Started 401k at 18 and reached first million 23yrs later. I was always at 15% and my top salary was $67k in retail. Key is start as soon as you can by paying yourself first. I started putting away because my family and I were homeless as a child. Now, I just wish I had learned to earn income in the market as a day trader a lot earlier in life. At least now, my retirement acct will keep growing in the millions on it's own regardless of my next step in the next few months when I quit my job.
@Thawne1338 I'm not sure where you live, but there are tons of job openings. Costco, Fred Meyer, Safeway, most any retail and food establishment. I've not seen so much hiring as I have post Covid. I know many companies need construction, plumbing and skilled labor are in dire need.
40 now, and everything is paid for. Fortunately, I had a college economics teacher who taught me a lesson when I was 18 years old. That lesson was: you can't buy something else for every purchase you make. Having multiple sources of income is prudent, as is living within your means. I have a 13-year-old vehicle because it is all I need, I like it, and I can do whatever I want with it. My net worth is $4 million, and I can pay my bills without stress, but I don't live like I have that. I have no complaints.
@@skylarhillman1455I don't see anything wrong with that. I'm kind of guilty of the same thing too. They have been a responsible person with their income. I'm finally getting there. How are you doing with your finances? I'm just curious.
I'm 98yr old and have $1300 in savings but only 37$ in checking , student loans paid off, gaming PC paid off... Rent is sus, but not bad. Steam sales are what mainly bust my budget.
I always have a huge problem with the X times your annual salary. Say for instance your scraping by with a nice salary of 100K a year. You've saved up 9x by the time your 60. Then you get a huge promotion or change jobs and now your salary is 200K. Instantly now according to the X time matrix your in trouble because you only have 4.5x your salary at Age 60. Are you really in trouble though and that answer is no and not even close UNLESS you changed your spending habits. It "should" be a multiple of not your earnings but your expenses. Same thing goes if you make 100K a year but only have 300K saved. You lose your job and start working at a fast food store making 30K a year. WOW you've saved 10X amount of money you can retire in comfort. Um no... However if you make 100K a year which is about 60K after taxes but your expenses re 30K. You saving 2x your take home pay. Your expenses at the end of the year aren't 80% of the 100K but 80 to 90% of your expenses. That multiplier should be a multiple of your spending habits not your earnings.
This!! So much THIS! I hate the Millionaire Next Door formulas and anyone who talks about income rather than expenses when setting retirement targets. Income != what you need to live - some of us save 30-50%+ of our income each year to say nothing of paying 40+% in income tax!
@@adamp6320 True. Those formulas only reasonably apply when you spend less than you learn and have a handle on your debt. If you make $60K a year, but have debts of $100K (not including mortgage), then all the logic of the savings formulas goes out the window.
Completely agree, but even expenses are misleading. Maybe you have a mortgage at lose a lot on interest, but you only have that mortgage because of your home's value. That's not necessarily any better than someone with a lower home value and no mortgage, whose expenses are significantly lower. Granted this issue can be circumvented by using expected net worth at retirement, assuming no mortgage, and instead using the equivalent expected rent as an expense.
My last day of employment was this past Thursday. No mortgage or a car payment. I have a chunk in savings but I don’t see myself dipping into it because my burn rate is below my streams of income from rentals, 401k, interest from savings and pensions. My only advice is to payoff everything before you retire and carry no obligations.
Best advice: start EARLY. The second you start working set aside some of your wage for retirement and continue the habit no matter what. Increase the percentage you save every time you can (you likely get a raise each year). Even someone with a low working wage can have $1million in retirement with diligence and diversification.
Thanks for sharing. I curiously searched for her full name and her website popped up immediately. I looked through her credentials and did my due diligence before contacting her..
Best part of this video was hearing you talk about taking care of your parents… Andrei, you really are a good guy. I watch a lot of your videos and learned a lot. I’m 34, with 320k in my 401k and 457b accounts (combined), and it’s eye opening to see what the average is for all the ages. I really wish that kids were taught these things in high school, theres nothing worse than seeing people in their 60’s with no retirements or savings
they wont teach you these in hs, because if they do , everyone will make great financial decisions and defeat the purpose for those wealthy folks having value in saving. Someone needs to be the mouse and be a sacrifice to the society spending crazy in order for someone to be great saving for later The world wouldnt run if ppl just saved, saved, and saved. Why do you think diamonds are rare, because not many have them. If everyone in the entire world did, it wouldnt be as rare . Scarcity leads to high demand , think like that .
Yes, not many of us have parents that can support themselves after retirement. Learning how to save enough for us while supporting parents will need to be the first step towards making sure we're able teach these to our kids in the future, so the cycle doesn't repeat.
I get it. One day, not too far away, we may not be able to keep working and we have to retire. That said, a ton of people also die never being able to use their hard earned cash. Rather than focusing on building wealth for the future, people should focus on living within their means and finding ways to enjoy life in the present. You will never save enough money to feel like you have enough money unless you live within your means.
I have steady income. Military retirement and VA disability. Also work as a Correctional Officer making 140k. I do contribute to a 457b and do max it out every year (currently at $155k with this down market) so I feel very blessed to have these multiple streams
Can you do a video explaining how you live off your 401k in retirement? Dividends, selling shares ect. Id love to hear your explanation. Great content! Liked and followed.
401K is just an account. So activity doesn't stop when you hit retirement. It continues growing, earning dividends, etc. To live off it, you can collect dividends (instead of reinvesting) and/or just sell shares. Obviously you don't want to just 100% cash out because it will continue to grow for the next 30-40 years of retirement if you leave it invested
Worth noting that according to Investopedia, Roth 401k contributions from employee are post-tax dollars but the matched dollars are pre-tax dollars and are put in a traditional 401k.
@@LRF49worth noting is asset protection. You run into someone... get sued... they will take from your IRAs. But the 401k is untouchable. Plus you can withdraw from 401k at 59.5 and before that age through SoSEPP. And you can contribute more that the Roth IRA limit if you have a Roth 401k. I have my money in Fidelity Brokerage link. Can buy pretty much anything.
My advice would be to invest into a 401k up to your match and then open up a Roth IRA and put the rest in that. You’ll have way more options when it comes to investments.
Looking at the savings by age chart I can see I missed the mark. I'm 67 and my 401k is $572,000, much lower that what the chart shows for my age. The mistake I made was placing too much of my money into a stable value fund (very safe, but low gain) and not enough into stock funds. The thing I did right was always contributing to my 401k, and at times that was a pretty good dollar amount. My employer did not match my 401k contributions, but I get a $4,000/month pension, which will help in retirement. If I could do it over again I'd take more risk with my 401k and invest in a larger percentage of stock mutual funds.
It’s not that you need to put that much away at your age, it’s more putting something away at your age puts you so far ahead. Find the comfortable middle ground and you’ll be that much more ahead. Something is better than nothing
@@bpmatty5123the bare minimum of housing, food, and transportation exceeds earnings for a lot of Americans. This worsens for those with health issues, single parents, etc. It's easy to wreck your trajectory early on and be stuck in a really rough situation for a very long time.
Wow, i'm 50 and only have 42k in my roth ira. Maybe if i quit eating, live in my car and work 12hr shifts for the next 20 years with 1 day off a week i'll be able to retire when i'm 70. What a joke😂
If you can sacrifice to get a solid 10 years of investing it will make a wold of difference. If you own your own home and can rent it then there are even more options depending on how flexible you are. For example, the rent you get for your house could potentially cover all of your expenses in a cheaper country. Do that for a few years, let your investments grow, plus defer social security, and you could have a considerable amount of money for the rest of your retirement. If you have money in other accounts then you should be good.
What’s to say they won’t tax the Roth as well in the future? Democracy/ mob rule can take from you as they please. They will just change the laws when you retire.
Between my employer and myself I've been putting 28% of my salary into my 403b and . . . since December 31, 2021, my account has not increased at all. At all. Sixteen months of pouring money into a hole and getting nothing in return. And they say the real recession isn't even going to start until later in 2023. Grim. And American "health care" is one big scam, and a disgrace.
Thank you. Now I don't feel so bad about the 28k in my 401k, but I really do need to kick it in to gear. I've been stressed and feeling behind because I didn't start my first real job till I was 27 years old (I've had an odd life path) ... so I've only been contributing for 10 years. 🍀Great video - it makes it all seem much less - dire, lol. Also nice magic tricks.
Don’t worry. I started at 36 and still able to save a good amount. But I am maxing my 401k now for the past few years as much as I can to save on taxes. 😅
I’ve been diligently working, saving and contributing towards early retirement and financial freedom, but since covid outbreak, the economy so far has caused my portfolio to underperform, do I keep contributing to my 401k or look at alternative sectors to meet my goals?
Exactly, getting proper financial advise is invaluable, my portfolio is well-matched for every season of the market and recently hit 140% rise from early last year. I and my CFP are working on a 7 figure ballpark goal, tho this could take another year.
Personally, I delegate my excesses to someone of great expertise ''Katherine Nance Dietz'' preferably you can look up the name on the internet, her qualifications speak for itself.
Can't divulge much, I delegate my excesses to someone of great expertise ''Katherine Nance Dietz'' preferably you can look her up on the web, her qualifications speak for itself.
I hate the “if you started saving at age 20” … very few can max at that age … Most would have a low income job and or are studying … Few would have high income at that stage
Loved the humor and the card tricks in this video!! 😂 Because I do watch your videos for the magic because it is better than realizing I am really behind on saving for my retirement!!
Man, based on the numbers in this video, I am doing very well with my 401k...and I'm still terrified that I won't have nearly enough when I retire at 82.
Tax laws can be so complex, and it’s super helpful to break them down like this. Understanding how different policies can impact our finances is crucial for making informed decisions.
I'm 48, sad to say I made terrible money decisions growing up which I'm presently paying for, been dedicating every waking hours towards my retirement and I'd really love to retire to Portugal with atleast $3million by, the market up and down is not helping at all.
The main benefit of the Roth IRA/401k is that the earnings (interest) on your account will not be taxable. Much more valuable to pay taxes on your contributions each year and let your account grow tax free. When you retire, over 90% of your account will be interest compounded over the years and not paying tax on that interest is priceless. GO ROTH IF YOU ARE YOUNG.
It would be interesting to see a survey on how the prospect of an inheritance influences the lack of personal savings and planning for retirement. With people living longer, and poor estate planning, most people don’t understand how much nursing homes will charge (steal) from our loved ones. With the so called housing crisis, this might be the last generation (boomers) that pays off a home and leaves it to their children (or Black Rock).
True. I expect to inherit quite a bit. I may need to retire early to help care for my parents though to keep them out of nursing homes. I'm focusing on investing as much as reasonably possible for the next 10 years (to age 60), so I can afford to retire when my retirement accounts are accessible. Currently have 7 x my salary invested.
In the scenario where you make $75k a year, if you had that 3x by 40 and assuming the rule of 72 you’ll be at 3.6 million by 67. Contribution rate and time in the market will always be the biggest factors for growing wealth.
I was lucky enough to start contributing at pretty much the bottom of the market (in recent memory anyway) in 08 so my returns have been pretty great. That COVID hit has been pretty sobering though. I would also recommend the zero fee Fidelity index funds for a side investment account.
Sound advice, Andrei. Big fan of your content. With respect to the snippet you had of Tom Hegna at the top… I often say that if people truly understood that much-maligned product, which shall remain nameless here… that they would line up around the block to purchase it. First get your company match, then max your Roth, and then contribute to that other product. Otherwise you’re making a bet that the tax code won’t go up in the future when we’re at historical lows today with massive debt and budgeting issues. Not a wager I want to bet my retirement quality of life on.
I love watching these videos. But I wish I could find other channels that focus on Europeans (more specifically Norway) and how we should invest for retirement. Since we don’t have 401k
I knew the information in this video, but I'm incredibly happy you put this together. It's very easy to understand what you're explaining. It breaks the content into small digestible chunks for the average American.
4:56 - I would amend this part slightly. Not every company does a 1:1 match. My current company matches only 50% of my contributions, so it's only a 50% "guaranteed" return on my initial investment. I have also heard that some companies match higher than 1:1, but I've never personally experienced that.
A lot of fun under the big tent, but not a lot of money in it. I think that was my biggest fear/motivation for grinding and saving. Not to become a burden on my kids. Good luck to you and your parents.
I am a first gen immigrant so I felt when you said your parents are your 'dependents'. I am 30 now, I just graduated and starting maxing out my 403b, 457 so I feel like I am late in the game but I guess better late than never.
I love this video. I’m obsessed with cards and I have a degree in economics, so money and card tricks are two of my favorite things! It’s a good thing I’ve committed to never gambling!
@@chris-1977 unfortunately, small gambling turns into big gambling. Same thing with drug use and theft. I also don’t do those things, even if a little would be okay. Why tempt myself?
“Buy cash value life insurance.” A life insurance salesman would say. A 401K, fully taken advantage of, is cash value life insurance, without the insurance salesman sales commission.
Solid data, like button smashed!! Interesting subject to cover, I now need to go into the weekend and find the Canada data equivalent for if I don’t. DAS not good 😂
Many people do 401(k) and a Roth conversions because they realize you actually end up with more money in the end. No forced disbursements. Many retirees regret having a 401(k) and wish they would’ve used a Roth
My base pay is 101k and I max out my 401, I maxed out 10 years ago when I made 80k, it's doable, I bought my house in 2010 too. Obviously everyones finances are different, but it's possible. You just have to commit.
Just turned 37 with $170k so you're doing awesome. I feel like I'm never going to make it to the 1 million plus that they say we're going to need, and I have no idea how we're supposed to invest 15% or Max it out. I really hope retirement is achievable because I really don't want to work until I kick it
Need access to money for investing in brokerage and real estate if you don't own property Too heavy in accts that you can't use until 59 With limit investment options In brokerage you can double a position in one day Just gotta learn the market Or get a long term gain by building your own stock portfolio Don't put any more money in retirement funds. Fund emergency fund brokerage Loan from retire fund to buy real estate
Hey man, you earned a subscriber. I am glad you are focused on helping your parents out, something that is rare nowadays. I hope your youtube career skyrockets even more.
Thanks man, fire info as always! You’re not alone in the “I’m my parents retirement plan” boat. I think there’s a lot more people having to take care of their parents financially in the US than many realize.
Really enjoyed this video. I'm considering your advice, because thousands of dollars have been disappearing from my 401k due to soaring inflation, and my concern is where to safeguard and grow remaining cash about $500k+ for the next 2-3 years at no risk. I'd love to retire early and afford a life after retirement.
One important item to add regarding Roth 401k: When you take distributions, you will still have to pay income taxes on the EMPLOYER MATCH and any growth associated with that match. Even though you take out taxes when contributing to a Roth 401k, the employer match tax is not being taken out, and is still subject to traditional 401k rules that you can't escape from.
This is the first video I’ve ever seen that actually quantifies goes like you did. Really helps break it down to a reality check. First time seeing a video of yours but will definitely check more out Let alone addressing the issue of parents lack of retirement planning as I’m in a similar situation in that regard
A blend is best. If Roth conversations are around, them 401k is slightly better. If Roth conversations go away, Roth IRA is probably better. But the best is a blend. It's possible to withdraw an unlimited amount and not change tax brackets when using a Roth in retirement, so $0 in taxes. But by using a 401k and remaining in the 0-10% tax bracket you can use the Roth to not go over yet withdraw $80,000 per year and that not pulling much from the Roth. Plus, stay in a low enough tax bracket and dividends aren't taxed. The Roth can keep you there. It can easily keep you in the 15% tax bracket, if taxes don't change much before retirement. So, 401k better for singles, usually but a Roth is still helpful. Roth better if married and for inheritance.
Unfortunately, a lot of that information doesn't apply to many of us. I don't think the majority of people will have a home that is paid for by the time they retire. A lot of people can't even afford to buy a home period so many of us will be lifetime renters.
My problem with the standard priority list is the ranking of your mortgage. If you have an interest rate of 4+%, that should bump up the list due to the risk of losing a job
the thought process is you will never be able to get debt at that low of a rate. So that money would be better spent in an investment. mental health is more important and that is why many prioritize paying off their home as quick as possible.
Been down the job loss road. So now we just want to pay off the house and reduce our expenses. The lower expenses allow for more flexibility. The lower the income needed, the more job options you have. Any amount of money goes further. Alternatively we could invest in a taxable brokerage account. This way we can pull out the money quickly.
Very good video. Lots of excellent information and still entertaining. Illustrating the difference between the average amount saved and the median isn't easy to do, but your explanation was spot on. It should also be truly eye-opening. There were two things you got wrong. The first one is, you pay off all debt except your mortgage before investing beyond the employer match for your 401k. The second thing you got wrong, and I mean REALLY wrong, is choosing between traditional or Roth, for any investments after what your employer will match. The question of whether or not you will spend more or less in retirement is often regurgitated by the well-meaning, so you're forgiven. The reality is, almost everyone spends less during retirement than they did during their working years, which would suggest you should stick to traditional 401k, but that's horrible advice! The better question is, do you want to pay taxes on the money you put into investments throughout your lifetime, or do you want to pay taxes on the interest earned on those investments, PLUS the money you invested, during retirement? The answer is very clear, or should be, for anyone with basic math skills. The Roth 401k is the better option, for anyone who can sustain the tax hit while working. Also, all of those "X" times by a certain age range is complete garbage, due to the rule of 72. If you earn 7.2% on your investments, they will double every 10 years. So, if you have 6X your salary by age 50 (and your salary doesn't increase exponentially!) you'll have 12X your salary by age 60, with just a modest 7.2% return. Those numbers are completely unrealistic and ignore the parabolic growth that virtually all investment accounts demonstrate in the last 3-5 years before retirement. Complete nonsense and you should know better! ;)
Very interesting topic you have discussed. I am retired. I had simple IRA but it was good investment. I invested more in real estate so I am ahead of game. I will pass this information to others.
It's recommended to save at least 15% of your income in a 401k. You can use online calculators to estimate how much you should save based on your age and income. Saving at least 15% of your income in a 401(k) can help ensure that you have enough money to retire comfortably. By saving this much, you can take advantage of compound interest and potentially grow your retirement savings over time.
Hey Andrei, keep putting up great content. Those card tricks were subtly impeccable. Quick question - how do you create those animations in your video?
It’s criminal that these basic financial lessons aren’t taught in school. I only had teachers stressing that we should all contribute to our 401ks when I started college, and even that probably wasn’t a typical experience for most since I majored in accounting.
I contribute to a Roth 401k, not because of the taxes will be higher or lower now, but because the way I see it, putting money in a Roth 401k is actually contributing more money. If you have 1 million in the account, it comes out tax free you keep it all. If you have 1million in the account on a traditional, and you get taxed at 20%, then it's like only having 800k in the account. So by contributing to Roth, I just see it as contributing more money, rather than play the tax number game.
When i started to get into finance and investing, i did not understand much. After understanding the topic more, i think it is funny that now i would understand a 401k, which lots of US citizens don't understand. But... im not located in the US, so i would never be able to use it. 😅
How many magic tricks did you spot? There's a few!
69
I saw the one where all my money disappears every month due to high rent and inflation!
@@seanmcmagic Got me with that one
I would like to know how you a Faro Shuffle with only one hand
@@seanmcmagic rimshot
Started 401k at 18 and reached first million 23yrs later. I was always at 15% and my top salary was $67k in retail. Key is start as soon as you can by paying yourself first. I started putting away because my family and I were homeless as a child. Now, I just wish I had learned to earn income in the market as a day trader a lot earlier in life. At least now, my retirement acct will keep growing in the millions on it's own regardless of my next step in the next few months when I quit my job.
@Thawne1338 I'm not sure where you live, but there are tons of job openings. Costco, Fred Meyer, Safeway, most any retail and food establishment. I've not seen so much hiring as I have post Covid. I know many companies need construction, plumbing and skilled labor are in dire need.
@Thawne1338 if u don’t have a job it’s cause u don’t want one.
@@seanchristman9548that’s an absolute lie.
How much were you dumping in it annually? Do you do roth also
What was your balance at age 21 do you remember?
40 now, and everything is paid for. Fortunately, I had a college economics teacher who taught me a lesson when I was 18 years old. That lesson was: you can't buy something else for every purchase you make. Having multiple sources of income is prudent, as is living within your means. I have a 13-year-old vehicle because it is all I need, I like it, and I can do whatever I want with it. My net worth is $4 million, and I can pay my bills without stress, but I don't live like I have that. I have no complaints.
Well done, sir.
You post this same comment everywhere don’t you?
@@skylarhillman1455I don't see anything wrong with that. I'm kind of guilty of the same thing too. They have been a responsible person with their income. I'm finally getting there. How are you doing with your finances? I'm just curious.
40 what?
I'm 98yr old and have $1300 in savings but only 37$ in checking , student loans paid off, gaming PC paid off... Rent is sus, but not bad. Steam sales are what mainly bust my budget.
I always have a huge problem with the X times your annual salary. Say for instance your scraping by with a nice salary of 100K a year. You've saved up 9x by the time your 60. Then you get a huge promotion or change jobs and now your salary is 200K. Instantly now according to the X time matrix your in trouble because you only have 4.5x your salary at Age 60. Are you really in trouble though and that answer is no and not even close UNLESS you changed your spending habits. It "should" be a multiple of not your earnings but your expenses. Same thing goes if you make 100K a year but only have 300K saved. You lose your job and start working at a fast food store making 30K a year. WOW you've saved 10X amount of money you can retire in comfort. Um no...
However if you make 100K a year which is about 60K after taxes but your expenses re 30K. You saving 2x your take home pay. Your expenses at the end of the year aren't 80% of the 100K but 80 to 90% of your expenses. That multiplier should be a multiple of your spending habits not your earnings.
Let's face it, most people don't even do that much
This!! So much THIS! I hate the Millionaire Next Door formulas and anyone who talks about income rather than expenses when setting retirement targets. Income != what you need to live - some of us save 30-50%+ of our income each year to say nothing of paying 40+% in income tax!
@@adamp6320 True. Those formulas only reasonably apply when you spend less than you learn and have a handle on your debt. If you make $60K a year, but have debts of $100K (not including mortgage), then all the logic of the savings formulas goes out the window.
Scraping by on $100k😂
Completely agree, but even expenses are misleading. Maybe you have a mortgage at lose a lot on interest, but you only have that mortgage because of your home's value. That's not necessarily any better than someone with a lower home value and no mortgage, whose expenses are significantly lower.
Granted this issue can be circumvented by using expected net worth at retirement, assuming no mortgage, and instead using the equivalent expected rent as an expense.
I like that this channel is going back to its root of focusing on investing for regular people
Regular people have 401(k)s? Delusional
I also learned a lot of knowledge on this channel, about investment,
@@y-strap yes if you work a normal job (9-5) they do
@@y-strapa 401k is the most basic benefit any company will offer.
@@y-straplike nearly every big employer in the us offers it
My last day of employment was this past Thursday. No mortgage or a car payment. I have a chunk in savings but I don’t see myself dipping into it because my burn rate is below my streams of income from rentals, 401k, interest from savings and pensions. My only advice is to payoff everything before you retire and carry no obligations.
Yes paying off as much as you can is so beneficial. My car is paid off and I owe less than $15k on my house and always pay off my credit cards.
You have it all sitting in cash?? Just losing money to inflation that way. Savings accounts interest are super low.
@@jonathandeuire6962Not all. See my comment to the op.
Best advice: start EARLY. The second you start working set aside some of your wage for retirement and continue the habit no matter what. Increase the percentage you save every time you can (you likely get a raise each year). Even someone with a low working wage can have $1million in retirement with diligence and diversification.
Just as seeds need time to grow into trees, investments need time to grow into wealth.
Patience is key in investing, just as it is in gardening. Watch your wealth grow over time!
Indeed Patience is key, With my adviser’s insights, I’ve learned to wait for the right opportunities, which has boosted my returns.
Mind if I ask you to recommend this particular coach you using their service? Seems you've figured it all out.
Nicole Anastasia Plumlee can't divulge much. Most likely, the internet should have her basic info, you can research if you like..
Thanks for sharing. I curiously searched for her full name and her website popped up immediately. I looked through her credentials and did my due diligence before contacting her..
Glad you are supporting your parents. I love people that don't forget to give back to their parents that worked hard to raise you
it's cultural to people in non-western and industrialized countries.
Best part of this video was hearing you talk about taking care of your parents… Andrei, you really are a good guy. I watch a lot of your videos and learned a lot. I’m 34, with 320k in my 401k and 457b accounts (combined), and it’s eye opening to see what the average is for all the ages. I really wish that kids were taught these things in high school, theres nothing worse than seeing people in their 60’s with no retirements or savings
thank you, I totally agree!
they wont teach you these in hs, because if they do , everyone will make great financial decisions and defeat the purpose for those wealthy folks having value in saving. Someone needs to be the mouse and be a sacrifice to the society spending crazy in order for someone to be great saving for later The world wouldnt run if ppl just saved, saved, and saved. Why do you think diamonds are rare, because not many have them. If everyone in the entire world did, it wouldnt be as rare . Scarcity leads to high demand , think like that .
Taking care of your parents or old people is common in most countries except the US. The US dumps old people into senior homes.
Yes, not many of us have parents that can support themselves after retirement. Learning how to save enough for us while supporting parents will need to be the first step towards making sure we're able teach these to our kids in the future, so the cycle doesn't repeat.
Sounds like you're good at planning for the future, happy for you to hit an amazing 320k at this age
"We can all be sad together" 😂really enjoyed your straightforward explanation and the humor!
"I already have dependents even though I've got no kids" I related to this line on a whole nother level!
I’m in my 70’s and watch your channel regularly - love it!
You're in your 70s??!! You look much younger.
I get it. One day, not too far away, we may not be able to keep working and we have to retire. That said, a ton of people also die never being able to use their hard earned cash. Rather than focusing on building wealth for the future, people should focus on living within their means and finding ways to enjoy life in the present. You will never save enough money to feel like you have enough money unless you live within your means.
Pure wisdom
I have steady income. Military retirement and VA disability. Also work as a Correctional Officer making 140k. I do contribute to a 457b and do max it out every year (currently at $155k with this down market) so I feel very blessed to have these multiple streams
Since when do correctional officers get paid so much??
@@dirtydinner6463 investigating the right jobs and negotiating pay regularly . many trades pay more than advertised .
@@dirtydinner6463 The profession is short staffed nationwide. Many are doing tons of overtime at time and a half.
@@savvy727 Hell I would take that over my salaried job where I’m expected to work overtime with no extra pay
I thank you for all your service to our country. You deserve it.
3:36 I see you with the final fantasy music sneakily in a 401k video, you absolute hero
Can you do a video explaining how you live off your 401k in retirement? Dividends, selling shares ect. Id love to hear your explanation. Great content! Liked and followed.
Please do this
I would love this!
He's not 59.5 years old, so he wouldn't be pulling from his 401k.
For general info, just Google "401k withdrawal strategy"
401K is just an account. So activity doesn't stop when you hit retirement. It continues growing, earning dividends, etc.
To live off it, you can collect dividends (instead of reinvesting) and/or just sell shares. Obviously you don't want to just 100% cash out because it will continue to grow for the next 30-40 years of retirement if you leave it invested
Specific problems are solved concretely
Worth noting that according to Investopedia, Roth 401k contributions from employee are post-tax dollars but the matched dollars are pre-tax dollars and are put in a traditional 401k.
Which is why you don't do 401k Roth. You get a Roth IRA instead.
You can’t contribute to Roth IRA anymore when you reach the income limit.
@@LRF49worth noting is asset protection. You run into someone... get sued... they will take from your IRAs. But the 401k is untouchable. Plus you can withdraw from 401k at 59.5 and before that age through SoSEPP. And you can contribute more that the Roth IRA limit if you have a Roth 401k. I have my money in Fidelity Brokerage link. Can buy pretty much anything.
My advice would be to invest into a 401k up to your match and then open up a Roth IRA and put the rest in that. You’ll have way more options when it comes to investments.
But remember you can be limited on Roth IRA contributions depending on your income.
And save in a HYSA.
Yep or at certain point, you’re at your peak salary and want to reduce tax liability. During highest paying part of career, you should defer tax.
Yes, this is what a backdoor transfer is used for. Max out your Roth, then Roth 401k if offered@@Dussander2
Also when life happens and you get sued... they can tap into your IRAs. But not you 401k.
Looking at the savings by age chart I can see I missed the mark. I'm 67 and my 401k is $572,000, much lower that what the chart shows for my age. The mistake I made was placing too much of my money into a stable value fund (very safe, but low gain) and not enough into stock funds. The thing I did right was always contributing to my 401k, and at times that was a pretty good dollar amount. My employer did not match my 401k contributions, but I get a $4,000/month pension, which will help in retirement. If I could do it over again I'd take more risk with my 401k and invest in a larger percentage of stock mutual funds.
A 23 year old putting away $22,500 every year until 45 is just impossible today. Many can barely afford rent nor an emergency fund.
100% True 😢😮
It was impossible 30 years ago as well
Live below your means
It’s not that you need to put that much away at your age, it’s more putting something away at your age puts you so far ahead. Find the comfortable middle ground and you’ll be that much more ahead. Something is better than nothing
@@bpmatty5123the bare minimum of housing, food, and transportation exceeds earnings for a lot of Americans. This worsens for those with health issues, single parents, etc. It's easy to wreck your trajectory early on and be stuck in a really rough situation for a very long time.
Wow, i'm 50 and only have 42k in my roth ira. Maybe if i quit eating, live in my car and work 12hr shifts for the next 20 years with 1 day off a week i'll be able to retire when i'm 70. What a joke😂
If you can sacrifice to get a solid 10 years of investing it will make a wold of difference. If you own your own home and can rent it then there are even more options depending on how flexible you are. For example, the rent you get for your house could potentially cover all of your expenses in a cheaper country. Do that for a few years, let your investments grow, plus defer social security, and you could have a considerable amount of money for the rest of your retirement.
If you have money in other accounts then you should be good.
You had a long time to chase the bag.
Wish you had started earlier brother I hope you can retire comfortably in the future
We choose Roth over 401k because taxes will be higher in the future, not because we plan on making more during retirement.
Why not have every account possible so you have more options in retirement and can draw on what works best then?
My best guess is that you wouldn't be maximizing the benefits of a particular strategy so it's best to plan ahead so you can maximize your money
What’s to say they won’t tax the Roth as well in the future? Democracy/ mob rule can take from you as they please. They will just change the laws when you retire.
The problem with ROTH is that you can only invest 6500 each year which is not enough. Why not have both roth and 401k?
@@suttsd you can have both
That’s why I never go to the doctor because they’ll find something wrong with you
LOL, same
Sad..but true 😂😢😮😅😊
Between my employer and myself I've been putting 28% of my salary into my 403b and . . . since December 31, 2021, my account has not increased at all. At all. Sixteen months of pouring money into a hole and getting nothing in return. And they say the real recession isn't even going to start until later in 2023. Grim. And American "health care" is one big scam, and a disgrace.
I’m very behind y’all. At this rate I’ll work till I’m dead
Thank you. Now I don't feel so bad about the 28k in my 401k, but I really do need to kick it in to gear. I've been stressed and feeling behind because I didn't start my first real job till I was 27 years old (I've had an odd life path) ... so I've only been contributing for 10 years. 🍀Great video - it makes it all seem much less - dire, lol. Also nice magic tricks.
Don’t worry. I started at 36 and still able to save a good amount. But I am maxing my 401k now for the past few years as much as I can to save on taxes. 😅
I’ve been diligently working, saving and contributing towards early retirement and financial freedom, but since covid outbreak, the economy so far has caused my portfolio to underperform, do I keep contributing to my 401k or look at alternative sectors to meet my goals?
keep contributing to your 401K, remember you are in for the long haul, but I'd suggest you consider financial advisory
Exactly, getting proper financial advise is invaluable, my portfolio is well-matched for every season of the market and recently hit 140% rise from early last year. I and my CFP are working on a 7 figure ballpark goal, tho this could take another year.
this is awesome! can you please leave the info of your advsor here? i’m in dire need of financial advisory
Personally, I delegate my excesses to someone of great expertise ''Katherine Nance Dietz'' preferably you can look up the name on the internet, her qualifications speak for itself.
Can't divulge much, I delegate my excesses to someone of great expertise ''Katherine Nance Dietz'' preferably you can look her up on the web, her qualifications speak for itself.
My problem with the 401(k) is that I don’t want to wait until I’m 65 or whatever to retire.
I hate the “if you started saving at age 20” … very few can max at that age …
Most would have a low income job and or are studying …
Few would have high income at that stage
Loved the humor and the card tricks in this video!! 😂
Because I do watch your videos for the magic because it is better than realizing I am really behind on saving for my retirement!!
Learning about finance doesn't have to be boring, thanks Andrei for the entertaining video!
thank you!
@Andrei Jikh I agree. Can references be provided?
It was never boring, its just gen adhd can't pay attention to anything that doesn't have a lootbox.
Awesome! I am currently maxing out my 401k. And being 50 I get an additional amount… 30K in 2023!!
Same! 🙌🏻
Yea good you will buy a donut at old age
@@MikhailFromUSA Au contraire, mon frère.
Your words are golden.. just hope people listen. Invest early.. don't stop investing. Invest in low expense ratio index funds.
Man, based on the numbers in this video, I am doing very well with my 401k...and I'm still terrified that I won't have nearly enough when I retire at 82.
lol this is how I feel.
Most people put 13.8% of their salary into 401k? Well guess who just increased their contribution from 10% to 14%? Checkmate, Andrei.
😊😊😊
This has got to be the best video from Andrei yet. Very entertaining and educational. Killer
Tax laws can be so complex, and it’s super helpful to break them down like this. Understanding how different policies can impact our finances is crucial for making informed decisions.
I'm 48, sad to say I made terrible money decisions growing up which I'm presently paying for, been dedicating every waking hours towards my retirement and I'd really love to retire to Portugal with atleast $3million by, the market up and down is not helping at all.
The main benefit of the Roth IRA/401k is that the earnings (interest) on your account will not be taxable. Much more valuable to pay taxes on your contributions each year and let your account grow tax free. When you retire, over 90% of your account will be interest compounded over the years and not paying tax on that interest is priceless. GO ROTH IF YOU ARE YOUNG.
And if you star at 40 go traditional or Roth
It would be interesting to see a survey on how the prospect of an inheritance influences the lack of personal savings and planning for retirement. With people living longer, and poor estate planning, most people don’t understand how much nursing homes will charge (steal) from our loved ones. With the so called housing crisis, this might be the last generation (boomers) that pays off a home and leaves it to their children (or Black Rock).
Well stated. I agree.
True. I expect to inherit quite a bit. I may need to retire early to help care for my parents though to keep them out of nursing homes. I'm focusing on investing as much as reasonably possible for the next 10 years (to age 60), so I can afford to retire when my retirement accounts are accessible.
Currently have 7 x my salary invested.
Bro my dad has pretty much everything paid off and has multiple millions, gets two pensions and I doubt I get a dime for being a good son
The trick they dont want you to know. Have more money! 🤯 I just found this channel and was cracking up. Great video and great info.
In the scenario where you make $75k a year, if you had that 3x by 40 and assuming the rule of 72 you’ll be at 3.6 million by 67. Contribution rate and time in the market will always be the biggest factors for growing wealth.
youll spend vast majority of that in medical bills so
@@mysterio5837 how?
@@mysterio5837 such a dumb comment
"Sad spelled backwards is das. And das not good" lol kudos to you for making finances entertaining.
I was lucky enough to start contributing at pretty much the bottom of the market (in recent memory anyway) in 08 so my returns have been pretty great. That COVID hit has been pretty sobering though. I would also recommend the zero fee Fidelity index funds for a side investment account.
Nice recommendation
Sound advice, Andrei. Big fan of your content.
With respect to the snippet you had of Tom Hegna at the top… I often say that if people truly understood that much-maligned product, which shall remain nameless here… that they would line up around the block to purchase it.
First get your company match, then max your Roth, and then contribute to that other product. Otherwise you’re making a bet that the tax code won’t go up in the future when we’re at historical lows today with massive debt and budgeting issues. Not a wager I want to bet my retirement quality of life on.
The sad reality is that far too youngsters have their minds occupied with distractions and very few are preparing for their futures.
I love watching these videos. But I wish I could find other channels that focus on Europeans (more specifically Norway) and how we should invest for retirement. Since we don’t have 401k
I knew the information in this video, but I'm incredibly happy you put this together. It's very easy to understand what you're explaining. It breaks the content into small digestible chunks for the average American.
4:56 - I would amend this part slightly. Not every company does a 1:1 match. My current company matches only 50% of my contributions, so it's only a 50% "guaranteed" return on my initial investment. I have also heard that some companies match higher than 1:1, but I've never personally experienced that.
Answer is the same, contribute to get the match.
Or sometimes it'll be scaled, like 100% up to x then 50% up to y
My husband's company only does a 40% match, but it saved us from losing money in the 401k last year.
I don't even get a match and I work for BNSF 🤣
A lot of fun under the big tent, but not a lot of money in it. I think that was my biggest fear/motivation for grinding and saving. Not to become a burden on my kids. Good luck to you and your parents.
sad backwards is DAS and DAS NOT GOOD LMAOO 😂😂 nothing like learning to become financially prepared and laughter. Thank you Andrei!!
Buddy at work doesn’t invest in 401k even tho we got a 10% match. Still trying to convince him😅
10%? That’s horrible but yeah he should start
@MarcialChan I'm guessing he means a 100% match up to 10% which would be an amazing contribution.
The richest statement was “you’ll also have your house paid off” 😂. Good video!
Man that was depressing..... I need a drink now.....
This guy is a very big fan of the donkey Kong country soundtrack lol. Man had different versions of aquatic ambience playing throughout the vid
good spot
I am a first gen immigrant so I felt when you said your parents are your 'dependents'. I am 30 now, I just graduated and starting maxing out my 403b, 457 so I feel like I am late in the game but I guess better late than never.
Lol the cash value life insurance switch up feels like the old “friend” reaching out and finding out it’s for a pyramid scheme 😂
I love this video. I’m obsessed with cards and I have a degree in economics, so money and card tricks are two of my favorite things! It’s a good thing I’ve committed to never gambling!
Small gambling is good for the soul, big gambling is bad for the body
@@chris-1977 unfortunately, small gambling turns into big gambling. Same thing with drug use and theft. I also don’t do those things, even if a little would be okay. Why tempt myself?
“Buy cash value life insurance.” A life insurance salesman would say. A 401K, fully taken advantage of, is cash value life insurance, without the insurance salesman sales commission.
Solid data, like button smashed!! Interesting subject to cover, I now need to go into the weekend and find the Canada data equivalent for if I don’t. DAS not good 😂
Many people do 401(k) and a Roth conversions because they realize you actually end up with more money in the end. No forced disbursements. Many retirees regret having a 401(k) and wish they would’ve used a Roth
My base pay is 101k and I max out my 401, I maxed out 10 years ago when I made 80k, it's doable, I bought my house in 2010 too. Obviously everyones finances are different, but it's possible. You just have to commit.
And I'm nearly 40 with 433k in my 401k.
34 with 140k in my 401k through work, 35k in Roth and only 2k in brokerage account.. buying schd in my brokerage but just started
Just turned 37 with $170k so you're doing awesome. I feel like I'm never going to make it to the 1 million plus that they say we're going to need, and I have no idea how we're supposed to invest 15% or Max it out. I really hope retirement is achievable because I really don't want to work until I kick it
Heck yea, crushing it!
Need access to money for investing in brokerage and real estate if you don't own property
Too heavy in accts that you can't use until 59
With limit investment options
In brokerage you can double a position in one day
Just gotta learn the market
Or get a long term gain by building your own stock portfolio
Don't put any more money in retirement funds.
Fund emergency fund brokerage
Loan from retire fund to buy real estate
30 with 150k in my 401k, 40k in Roth, and 56k in brokerage
@@kylerhaab7596 Killin it, really starting to question my life choices now
Hey man, you earned a subscriber. I am glad you are focused on helping your parents out, something that is rare nowadays. I hope your youtube career skyrockets even more.
Thanks man, fire info as always! You’re not alone in the “I’m my parents retirement plan” boat. I think there’s a lot more people having to take care of their parents financially in the US than many realize.
The real magic trick was slipping Cosmo Canyon in as background music and nobody noticing.
Really enjoyed this video. I'm considering your advice, because thousands of dollars have been disappearing from my 401k due to soaring inflation, and my concern is where to safeguard and grow remaining cash about $500k+ for the next 2-3 years at no risk. I'd love to retire early and afford a life after retirement.
I love that you jump into the traditional YT influencer "one trick" type formula occasionally just to roast it.
I signed up for the company 401K, but I don't think I can run that far.
😂😮😅😊
I cant focus. Im to busy trying to hear the badly mixed red xiii theme
Always do Roth. Rather pay taxes on the 100k I put in with a higher tax bracket then the $1 million+ it grows to at a lower tax bracket when I retire
The parents becoming dependents is a huge problem for a lot of us milenials.
401k means you put in $4 and when you retire you only get $1 because of the taxes 😂
And if the US defaults on its debt : “ Here’s how many hours you need to work to buy Taco Bell this week”
By far the most fun video in a long time. Keep it up Andrei !!! We need this !!!
I’m 43 and started my 401k at age 39. I have 170k in it now.
I am late bloomer couldn't afford to invest..I am 40 and want to start now. What are the different retirement account you invested?
One important item to add regarding Roth 401k: When you take distributions, you will still have to pay income taxes on the EMPLOYER MATCH and any growth associated with that match. Even though you take out taxes when contributing to a Roth 401k, the employer match tax is not being taken out, and is still subject to traditional 401k rules that you can't escape from.
Going forward that will change. Secure act 2.0 allow employer match to go in the Roth account.
This is inaccurate.
Misinformation be careful how you interpret these words
How's no one talking about the ff7 cosmo canyon them in the background lol
This is the first video I’ve ever seen that actually quantifies goes like you did. Really helps break it down to a reality check. First time seeing a video of yours but will definitely check more out
Let alone addressing the issue of parents lack of retirement planning as I’m in a similar situation in that regard
My takeaway from this Video: “Is that Cosmo Canyon Theme in the background?” 😅
we need a whole series or 2nd channel on 401k's 💪🏽💖
No you don’t, just start it
A blend is best.
If Roth conversations are around, them 401k is slightly better.
If Roth conversations go away, Roth IRA is probably better.
But the best is a blend. It's possible to withdraw an unlimited amount and not change tax brackets when using a Roth in retirement, so $0 in taxes.
But by using a 401k and remaining in the 0-10% tax bracket you can use the Roth to not go over yet withdraw $80,000 per year and that not pulling much from the Roth.
Plus, stay in a low enough tax bracket and dividends aren't taxed. The Roth can keep you there. It can easily keep you in the 15% tax bracket, if taxes don't change much before retirement.
So, 401k better for singles, usually but a Roth is still helpful.
Roth better if married and for inheritance.
Can you do a video explaining after tax contributions? I work for an aerospace company and they offer the after tax contributions 401k
Roth is better than traditional. Gains not taxed.
I'm 30 and I have 13k in my 401k the numbers were accurate
Unfortunately, a lot of that information doesn't apply to many of us. I don't think the majority of people will have a home that is paid for by the time they retire. A lot of people can't even afford to buy a home period so many of us will be lifetime renters.
Then you better get saving champ, or your golden years are going to be hell. Nobody is coming to save you.
My problem with the standard priority list is the ranking of your mortgage. If you have an interest rate of 4+%, that should bump up the list due to the risk of losing a job
the thought process is you will never be able to get debt at that low of a rate. So that money would be better spent in an investment. mental health is more important and that is why many prioritize paying off their home as quick as possible.
Been down the job loss road. So now we just want to pay off the house and reduce our expenses.
The lower expenses allow for more flexibility. The lower the income needed, the more job options you have. Any amount of money goes further.
Alternatively we could invest in a taxable brokerage account. This way we can pull out the money quickly.
Very good video. Lots of excellent information and still entertaining. Illustrating the difference between the average amount saved and the median isn't easy to do, but your explanation was spot on. It should also be truly eye-opening. There were two things you got wrong. The first one is, you pay off all debt except your mortgage before investing beyond the employer match for your 401k. The second thing you got wrong, and I mean REALLY wrong, is choosing between traditional or Roth, for any investments after what your employer will match. The question of whether or not you will spend more or less in retirement is often regurgitated by the well-meaning, so you're forgiven. The reality is, almost everyone spends less during retirement than they did during their working years, which would suggest you should stick to traditional 401k, but that's horrible advice! The better question is, do you want to pay taxes on the money you put into investments throughout your lifetime, or do you want to pay taxes on the interest earned on those investments, PLUS the money you invested, during retirement? The answer is very clear, or should be, for anyone with basic math skills. The Roth 401k is the better option, for anyone who can sustain the tax hit while working.
Also, all of those "X" times by a certain age range is complete garbage, due to the rule of 72. If you earn 7.2% on your investments, they will double every 10 years. So, if you have 6X your salary by age 50 (and your salary doesn't increase exponentially!) you'll have 12X your salary by age 60, with just a modest 7.2% return. Those numbers are completely unrealistic and ignore the parabolic growth that virtually all investment accounts demonstrate in the last 3-5 years before retirement. Complete nonsense and you should know better! ;)
Very interesting topic you have discussed. I am retired. I had simple IRA but it was good investment. I invested more in real estate so I am ahead of game. I will pass this information to others.
How do you see the current real estate industry? Will the current global economic inflation affect real estate?
How did you invest more in real estate, flipping houses?
0:47 YUP! I feel perssonally attacked. Thanks Andrei.
It's recommended to save at least 15% of your income in a 401k. You can use online calculators to estimate how much you should save based on your age and income. Saving at least 15% of your income in a 401(k) can help ensure that you have enough money to retire comfortably. By saving this much, you can take advantage of compound interest and potentially grow your retirement savings over time.
“We can all be sad together.” Yikes. I need to talk to my therapist, lol
Hey Andrei, keep putting up great content. Those card tricks were subtly impeccable. Quick question - how do you create those animations in your video?
Prioritizing your Investments graph is also golden.. simply golden.
$2m in retirement in the year of 2050 will mean nothing.
Exactly
Better than having less than $2m
Um way better than zero!
It’s criminal that these basic financial lessons aren’t taught in school.
I only had teachers stressing that we should all contribute to our 401ks when I started college, and even that probably wasn’t a typical experience for most since I majored in accounting.
I contribute to a Roth 401k, not because of the taxes will be higher or lower now, but because the way I see it, putting money in a Roth 401k is actually contributing more money. If you have 1 million in the account, it comes out tax free you keep it all. If you have 1million in the account on a traditional, and you get taxed at 20%, then it's like only having 800k in the account. So by contributing to Roth, I just see it as contributing more money, rather than play the tax number game.
The benefit would be a 401k match option via your employer with low volatility, but yes the catch is you are taxed
millennials rn without a house 👁️👄👁️
When i started to get into finance and investing, i did not understand much. After understanding the topic more, i think it is funny that now i would understand a 401k, which lots of US citizens don't understand. But... im not located in the US, so i would never be able to use it. 😅