan on 10%.

Really? I started contributing to the max that I could to a 401k in 1988 when I joined Biglaw. I retired early in 2015. My entire portfolio was in the S&P 500 the entire time.

The S&P 500 returned an average of 11.09 percent for the 27 years that I worked, and since retiring ten years ago it's returned on average over 12 percent a year. So, for me at least, we're talking well over 10 percent per year on average for the last 37 years. That's a looong time. If I got a dime for every time I read that I was making a mistake -- and invested in the market -- I'd be even richer.

Anonymous wrote:

Anonymous wrote:Is 10 percent on average even correct? I calculate whether our savings will be enough based on a 5 percent average. Would much rather discover I've got too much money than not enough one day.

That 10% is actually more like 7 to 8 percent when you factor in inflation. So not unrealistic. I assume your 5% includes inflation.

Anonymous wrote:

Anonymous wrote:It feels pointless when your saving is causing a situation where you're essentially starving yourself for a prolonged period just to gorge many years down the line.

This is how I feel. Save save save. I’ve saved! I’m 50 and want to spend. I won’t take money out but we are sit significantly slowing down contributions only for husband to get the match.

I retired (DOGE). Net worth is $4.5M and two financial advisors have said we have enough and kids will still inherit $.

Anonymous wrote:It feels pointless when your saving is causing a situation where you're essentially starving yourself for a prolonged period just to gorge many years down the line.

Anonymous wrote:At about $1.5M in pretax accounts and 20 years to retirement, I've definitely considered shutting down any further extra contributions.

The return to my elderly self doesn't look particularly worthwhile. I base this on what I see all the old people around me actually doing on a day to day basis.

Anonymous wrote:Is 10 percent on average even correct? I calculate whether our savings will be enough based on a 5 percent average. Would much rather discover I've got too much money than not enough one day.

Anonymous wrote:

Anonymous wrote:I'm pretty old, and I've never known a time when the future felt more uncertain. My advice would be, keep saving and diversify for a number of possible outcomes.

Also don't underestimate the cost of maintaining a comfortable old age if/when illness or disability strike.

not that old

2008 was worse

AIG going from AAA to junk bond in a week.
money market funds almost breaking the dollar
stock market going down 50%

or how about 1969 to 1979 when the stock market was flat for a decade?

once we get rid of Trump the response will be overwhelming and we will tax rich people again.