More and more people might face a tough time in retirement. Low-paying jobs, inflation, and high rents make it hard to save. Now, middle-class Americans find it tough to own a home too, leaving them without a place to retire.
The increasing prices have impacted my plan to retire at 62, work part-time, and save for the future. I'm concerned about whether those who navigated the 2008 financial crisis had an easier time than I am currently experiencing. The combination of stock market volatility and a decrease in income is causing anxiety about whether I'll have sufficient funds for retirement.
This is precisely why I like having a portfolio coach guide my day-to-day market decisions: with their extensive knowledge of going long and short at the same time, using risk for its asymmetrical upside and laying it off as a hedge against the inevitable downward turns, their skillset makes it nearly impossible for them to underperform. I've been utilizing a portfolio coach for more than two years, and I've made over $800,000
Vivian Jean Wilhelm a highly respected figure in her field. I suggest delving deeper into her credentials, as she possesses extensive experience and serves as a valuable resource for individuals seeking guidance in navigating the financial market.
Thank you so much for your helpful tip! I was able to verify the person and book a call session with her. She seems very proficient and I'm really grateful for your guidance
The thought of retirement makes me cry. My apologies to everyone who have retired and filing social security during this time after putting in all those years of work just to lose everything to a problem you weren't to blame for.it's especially difficult for people who are retired.
True, It has never been easier to understand how to build your money after retirement than it is right now with the inflation, when you may study and experience a completely variegated market passively by employing a successful portfolio-advisor. The impacts of the U.S. dollar's gain or fall on investments, in my opinion, are complex.
Even if you’re not skilled, it is still possible to hire one. I was a project manager and my personal portfolio of approximately $850k of my retirement pension took a big hit in April due to the crash. I quickly got in touch with a financial-planner that devised a defensive strategy to protect and profit from my portfolio this red season. I’ve made over $250k since then.
Well, there are a few out there who know what they are doing. I tried a few in the past years, but I’ve been with Sharon Ann Meny for the last five years or so, and her returns have been pretty much amazing.
@@mikeharry96: Every decade is very different re inflation for the past century (and beyond, but we've had very good data since about 1929). Every decade things are different, so there are varying reasons WHY inflation and interest rates move around. This is nothing new, despite all the usual politicking we've been seeing recently, greatly exaggerated (and often false) from the Trumper lack of reality set. Big hint: Well under 4 percent inflation is VERY average since the early 60's (when I was around to be able to pay some attention).
The avg. American is having a tough time, I know I am not alone. There are others in same position as me. By certain statistics: 22% of americans have no retirement savings. 64% are worried that they will not have money in latter years while 47% of adults who are not yet retired think they have to work part-time in retirement. How can I best grow the 100k I have saved seperately outside retirement access which of course had depleted over the years?
GEN X (46) 1.7m net worth. 1.4 in the market. Started at 21 saving 10% plus match. Steady increase over time. Now wife and I are at 28% including match. Number is 3m and retire at 55. Using 6% ROI we are on track. Automatic investment is key. Set it and forget it until the next raise. I hate that it is taboo to discuss with friends or family. It's a lonely road. Good luck everyone.
Put your money into something safer as stocks will obviously be the worse possible place to put money in the upcoming decades. The safest bet is to short the U.S. dollar or bet against the U.S. dollar by buying gold.
I think you're doing great. I retired 2.5 years ago at 56 with a number similar to your target. So far it's working great and you're right, it's a lonely road. Just remember when you leave your job, you'll most likely leave your friends working. I now have new friends, but they are 1 to 2 decades older than me. Otherwise life is great as a retiree. Good luck on the rest of your journey. It is doable.
Gen X (56) 6m net worth. 4.2m in the market. Started saving at 19 minimum 10%, was closer to 30% when I retired earlier this year. My number was 2.7m, was conservative in my estimates and pessimistic about returns. This made it easy to overshoot, looking forward to a long luxurious retirement.
Been retired for 5 years. My advice to young people: Put a small portion of your income on auto-withdraws into a Roth, ignore propaganda media, and don't expect the government to bail you out. Worst thing you could do is postpone retirement saving while being promised (student loan) bailouts, or some other vote buying scheme.
Lol. You got it. I think the Government/biden is doing a great job giving people excuses...teasing that They/All will pay for their college etc.. for control.
Vote buying scheme? Is promising tax cuts for the wealthy a vote buying scheme? Or offering zero regulatory oversite for pollution industries? Would that be a scheme as well?
@@1515cando The tax cuts that were passed with bipartisan support in 2018 generated higher tax revenue, while increasing take home pay for all classes of people. The Treasury Department reported this week that individual income tax collections for FY 2018 totaled $1.7 trillion. That's up $14 billion from fiscal 2017, and an all-time high. And that's despite the fact that individual income tax rates got a significant cut this year as part of President Donald Trump's tax reform plan. It's hard for Socialists to understand, but less taxes on businesses means more jobs, it also means more money in pockets of consumers, meaning businesses can afford to hire and pay more. Unlike, Bidenomics.
@@1515cando - Corporations don't vote. The truly wealthy are a tiny fraction of the voting public. Politicians give them tax cuts or lower regulations in return for the lobbying dollars and campaign donations (bribes) they were given. But before they can get those donations, the politicians must get elected. That is where the vote-buying comes in. Millennials and Gen-Z (the ones with the student loans, or young children eligible for child tax credits) are the ones targeted for vote buying as they are the largest voting block.
My wife and I are millennials, we’ve been broke, but the future looks very bright. Pay off debt, work hard, be patient, and avoid lifestyle creep, you’ll be fine. You don’t need to upgrade that Honda to a Lexus, you don’t need to DoorDash dinner when you’ve got leftovers, a vacation is about time away not time at a place.
@45 my wife and I early retired; we were very frugal and paid of a mortgage early; in fact, we were viewed as the weirdos for not keeping up with the Jones's next door; but May 2022 when we paid of our mortgage many were surprised; fast forward September 2023; we packed up and are now leaving abroad. Writing from Japan bound for Thailand in a week. All the best!
These days, both door dash and fast food are just nonsensical, given the prices. If you want bad health over time AND not to save enough, that sort of behavior will help get you there. (I'm talking about as a regular habit, not the occasional thing for whatever reason).
Yeah, it's almost like these articles are designed to discourage people from sensible planning. I bet the next article was about how to make passive income in your spare time and get rich overnight.
Also, full or half time blogging or making videos for clicks for revenue full or half time because you need the income is NOT really retiring. Buying a house you can get a 15 year mortgage on, and having a decade or more with NO house payments is a BIG help re having big savings to invest during your peak earning years. Having the biggest possible house is NOT the be-all end-all to be happy, any more than luxury cars, avocado toast, $10 coffees daily, etc. etc.
Some of your best work today Erin. As a recent retiree at 64 with a multi 7 figure portfolio we lived by many of the suggestions you've made in this video to get there. What most younger folks fail to really understand is the true value of compounding and building up your portfolio earlier in your career so it works for you. They think they have time to save down the road. You're goal should be to reach that point when your investments make more in a year than you contribute. The earlier that happens the better because later in life when family obligations kick in, college, weddings etc. you cannot save enough to make up the shortfall.
Respectfully, what you may not appreciate about what the younger generation has to deal with. You were able to buy a house for 50-100k. We cannot buy a house for less than 350k. It is increasingly harder to save in this current economy further because everything is so much more expensive. I am fiscally conservative, never took on school loans, have worked since i was 15, make a solid income, save, and live within my means and it’s taken me until age 37 to be able to save an effective amount.
Her advice works until the U.S. stock market corrects to fair market value some 80+ percent lower. Putting money into a ponzi and never cashing it in only works if you die first before the stock market corrects back to the mean.
@@Mtjtt1357 - you may not be aware that your parents and grandparents felt the same way. The housing prices you mention of 100K is representative of 1975. At that time, we were in shock that prices were DOUBLE what they were 4 years earlier (in 1971). Inflation was high. The average wage was under 15K. That house represented 6.6 times our income. In 1970, that house was just $30K and with wages at 10K, it was only a 3x income. So, yeah... how does that match up to today? A $100K house today is a $652K house. Average wage of $75K. It's about 8.7x income. BUT - There is a BIG difference that makes the playing field equal Back in the 70's, home loan interest rates were about double what they are today. This makes today's struggle fairly equivalent to 1975. YES - I had the same discussions with my father. Impossible to get in the market I'd say. I did. My kids said same. But then they bought. Watch for the dip, and then buy. It's possible.
Gen X here - Absolutely, retirement is possible for any generation if you generate enough income to live and invest. I think there are three keys once you have a little extra income to invest. 1. You have to believe it's possible and I know it is. 2. You have to show up and invest a little time into making sure your money gets invested. 3. Be patient. I know it can be done because I did it and was able to leave my job at 56.
A moderate amount of conservative thinking is definitely a good thing in the world of financial planning, as long as it doesn't spiral into hedonistic doom-spending. It's true that there's no guarantee that the next ten years will look like the last ten years and not everyone will be able to replace 80% or more of their income with retirement savings, but it's better to keep on saving anyways and replace 60 percent of your income in retirement than giving into doom-spending and replacing none of it.
So true. I actually don't think 4% going forward is an unrealistic long term rate of return. It kills me that advisors cover their butt with the obvious mantra that past returns are not indicative of future returns, but that's exactly the expectations set when they quote a "safe" 4% withdrawal rate, based on a study of PAST stock market performance. Well, that past performance had a huge demographic of boomers being born and consuming throughout their lifetimes to boost the economy, PLUS the globalization of capitalism. Those things aren't going to be repeated, PLUS the world economy will have to pay rising costs for climate change going forward, so we're not getting the 10% historical growth anymore imo, lucky to see 5%... In other words, don't bet on huge exponential growth to power your retirement nest egg. But luckily, that also means inflation will calm down and therefore you can not only keep up, but get ahead methodically too, IF you apply yourself. And finally, it means it's even more important to start early, cause it's going to take that much longer for compounding to really kick in, if the rate of return will be lower than historical.
GenXer here (56). My generation has benefited in part due to the internet and technology boom of the 90s. Of course, to have have benefitted from that boom, one would have had to have been invested in the market. Per John Bogle's advice, I prefer to invest in index funds. For ALL generations, I believe that the most important factor is knowledge. In a perfect world, every individual should complete a personal finance course such as Dave Ramsey's Financial Peace University. For current and future generations, I believe there is great potential ahead such as AI, medical advances, etc. While the past 30 or 40 years have been promising, I believe the near future could also be very promising.
As an older X you had the ability to get in during the unbelievable late 90s bull. I'm 45, so younger X. I graduated college in 2002 right into a layoff in 2003 that set me back. Got into a nice paying job in 2008 then another layoff in December 2008. That set me back hard. At 29 I turned my back on my entire profession (architecture) and went to grad school for accounting. Graduated but as a mid-30s guy with a new baby at home I found it hard to get my foot in the door and ended up being a SAHD for years. Until we were down to our last $600. Then at age 39 in 2018 I took a job in my old profession (architect) for 33% less than I was making in 2008. This job is government health care centric. 21 months in Covid happened, which was and still is brutal for us. As of today we are still 40% understaffed due to turnover during Covid. I was WFH and helping my son do home learning during this time. The good news? My salary has tripled since 2018, my job security is unbelievable, I'm 4 years away from being vested in a really nice pension, and my wife and I are able to invest 70k this year and take nice vacations. We are on schedule to join the 2 comma club this month. Our only debt is 7k on our house, which will be paid off by Christmas. Life is tough. It helps having a spouse who works and is frugal. My wife is a teacher and is 8 years away from an even nicer pension. I will also have S.S. as my gov job has a 218 agreement wherein I pay into S.S. The first 18 years of my post-grad life saw the Gulf War recession (or dot com bust), the Great Recession, and Covid. Positives are my house and mortgage were both pretty cheap in 2010. But saving for 4 years is what made us able to pounce. We are hoping to retire around 53ish. It's never too late to get your butt in gear.
@@robloxvids2233 yep - you have really kept the faith - in your abilities and commitment --- also, the old adage of "one spouse, one house" is a wonderful thing. Just a comment applauding your journey now in the future.
No retirement, no savings; but at 45 year old; I have a pension (military), healthcare, and a passive income on rental properties. In all I have an income of $80K annually. Thank God; all the best everyone!
@@havenpersonalcare7968 What I mentioned are benefits to having a retirement fund. We have the same (San rental) that you do and having additional savings is beneficial. Looks like you don’t have a need for that which is great! 👍
It’s also important to understand that savings rates tend to go up as you start getting paid more. You will likely be earning quite a lot more money at 45 than you were at 35. This makes it easier to save. So right now saving $40k/ year seems impossible but in 10 years when you’re earning $30k more per year than you were it may not be so lofty. Focus on saving what you can and growing your income.
Solid advice as usual Erin. Telling people not to give up or panic, just buckle down and stick to the investing fundamentals. I have seen other articles recently that basically say us boomers need to just hurry up and die already so we can pass down inheritances to "rescue" Gen X and Millenials who haven't saved enough for retirement.
Great Episode, Big Finance Planner messages are frequently couched to deliver a very different story from reality. Always refreshing to see you put the effort in using research fact based data and clearly communicating reality to your audience! Cheerful and digestible. ROCK ON FINANCE Erin!
at 35 I had zero in 401K due to divorce. 25 years later my Federal TSP is 670K and this on an average salary of 60K. When my wife and I retire (me 63, her 57) our combined TSPs and HYSA will be close 2 M. No Debt, 4 pensions, plus SS when we hit 70. We started "late", but with aggressive investing in C & S funds and maxing out our contributions we have built a great retirement.
Good morning Erin. This was another excellent vid and discussion. I feel your analysis hit the mark and your explanation was spot on. People need to quit "wishing and hoping" and start investing in themselves and working toward meeting their goals. They need to be learners and seek out, truth tellers as Paul Merriman calls them, and make a habit of learning. As you show every week in your content, it really isn't that difficult if you only put in the work and effort. Much like everyting in life. Have a great week Erin. Larry, Central Valley, Ca
I've been watching your content on-and-off for a few years now, and I have to say I really enjoy the use of the bullet journal background for your slides - even the news articles! Your content as always is super educational and applicable, but just thought I'd share that aesthetic shout-out! Thanks for always making great videos!!!
So this makes me curious about what the income replacement rate is from a historical point of view. In my own planning sessions with my wife we determined that we NEED about 35% of our income once retire to get by. So anything over that 35% level allows for the traveling, inflation and unexpected expenses that nobody can foresee.
It’s such a wide range! I have seen research with numbers as low as 38% all the way up to 80%. And as always, depends on the individual. You sound like you will be an a wonderful position! I’m so happy for you!!
35% seems pretty darn low for most folks, but maybe you had a higher income than average. Of course, the biggest thing we can control is not having a mortgage in retirement.
Exactly the percentage I'm looking at. Plan on retiring in 7 years at age 60, 1 million dollar portfolio at 60, no debt, and $42,000 per year will afford me a very comfortable retirement even factoring in inflation. The biggest factor in this being possible for me is not having any health insurance costs from age 60 to 65, I have a benefit that allows me to stay on my employers insurance plan and an HSA that will pay all my premiums for 5 years+ until Medicare.
@@belowsealevel8663 health insurance costs from 60 retiremennt to 65 is huge --- i also had an employer who covered insurance payments - it actually was an "HRA" vs an "HSA" so i think i understand you ---- nice employer perk!!! you're pretty solidly on track with your plan --- congrats!!
I really liked your point out of lifestyle rising versus pay raise. I had a boss that fell into a trap of an escalating lifestyle vs pay raise. He made a bunch more money than me over our careers, but I managed a much better life funding as I tempered my life style changes vs raises.
A kot of these publications are business oriented and have a vested interest in keeping you in the workforce as long as possible. So they over state what you need to retire so you keep working for as long as possible.
Great video. I cringe when I see articles like these. Thank you for poking holes in it. You don’t need that much to retire. Nothing beats a plan. 80% of current income, 4% rule, and ‘x’ times income at various ages are cookie cutter planning approaches to something that is so important. There are many online planning tools that are free and for a modest fee.
This information I see is very troubling . I realize many Americans cannot see past 2 years. The need for a 10 year period of pure investment to establish a base $100k-$236,000 from 25-36 years old.. Then, the hope of appreciation over the next 29 years to reach a nest of $2 mil-$3mil...with 4% -8% withdrawal rate seems impossible. Lastly, most 20 or 30 something people are trying to establish a family, while creating a financial strategy... You'd have to be a frugal family or FIRE movement ultra strategist... Thanks for bringing up the great Retirement Myth. game breaker... 😔
So much of the financial (and other) media is a about getting people upset enough to tell their friends about this fake scenario. People need to just start saving and investing. That way the worst that can happen is you have a lot of money going into retirement. And money => options.
Completely accurate, and not really fair to lay the kind of blame/judgment seen in this thread. As a lawyer, a lot of my boomer clients went to college for a few thousand dollars, had one or two employers, have a pension (often a great one), and saw amazing stock market appreciation even with savings habits that were not that impressive. Totally different world today.
I’d argue it’s not that different. Sure colleges are more expensive & pensions are gone, but the market has been great. There’s lots of reasons for optimism that the market will boom as we’re entering a technological revolution. Focusing on investment instead of earnings will be more important moving forward.
I didn't have experts to advise me. I listened to older co-workers. Retirement planning and retirement is individualized. Advice to my 24 year old defer the max of company match. Then decide a percentage you want to save/invest. 10%, 15%, 20%, side hustle income. Pay off a house. Keep a car 7 or more years. Me, retired 17 years now at age 69. Thanks for your videos.
One negative year in equities in the past 6. All the rest have been double-digit gains. Always be buying and investing, regardless of the market conditions. Have been investing for over 30 years now. It takes years for you to feel like there is anything happening with your portfolio. Then one day, the compounding hits the boiling point and you earn more in your portfolio than you do working. It changes your perspective on life ahead. I have quit arguing with those who say they cannot get ahead and blame their situation on others. It all comes down to self discipline.
I was doing the math I had just changed my contribution to 12% with + 4% company match and even then it says by the time im 65 I would have around 2.2 mil but Taking inflation into account the buying power a month from monthly income only 4% ($7,333 a month) withdraws from the 401k would only be about $2416 in today's dollars buying power.... wich is less how much I make now and I dont feel well off I cant afford rent in nice areas or without roommates and those numbers might seem low to some of you but 2.5 mill is almost 10x what the national average has.... things are gonna get ugly and real for alot of people as they age, I need to make more and save more otherwise I will be less well off when im 65 then now
You'll also have SS though. And most people have less income in retirement. Hopefully your house is paid off by then, and if you have kids they're grown and gone by then.
Retirement is tougher than it used to be because of inflation and less pensions and possibly social security. I don't have much saved for retirement yet, but I know that if I keep dollar cost averaging, I'll put myself in a better position to retire 30 plus years from now.
People don't believe all of what you hear or read. In March 2021, I was 59 and had just $296k in my portfolio. It's 40 months later now in July 2024, and I've been managing my entire portfolio on my own with nothing more than a GED for an education. I now have $875k, and just the other week, it briefly hit $940k. You can easily turn the tables if you put your mind to it. The question is, how bad do you want it?
@Erin Talks Money. You do nice work with your videos. Wouldn't a balanced portfolio return be more accurate to project FV's? I would recommend return projections that vary over time (Glide path), but of course, we know that most individual investors will underperform the returns of their mutual finds, because so many sell low and buy high. Folks: encourage your kids to invest early in their careers...don't go just for the match...invest 20%. Study Time Value of Money and you will see why. "Money Doesn't Grow on Fees".
Erin has her head in the clouds gambling which is another word for investing is all about weighing risk, reward and upside against downside. The people today in stocks are like the fools who just hit big on a slot machine only to keep on playing the same slot machine and give it all back instead of putting the money into less risky investments like gold and long term bonds.
I’m a great saver but a terrible investor. I experimented with various investments in my 20’s and decided I didn’t understand any of it. It just all seemed like gambling. I invested conservatively after that and I probably lost most of what I made in the 2008 market crash. I’ve got a comfortable retirement now because I had some decent savings and I have a generous COLA’d pension plus Social Security (also COLA’d). I was an engineering manager so my base salary for my pension was pretty high. Finally I retired to Thailand so my cost of living is low. Assuming a >4% return on my investments would have been a huge mistake. I am grateful for my pension. I retired at 55 in 2011.
For me, retirement is just around the corner and having @ 1 million in savings for me will be plenty since we will be getting $6000 a month in Social Security and we have no debt. I am not terribly worried.
the old live below your means while preventing lifestyle inflation and using a budget as a roadmap --- sort of implies a zero-debt mentality but it is always good to explicitly call it out.
I wonder whether older generations feel that they do not need to have as much money for retirement because they have pensions and Social Security (or expect to have them) the whole time. Also, student loan debt and the housing market are pushing major life events and purchases futureward for a lot of younger people, meaning that they may need to pay for those expenses in early retirement, meaning that they need extra money saved up. But none of that explains why younger generations are not matching Millennial estimates.
It probably depends on the person, some people find a lofty goal like that motivating, some find it de-motivating. So I don't know if it's a good idea or not to point out that the expectations are much higher than they'll likely need in reality. It's popular in personal finance circles to ignore Social Security, but you're just flat wrong if you think it's going to go away completely. I think the most likely scenario is that there will be some combination of changes to the tax, the funding structure, and the COLAs to avoid any outright cuts...at most the benefits may drop in inflation-adjusted terms. Also, most people just don't have a good sense of what their expenses in retirement are going to look like, especially if they have kids. We (40 & 39) have four of them and if we based our projected retirement expenses on what we spend now, we'd also feel like we could never retire. But in 15 years, the kids will (hopefully) be well out of the house and self sufficient and the mortgage will be just about gone. Even if all of that only cuts our current expenses by half, then our projected SS benefit at 67 in today's dollars will cover us entirely. And that's not to mention we have about 2.5x income saved for retirement...a little behind according to Fidelity's benchmark, but we didn't really get serious about it until about 5 years ago. Live below your means, people!
In 2006, NVDA was trading at and equivalent of 87 cents a share. (Don't make me do the stock split math, it just makes the example harder to understand). Last week it hit 1200 dollars a share. Or, if you invested a mere 1000 dollars in NVDA in 2006, you would have a nice start on a nest-egg today (about 1.4 Million dollars). They key has always been invest while young, and let the market work for you. Once you get old, put the money in something stable, like bonds. This way market dips and crashes can't ruin your retirement plans. It is better to do something, even if it is small, than doing nothing.
Getting a bit of a late start can be overcome. I'd worked at a family business until I was 35 (good memories, no money) and had zero saved for retirement. I just retired a couple days ago, not quite 30 years after having zero saved/invested. Our retirement investments are over $2M, zero debt, total net worth somewhere around $3.5M. You can do it. We didn't do anything fancy, just lived below our means and invested our money in boring broad market index funds. No get rich quick schemes, no "magic" advisors being shilled in TH-cam video comments. And we even did it while buying fancy coffees when we felt like it ;) Yes, I did have a good paying job but nothing extraordinary. In fact it would be considered a very so-so income in a high cost of living area. Our trick is we don't live in a high cost of living area.
All I can say is the best time to have invested in a retirement account was when you were 20. The second best time is now. I regret not starting earlier. I didn't start until age 32. My wife and I have three employer sponsored retirement accounts and I won't stop working until I hit age 70.
@@dantheman6607 Why isn't it realistic? 70 is young. I turn 60 next year and I am in the prime of my life. With people living longer I want to make sure that I have the most bang for my buck in retirement. Of course If I had started investing earlier then yes, I could have an earlier exit plan, if I had wanted one. Since I started later I am honed in on what I have to do as opposed to what I could have done. I am fine with that.
Training my kid for coast FI. They put 25% directly into 401k and ROTH from their job. Welcome to live with us until marriage rent free as long as 25% is going to retirement. Happy to pay their car insurance on Used Hoopty cars only!!
Great, well-presented video as we can expect from Erin. Most retirement calculators are useless IMO as they are based on inputted assumptions from the user. The user can then use the calculator to depress his or herself or provide false comfort, whichever his or her objective is at the time. The subject investor is well head of the game at 28 and has little to worry about if she stays on track IMO. I believe most millennials will be fine because they understand the need to save and invest for their future and, as Erin mentioned, have sufficient time to do so. Some Gen Xrs, on the other hand, may be in trouble. The need to save and invest on your own for retirement was not instilled upon most Gen Xrs because our grandparents lived, and to an lesser extent, our parents live well in retirement on pensions and social security. Pensions are mostly gone and the SS cannot be counted upon. Due to this, some of the particularly later Gen Xrs are likely to struggle in retirement because, upon realizing this, they do not have the time to make up the difference. My thoughts anyway.
Just some friendly feedback. I'm a big fan of your content and appreciate the value that you are sharing! The new typing sound effects however are kind of distracting for me. That said, thank you for enriching everyone's financial journey!
Millennial here (41): $850k saved on a nearly 6-figure salary. I save ~50% of my gross salary; lowest year was 20% savings rate. Plan on retiring at 50, 55 at latest. The vast majority of millennials deserve to never be able the retire since many of them that I see earn more than me and have no savings. It's self induced and you reap what you sow.
There are a lot of jobs in our country to make a great living. People need to be realistic and there's nothing wrong with starting at the bottom. Stop comparing yourself to those you see in social media.
I'm a Xennial, and believe I will be able to retire. I also though work in tech and so have a larger than average income, and have been able to save, and increased my 401k savings rate when I would get a raise. Not everyone can even say that they get raises in the past 20 years though.
People need to factor in inflation! Gen Z will need to shoot for about 2 million at least. With a 4% withdrawal 80k sounds good but remember that 80k could look like 32k in terms of what it will feel like in today's money. Also keep in mind that social security is VERY unknown at the moment and mathematically will run out before then.
"Nobody knows what will happen in the next 30 years." I've been in my career for 33 years. So, looking back, I can remember that same mindset. Yet amazingly, it ended up almost exactly what I predicted. The average rate of return over the previous 30 years was pretty close to what we've seen over the last 30 years. Inflation was pretty close to estimates, even with fluctuations. That means the spreadsheets I developed in my 20s was pretty close to where I am in my 50s.. My point is that going with historical data is not a bad way to plan. It should get you in the ballpark.
I'm in my 60s. I still don't know how much I need for retirement. What will the inflation rate be? What kind of return will I actually get on my investments? Will Social Security continue to be available? Will taxes go up? By how much? Will the government's addiction to debt finally come back to bite us? Will the government decide to tax unrealized gains in retirement accounts? I could go on, but you get the idea. I may live another 30 years. A lot can happen in 30 years.
@@rexstrom5362 i guess the old adage of know what you can control to me is valid & your first sentence is of course concerning: I still don't know how much I need for retirement. I just do the best to project individual categories and add to them using some planning software (derived from my own spreadsheets) so i smooth out the bumpy expense ride started late in saving (40's) but in mid-70's & retired for 5 years --- worked so far .... my reality is still better than my projections. i'm here because i just like Erin & i can rethink of my other plans while confirming her insights.... Good luck 💪🤞👍
I know the world will turn communist under one world leader. Russia will play a prominent role in the next 30 years. Putin is the focal point in time as Russia will continue to take each country one by one.
I retired two days ago (56) and I still don’t know how much I will need for retirement. We could play the what if game forever but I know that because I did the legwork early on and let compounding do it’s job that I will be fine. Start investing early, increase investment rate yearly, and be patient. I do have a pension but my additional investments over the years give me comfort knowing I can withstand whatever the market throws at me in the future.
Not me freaking out earlier thinking I won't have enough saved for retirement as a 30 year old with 1x income saved in investments.... Im choosing not to save as much as I could this year, but I don't think I'll feel safe until I reach CoastFI... projections say my fear is irrational.
Almost certainly not. That’s a safe withdrawal income of $64K which is not enough to live on without a paid-off home. 20 years from now, there’s a good chance that will be poverty level.
Especially if they vote for another 4 years of "Bidenomics". 4 more years of 'Building back better' will likely require a 4 to 5 million retirement savings.
@@Ryhm14 Still not enough unless you’re in a paid-off house. I doubt millennials will have that if they’re struggling to save. Millionaire status isn’t retirement anymore. I’d put a comfortable retirement closer to $3M. Less is probably doable but your geographic options would be limited.
But but but we gotta go to Disney at LEAST twice a year dropping 12k in the process !! And we NEED that $125k Cadillac Escalade !!! And the best one is “ We spent $100k on the wedding and went to Australia for two months “
Opened a Roth IRA for my two teenagers and have been maxing out the contributions into their account. They know theirs an account BUT think it only has what they contribute into it.
Erin, do you have a way for subscribers to suggest topics for future videos? P.S. Another great video (that's why I always click the thumbs up button). Why are only 1 in 15 doing so?!!!
Let's not forget that the entire concept of "retirement" started in the early 1900s, and 1935 in the US. And when the social security program was created in the US, average lifespan aligned such that on average, people never even received a social security check becuse they were dead by the time the "retirement age" came to fruition. If you feel like you're never going to retire--don't worry--you're on par with pretty much everyone in history.
Wars, boarder failures, covid Scare/control, economy/inflation etc.. yes, plan on "Biden" type years/terms off and on. There so many variables. Save, live within your means. Below your means.
None, she just goes with trends which are in actual fact ponzi's with no fundamentals whatsoever. Telling people to put money into the U.S. stock market when its the most overvalued in all of history might work short term but long term it ends up in tears just like how every ponzi in history has ended. Gold and long term bonds is where to put money not in U.S. stocks.
Stop eating out every week.Buy good used vehicles.Stop justifying why you deserve an expensive vacation every year.Buy the house you would rather not own and tough it out and work your way up,call it making sacrifices.It works.
These kids as I call them in their 20s and 30s worried about retirement cracks me up, enjoy life be more concerned about buying a house finding a spouse raising a family, in the meantime keep dropping into your 401k at least the minimum to get a full match and before you know it you can really plow $$$$ into it in your late 40s to early 60s!
Putting away 1,500 (at 10% return rate) or 10,500 (at inflation adjusted 7% rate) yields $1M over 65 yrs. So, put a few $$$ away for each of your kids at birth. Time is on their sides! A=A0 exp(rt)
That is not true at all. The average Millennial will inherit massive debt from their parents who took on enormous debt they couldn't afford in order to look "wealthy."
Boomers retiring today need about the same 1.7 million and much more if you're married. Millennial's will need to work until they die if they're renters due to rents costing more than people earn working. I live in Canada where the cost of living is much higher than in America and we earn much less but pay more in taxes.
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More and more people might face a tough time in retirement. Low-paying jobs, inflation, and high rents make it hard to save. Now, middle-class Americans find it tough to own a home too, leaving them without a place to retire.
The increasing prices have impacted my plan to retire at 62, work part-time, and save for the future. I'm concerned about whether those who navigated the 2008 financial crisis had an easier time than I am currently experiencing. The combination of stock market volatility and a decrease in income is causing anxiety about whether I'll have sufficient funds for retirement.
This is precisely why I like having a portfolio coach guide my day-to-day market decisions: with their extensive knowledge of going long and short at the same time, using risk for its asymmetrical upside and laying it off as a hedge against the inevitable downward turns, their skillset makes it nearly impossible for them to underperform. I've been utilizing a portfolio coach for more than two years, and I've made over $800,000
Mind if I ask you to recommend this particular coach you using their service?
Vivian Jean Wilhelm a highly respected figure in her field. I suggest delving deeper into her credentials, as she possesses extensive experience and serves as a valuable resource for individuals seeking guidance in navigating the financial market.
Thank you so much for your helpful tip! I was able to verify the person and book a call session with her. She seems very proficient and I'm really grateful for your guidance
The thought of retirement makes me cry. My apologies to everyone who have retired and filing social security during this time after putting in all those years of work just to lose everything to a problem you weren't to blame for.it's especially difficult for people who are retired.
True, It has never been easier to understand how to build your money after retirement than it is right now with the inflation, when you may study and experience a completely variegated market passively by employing a successful portfolio-advisor. The impacts of the U.S. dollar's gain or fall on investments, in my opinion, are complex.
Even if you’re not skilled, it is still possible to hire one. I was a project manager and my personal portfolio of approximately $850k of my retirement pension took a big hit in April due to the crash. I quickly got in touch with a financial-planner that devised a defensive strategy to protect and profit from my portfolio this red season. I’ve made over $250k since then.
Well, there are a few out there who know what they are doing. I tried a few in the past years, but I’ve been with Sharon Ann Meny for the last five years or so, and her returns have been pretty much amazing.
She seems to be well-educated and well-read. I ran a Google search for her name and came across his website; thank you for sharing.
@@mikeharry96: Every decade is very different re inflation for the past century (and beyond, but we've had very good data since about 1929). Every decade things are different, so there are varying reasons WHY inflation and interest rates move around.
This is nothing new, despite all the usual politicking we've been seeing recently, greatly exaggerated (and often false) from the Trumper lack of reality set.
Big hint: Well under 4 percent inflation is VERY average since the early 60's (when I was around to be able to pay some attention).
The avg. American is having a tough time, I know I am not alone. There are others in same position as me. By certain statistics: 22% of americans have no retirement savings. 64% are worried that they will not have money in latter years while 47% of adults who are not yet retired think they have to work part-time in retirement. How can I best grow the 100k I have saved seperately outside retirement access which of course had depleted over the years?
Think about actions you’re taking that might be harming you such as carrying over credit card debt each month.
@malika I agree withyou. I also think you should think about steps you can take to start. Start somewhere. Anything is better than being frozen even.
In my opinion, create a budget including income and expenses, do this with a financial advisor.
Plan with a pro advsor for a successful retirement.i work with an advsor and generated over 1 5 0 %
In 11 mnths with guidance.
GEN X (46) 1.7m net worth. 1.4 in the market. Started at 21 saving 10% plus match. Steady increase over time. Now wife and I are at 28% including match. Number is 3m and retire at 55. Using 6% ROI we are on track. Automatic investment is key. Set it and forget it until the next raise. I hate that it is taboo to discuss with friends or family. It's a lonely road. Good luck everyone.
Put your money into something safer as stocks will obviously be the worse possible place to put money in the upcoming decades. The safest bet is to short the U.S. dollar or bet against the U.S. dollar by buying gold.
I think you're doing great. I retired 2.5 years ago at 56 with a number similar to your target. So far it's working great and you're right, it's a lonely road. Just remember when you leave your job, you'll most likely leave your friends working. I now have new friends, but they are 1 to 2 decades older than me. Otherwise life is great as a retiree. Good luck on the rest of your journey. It is doable.
Gen X (56) 6m net worth. 4.2m in the market. Started saving at 19 minimum 10%, was closer to 30% when I retired earlier this year. My number was 2.7m, was conservative in my estimates and pessimistic about returns. This made it easy to overshoot, looking forward to a long luxurious retirement.
1.5 m at 43 years old. Goal is 3 million by 54.
And it is very lonely. It's sad. Thankfully my wife celebrates with me.
I retired at 55 in 2011. It wasn’t due to investing. Savings plus a great pension.
I was a guillotine operator but I never as able to get ahead.
😂😂
It was a dead end job anyway
Your company probably didn't use cutting edge technology.
@@Xe_None Yeah, they stopped doing that and went electric. That was shocking to me.
@@robloxvids2233 They cut my hours too.
Been retired for 5 years. My advice to young people: Put a small portion of your income on auto-withdraws into a Roth, ignore propaganda media, and don't expect the government to bail you out.
Worst thing you could do is postpone retirement saving while being promised (student loan) bailouts, or some other vote buying scheme.
Lol. You got it. I think the Government/biden is doing a great job giving people excuses...teasing that They/All will pay for their college etc.. for control.
Vote buying scheme? Is promising tax cuts for the wealthy a vote buying scheme? Or offering zero regulatory oversite for pollution industries? Would that be a scheme as well?
@@1515cando The tax cuts that were passed with bipartisan support in 2018 generated higher tax revenue, while increasing take home pay for all classes of people.
The Treasury Department reported this week that individual income tax collections for FY 2018 totaled $1.7 trillion. That's up $14 billion from fiscal 2017, and an all-time high. And that's despite the fact that individual income tax rates got a significant cut this year as part of President Donald Trump's tax reform plan.
It's hard for Socialists to understand, but less taxes on businesses means more jobs, it also means more money in pockets of consumers, meaning businesses can afford to hire and pay more.
Unlike, Bidenomics.
@@1515cando - Corporations don't vote. The truly wealthy are a tiny fraction of the voting public. Politicians give them tax cuts or lower regulations in return for the lobbying dollars and campaign donations (bribes) they were given. But before they can get those donations, the politicians must get elected. That is where the vote-buying comes in. Millennials and Gen-Z (the ones with the student loans, or young children eligible for child tax credits) are the ones targeted for vote buying as they are the largest voting block.
@@1515cando yes. It's all bullshit to get votes. No one cares about the people.
My wife and I are millennials, we’ve been broke, but the future looks very bright. Pay off debt, work hard, be patient, and avoid lifestyle creep, you’ll be fine.
You don’t need to upgrade that Honda to a Lexus, you don’t need to DoorDash dinner when you’ve got leftovers, a vacation is about time away not time at a place.
@45 my wife and I early retired; we were very frugal and paid of a mortgage early; in fact, we were viewed as the weirdos for not keeping up with the Jones's next door; but May 2022 when we paid of our mortgage many were surprised; fast forward September 2023; we packed up and are now leaving abroad. Writing from Japan bound for Thailand in a week. All the best!
Well said!
These days, both door dash and fast food are just nonsensical, given the prices. If you want bad health over time AND not to save enough, that sort of behavior will help get you there. (I'm talking about as a regular habit, not the occasional thing for whatever reason).
@@rogergeyer9851fast food inflation has been the most successful driver of eliminating it from my life
I hope the woman in the article sees this video. The authors are robbing her of hope.
I hope so too! 😊
Yeah, it's almost like these articles are designed to discourage people from sensible planning.
I bet the next article was about how to make passive income in your spare time and get rich overnight.
Work to be debt free before retiring!
No credit card debt.
No house payment.
No car payment.
Pay off student loans.
Also, full or half time blogging or making videos for clicks for revenue full or half time because you need the income is NOT really retiring.
Buying a house you can get a 15 year mortgage on, and having a decade or more with NO house payments is a BIG help re having big savings to invest during your peak earning years.
Having the biggest possible house is NOT the be-all end-all to be happy, any more than luxury cars, avocado toast, $10 coffees daily, etc. etc.
Some of your best work today Erin. As a recent retiree at 64 with a multi 7 figure portfolio we lived by many of the suggestions you've made in this video to get there. What most younger folks fail to really understand is the true value of compounding and building up your portfolio earlier in your career so it works for you. They think they have time to save down the road. You're goal should be to reach that point when your investments make more in a year than you contribute. The earlier that happens the better because later in life when family obligations kick in, college, weddings etc. you cannot save enough to make up the shortfall.
Absolutely!! Getting out front of father time with compounding is an absolute game changer when those spiky costs hit later in life!
Respectfully, what you may not appreciate about what the younger generation has to deal with. You were able to buy a house for 50-100k. We cannot buy a house for less than 350k. It is increasingly harder to save in this current economy further because everything is so much more expensive. I am fiscally conservative, never took on school loans, have worked since i was 15, make a solid income, save, and live within my means and it’s taken me until age 37 to be able to save an effective amount.
Her advice works until the U.S. stock market corrects to fair market value some 80+ percent lower. Putting money into a ponzi and never cashing it in only works if you die first before the stock market corrects back to the mean.
@parkerbohnn and how exactly did you determine the fair market of the stick market?
@@Mtjtt1357 - you may not be aware that your parents and grandparents felt the same way. The housing prices you mention of 100K is representative of 1975. At that time, we were in shock that prices were DOUBLE what they were 4 years earlier (in 1971). Inflation was high. The average wage was under 15K. That house represented 6.6 times our income. In 1970, that house was just $30K and with wages at 10K, it was only a 3x income. So, yeah... how does that match up to today? A $100K house today is a $652K house. Average wage of $75K. It's about 8.7x income. BUT - There is a BIG difference that makes the playing field equal Back in the 70's, home loan interest rates were about double what they are today. This makes today's struggle fairly equivalent to 1975. YES - I had the same discussions with my father. Impossible to get in the market I'd say. I did. My kids said same. But then they bought. Watch for the dip, and then buy. It's possible.
Gen X here - Absolutely, retirement is possible for any generation if you generate enough income to live and invest. I think there are three keys once you have a little extra income to invest. 1. You have to believe it's possible and I know it is. 2. You have to show up and invest a little time into making sure your money gets invested. 3. Be patient. I know it can be done because I did it and was able to leave my job at 56.
A moderate amount of conservative thinking is definitely a good thing in the world of financial planning, as long as it doesn't spiral into hedonistic doom-spending. It's true that there's no guarantee that the next ten years will look like the last ten years and not everyone will be able to replace 80% or more of their income with retirement savings, but it's better to keep on saving anyways and replace 60 percent of your income in retirement than giving into doom-spending and replacing none of it.
So true. I actually don't think 4% going forward is an unrealistic long term rate of return. It kills me that advisors cover their butt with the obvious mantra that past returns are not indicative of future returns, but that's exactly the expectations set when they quote a "safe" 4% withdrawal rate, based on a study of PAST stock market performance. Well, that past performance had a huge demographic of boomers being born and consuming throughout their lifetimes to boost the economy, PLUS the globalization of capitalism. Those things aren't going to be repeated, PLUS the world economy will have to pay rising costs for climate change going forward, so we're not getting the 10% historical growth anymore imo, lucky to see 5%...
In other words, don't bet on huge exponential growth to power your retirement nest egg. But luckily, that also means inflation will calm down and therefore you can not only keep up, but get ahead methodically too, IF you apply yourself. And finally, it means it's even more important to start early, cause it's going to take that much longer for compounding to really kick in, if the rate of return will be lower than historical.
GenXer here (56). My generation has benefited in part due to the internet and technology boom of the 90s. Of course, to have have benefitted from that boom, one would have had to have been invested in the market. Per John Bogle's advice, I prefer to invest in index funds. For ALL generations, I believe that the most important factor is knowledge. In a perfect world, every individual should complete a personal finance course such as Dave Ramsey's Financial Peace University. For current and future generations, I believe there is great potential ahead such as AI, medical advances, etc. While the past 30 or 40 years have been promising, I believe the near future could also be very promising.
As an older X you had the ability to get in during the unbelievable late 90s bull. I'm 45, so younger X. I graduated college in 2002 right into a layoff in 2003 that set me back. Got into a nice paying job in 2008 then another layoff in December 2008. That set me back hard. At 29 I turned my back on my entire profession (architecture) and went to grad school for accounting. Graduated but as a mid-30s guy with a new baby at home I found it hard to get my foot in the door and ended up being a SAHD for years. Until we were down to our last $600. Then at age 39 in 2018 I took a job in my old profession (architect) for 33% less than I was making in 2008. This job is government health care centric. 21 months in Covid happened, which was and still is brutal for us. As of today we are still 40% understaffed due to turnover during Covid. I was WFH and helping my son do home learning during this time. The good news? My salary has tripled since 2018, my job security is unbelievable, I'm 4 years away from being vested in a really nice pension, and my wife and I are able to invest 70k this year and take nice vacations. We are on schedule to join the 2 comma club this month. Our only debt is 7k on our house, which will be paid off by Christmas. Life is tough. It helps having a spouse who works and is frugal. My wife is a teacher and is 8 years away from an even nicer pension. I will also have S.S. as my gov job has a 218 agreement wherein I pay into S.S. The first 18 years of my post-grad life saw the Gulf War recession (or dot com bust), the Great Recession, and Covid. Positives are my house and mortgage were both pretty cheap in 2010. But saving for 4 years is what made us able to pounce. We are hoping to retire around 53ish. It's never too late to get your butt in gear.
I applaud and agree with your hope and optimism for the future . Much success!!
@@robloxvids2233 yep - you have really kept the faith - in your abilities and commitment --- also, the old adage of "one spouse, one house" is a wonderful thing. Just a comment applauding your journey now in the future.
No retirement, no savings; but at 45 year old; I have a pension (military), healthcare, and a passive income on rental properties. In all I have an income of $80K annually. Thank God; all the best everyone!
What about one off things like a big trip or a bass boat?
@@andysams6690 Been in Asia for about a year; travelled to South Korea, now in Japan, bound for Thailand Tuesday. All the best!
@@havenpersonalcare7968 What I mentioned are benefits to having a retirement fund. We have the same (San rental) that you do and having additional savings is beneficial. Looks like you don’t have a need for that which is great! 👍
@@andysams6690 yes; additional savings is on the horizon; just enjoying traveling with family for now.
I retired to Thailand in 2017. You will do fine with $80,000/year.
It’s also important to understand that savings rates tend to go up as you start getting paid more. You will likely be earning quite a lot more money at 45 than you were at 35. This makes it easier to save. So right now saving $40k/ year seems impossible but in 10 years when you’re earning $30k more per year than you were it may not be so lofty. Focus on saving what you can and growing your income.
Solid advice as usual Erin. Telling people not to give up or panic, just buckle down and stick to the investing fundamentals. I have seen other articles recently that basically say us boomers need to just hurry up and die already so we can pass down inheritances to "rescue" Gen X and Millenials who haven't saved enough for retirement.
Great Episode, Big Finance Planner messages are frequently couched to deliver a very different story from reality. Always refreshing to see you put the effort in using research fact based data and clearly communicating reality to your audience! Cheerful and digestible. ROCK ON FINANCE Erin!
at 35 I had zero in 401K due to divorce. 25 years later my Federal TSP is 670K and this on an average salary of 60K. When my wife and I retire (me 63, her 57) our combined TSPs and HYSA will be close 2 M. No Debt, 4 pensions, plus SS when we hit 70. We started "late", but with aggressive investing in C & S funds and maxing out our contributions we have built a great retirement.
Good morning Erin. This was another excellent vid and discussion. I feel your analysis hit the mark and your explanation was spot on. People need to quit "wishing and hoping" and start investing in themselves and working toward meeting their goals. They need to be learners and seek out, truth tellers as Paul Merriman calls them, and make a habit of learning. As you show every week in your content, it really isn't that difficult if you only put in the work and effort. Much like everyting in life. Have a great week Erin. Larry, Central Valley, Ca
I've been watching your content on-and-off for a few years now, and I have to say I really enjoy the use of the bullet journal background for your slides - even the news articles! Your content as always is super educational and applicable, but just thought I'd share that aesthetic shout-out! Thanks for always making great videos!!!
So this makes me curious about what the income replacement rate is from a historical point of view. In my own planning sessions with my wife we determined that we NEED about 35% of our income once retire to get by. So anything over that 35% level allows for the traveling, inflation and unexpected expenses that nobody can foresee.
It’s such a wide range! I have seen research with numbers as low as 38% all the way up to 80%. And as always, depends on the individual.
You sound like you will be an a wonderful position! I’m so happy for you!!
35% seems pretty darn low for most folks, but maybe you had a higher income than average.
Of course, the biggest thing we can control is not having a mortgage in retirement.
Exactly the percentage I'm looking at. Plan on retiring in 7 years at age 60, 1 million dollar portfolio at 60, no debt, and $42,000 per year will afford me a very comfortable retirement even factoring in inflation. The biggest factor in this being possible for me is not having any health insurance costs from age 60 to 65, I have a benefit that allows me to stay on my employers insurance plan and an HSA that will pay all my premiums for 5 years+ until Medicare.
@@belowsealevel8663 health insurance costs from 60 retiremennt to 65 is huge --- i also had an employer who covered insurance payments - it actually was an "HRA" vs an "HSA" so i think i understand you ---- nice employer perk!!! you're pretty solidly on track with your plan --- congrats!!
I really liked your point out of lifestyle rising versus pay raise. I had a boss that fell into a trap of an escalating lifestyle vs pay raise. He made a bunch more money than me over our careers, but I managed a much better life funding as I tempered my life style changes vs raises.
A kot of these publications are business oriented and have a vested interest in keeping you in the workforce as long as possible. So they over state what you need to retire so you keep working for as long as possible.
Great video. I cringe when I see articles like these. Thank you for poking holes in it.
You don’t need that much to retire. Nothing beats a plan. 80% of current income, 4% rule, and ‘x’ times income at various ages are cookie cutter planning approaches to something that is so important. There are many online planning tools that are free and for a modest fee.
Seems like REALLY poor research by the BI guy.
Far too conservative in my opinion
Business insider articles seem to follow the same pattern. Trying to drive traffic/clicks
Well said! And Well done Erin...This is why I'm subscribed!
I appreciate you!!! 🙏
This information I see is very troubling . I realize many Americans cannot see past 2 years. The need for a 10 year period of pure investment to establish a base $100k-$236,000 from 25-36 years old.. Then, the hope of appreciation over the next 29 years to reach a nest of $2 mil-$3mil...with 4% -8% withdrawal rate seems impossible. Lastly, most 20 or 30 something people are trying to establish a family, while creating a financial strategy... You'd have to be a frugal family or FIRE movement ultra strategist... Thanks for bringing up the great Retirement Myth. game breaker... 😔
So much of the financial (and other) media is a about getting people upset enough to tell their friends about this fake scenario. People need to just start saving and investing. That way the worst that can happen is you have a lot of money going into retirement. And money => options.
Completely accurate, and not really fair to lay the kind of blame/judgment seen in this thread. As a lawyer, a lot of my boomer clients went to college for a few thousand dollars, had one or two employers, have a pension (often a great one), and saw amazing stock market appreciation even with savings habits that were not that impressive. Totally different world today.
I’d argue it’s not that different. Sure colleges are more expensive & pensions are gone, but the market has been great. There’s lots of reasons for optimism that the market will boom as we’re entering a technological revolution. Focusing on investment instead of earnings will be more important moving forward.
I didn't have experts to advise me. I listened to older co-workers. Retirement planning and retirement is individualized. Advice to my 24 year old defer the max of company match. Then decide a percentage you want to save/invest. 10%, 15%, 20%, side hustle income. Pay off a house. Keep a car 7 or more years. Me, retired 17 years now at age 69. Thanks for your videos.
One negative year in equities in the past 6. All the rest have been double-digit gains. Always be buying and investing, regardless of the market conditions. Have been investing for over 30 years now. It takes years for you to feel like there is anything happening with your portfolio. Then one day, the compounding hits the boiling point and you earn more in your portfolio than you do working. It changes your perspective on life ahead. I have quit arguing with those who say they cannot get ahead and blame their situation on others. It all comes down to self discipline.
I was doing the math I had just changed my contribution to 12% with + 4% company match and even then it says by the time im 65 I would have around 2.2 mil but Taking inflation into account the buying power a month from monthly income only 4% ($7,333 a month) withdraws from the 401k would only be about $2416 in today's dollars buying power.... wich is less how much I make now and I dont feel well off I cant afford rent in nice areas or without roommates and those numbers might seem low to some of you but 2.5 mill is almost 10x what the national average has.... things are gonna get ugly and real for alot of people as they age, I need to make more and save more otherwise I will be less well off when im 65 then now
You'll also have SS though. And most people have less income in retirement. Hopefully your house is paid off by then, and if you have kids they're grown and gone by then.
Thumbnail game stepped up.
Thanks!! 🙏
Retirement is tougher than it used to be because of inflation and less pensions and possibly social security. I don't have much saved for retirement yet, but I know that if I keep dollar cost averaging, I'll put myself in a better position to retire 30 plus years from now.
People don't believe all of what you hear or read. In March 2021, I was 59 and had just $296k in my portfolio. It's 40 months later now in July 2024, and I've been managing my entire portfolio on my own with nothing more than a GED for an education. I now have $875k, and just the other week, it briefly hit $940k. You can easily turn the tables if you put your mind to it. The question is, how bad do you want it?
@Erin Talks Money. You do nice work with your videos. Wouldn't a balanced portfolio return be more accurate to project FV's? I would recommend return projections that vary over time (Glide path), but of course, we know that most individual investors will underperform the returns of their mutual finds, because so many sell low and buy high. Folks: encourage your kids to invest early in their careers...don't go just for the match...invest 20%. Study Time Value of Money and you will see why. "Money Doesn't Grow on Fees".
Erin has her head in the clouds gambling which is another word for investing is all about weighing risk, reward and upside against downside. The people today in stocks are like the fools who just hit big on a slot machine only to keep on playing the same slot machine and give it all back instead of putting the money into less risky investments like gold and long term bonds.
@@parkerbohnn What ever works for you keep at it !
My stocks ,and mutual funds are UP UP and away.
Problem with saving early...debt in beginning, college, house down payment, car. First 5 yrs get established, good habits..then start saving.
It is always worth considering inflation when setting your goal.
I’m a great saver but a terrible investor. I experimented with various investments in my 20’s and decided I didn’t understand any of it. It just all seemed like gambling. I invested conservatively after that and I probably lost most of what I made in the 2008 market crash. I’ve got a comfortable retirement now because I had some decent savings and I have a generous COLA’d pension plus Social Security (also COLA’d). I was an engineering manager so my base salary for my pension was pretty high. Finally I retired to Thailand so my cost of living is low.
Assuming a >4% return on my investments would have been a huge mistake. I am grateful for my pension. I retired at 55 in 2011.
For me, retirement is just around the corner and having @ 1 million in savings for me will be plenty since we will be getting $6000 a month in Social Security and we have no debt. I am not terribly worried.
Expense management was key for us. Not sure if debt was even mentioned.
the old live below your means while preventing lifestyle inflation and using a budget as a roadmap --- sort of implies a zero-debt mentality but it is always good to explicitly call it out.
Neighborhood Credit Unions , NCU , non- interest base can helpful , otherwise Back to Caves , Jungle ?& To awareness " Financial Fairness ?
I wonder whether older generations feel that they do not need to have as much money for retirement because they have pensions and Social Security (or expect to have them) the whole time. Also, student loan debt and the housing market are pushing major life events and purchases futureward for a lot of younger people, meaning that they may need to pay for those expenses in early retirement, meaning that they need extra money saved up. But none of that explains why younger generations are not matching Millennial estimates.
It probably depends on the person, some people find a lofty goal like that motivating, some find it de-motivating. So I don't know if it's a good idea or not to point out that the expectations are much higher than they'll likely need in reality. It's popular in personal finance circles to ignore Social Security, but you're just flat wrong if you think it's going to go away completely. I think the most likely scenario is that there will be some combination of changes to the tax, the funding structure, and the COLAs to avoid any outright cuts...at most the benefits may drop in inflation-adjusted terms.
Also, most people just don't have a good sense of what their expenses in retirement are going to look like, especially if they have kids. We (40 & 39) have four of them and if we based our projected retirement expenses on what we spend now, we'd also feel like we could never retire. But in 15 years, the kids will (hopefully) be well out of the house and self sufficient and the mortgage will be just about gone. Even if all of that only cuts our current expenses by half, then our projected SS benefit at 67 in today's dollars will cover us entirely. And that's not to mention we have about 2.5x income saved for retirement...a little behind according to Fidelity's benchmark, but we didn't really get serious about it until about 5 years ago. Live below your means, people!
In 2006, NVDA was trading at and equivalent of 87 cents a share. (Don't make me do the stock split math, it just makes the example harder to understand). Last week it hit 1200 dollars a share. Or, if you invested a mere 1000 dollars in NVDA in 2006, you would have a nice start on a nest-egg today (about 1.4 Million dollars).
They key has always been invest while young, and let the market work for you. Once you get old, put the money in something stable, like bonds. This way market dips and crashes can't ruin your retirement plans.
It is better to do something, even if it is small, than doing nothing.
Great video - love your content. Thank you!
Thanks for watching!
Getting a bit of a late start can be overcome. I'd worked at a family business until I was 35 (good memories, no money) and had zero saved for retirement. I just retired a couple days ago, not quite 30 years after having zero saved/invested. Our retirement investments are over $2M, zero debt, total net worth somewhere around $3.5M. You can do it. We didn't do anything fancy, just lived below our means and invested our money in boring broad market index funds. No get rich quick schemes, no "magic" advisors being shilled in TH-cam video comments. And we even did it while buying fancy coffees when we felt like it ;) Yes, I did have a good paying job but nothing extraordinary. In fact it would be considered a very so-so income in a high cost of living area. Our trick is we don't live in a high cost of living area.
All I can say is the best time to have invested in a retirement account was when you were 20. The second best time is now. I regret not starting earlier. I didn't start until age 32. My wife and I have three employer sponsored retirement accounts and I won't stop working until I hit age 70.
That’s not realistic and try traveling and enjoying life in your 70’s as opposed to your 60’s or even 50’s.
@@dantheman6607 Why isn't it realistic? 70 is young. I turn 60 next year and I am in the prime of my life. With people living longer I want to make sure that I have the most bang for my buck in retirement. Of course If I had started investing earlier then yes, I could have an earlier exit plan, if I had wanted one. Since I started later I am honed in on what I have to do as opposed to what I could have done. I am fine with that.
I have 20 years to go for retirement. Everything you said is rock solid.
36 year old says she started saving late and shes been investing for the past 10 years. So saving at age 26 is late?
Training my kid for coast FI. They put 25% directly into 401k and ROTH from their job. Welcome to live with us until marriage rent free as long as 25% is going to retirement. Happy to pay their car insurance on Used Hoopty cars only!!
I have a solid job at KFC! My wife and kids are still worried though.
Lots of free chicken at the end of the night!
@@MrSteeDoo and leftover fries!
Great, well-presented video as we can expect from Erin. Most retirement calculators are useless IMO as they are based on inputted assumptions from the user. The user can then use the calculator to depress his or herself or provide false comfort, whichever his or her objective is at the time. The subject investor is well head of the game at 28 and has little to worry about if she stays on track IMO. I believe most millennials will be fine because they understand the need to save and invest for their future and, as Erin mentioned, have sufficient time to do so. Some Gen Xrs, on the other hand, may be in trouble. The need to save and invest on your own for retirement was not instilled upon most Gen Xrs because our grandparents lived, and to an lesser extent, our parents live well in retirement on pensions and social security. Pensions are mostly gone and the SS cannot be counted upon. Due to this, some of the particularly later Gen Xrs are likely to struggle in retirement because, upon realizing this, they do not have the time to make up the difference. My thoughts anyway.
Just some friendly feedback.
I'm a big fan of your content and appreciate the value that you are sharing!
The new typing sound effects however are kind of distracting for me.
That said, thank you for enriching everyone's financial journey!
Things might get so bad that young people will have to skip getting that next tattoo! Oh the humanity!
But what about piercings and rings? Gotta have 2 in your nose and 6 on your hands.
@7SideWays how about gourmet coffees??? Lmao
Isn't a 4% ROI the average for retail investors? Pretty sure that's where the example in the article comes from.
Millennial here (41): $850k saved on a nearly 6-figure salary. I save ~50% of my gross salary; lowest year was 20% savings rate. Plan on retiring at 50, 55 at latest.
The vast majority of millennials deserve to never be able the retire since many of them that I see earn more than me and have no savings. It's self induced and you reap what you sow.
You mean getting that sleeve tattoo is not a good investment? Oh man!
When financial experts talk about a specific savings %, is this from your gross income or net income? Or it doesn’t matter? Thank you.
There are a lot of jobs in our country to make a great living. People need to be realistic and there's nothing wrong with starting at the bottom. Stop comparing yourself to those you see in social media.
I'm a Xennial, and believe I will be able to retire. I also though work in tech and so have a larger than average income, and have been able to save, and increased my 401k savings rate when I would get a raise. Not everyone can even say that they get raises in the past 20 years though.
“Late start at 36 working for 10 years with 280k” try 36 with 10k saved up…4% is low at least it’s not 12% cloud nine Dave Ramsey uses.
4% rate of return is ridiculous
Dont give up. Save, save, save. It'll be ok
People need to factor in inflation! Gen Z will need to shoot for about 2 million at least. With a 4% withdrawal 80k sounds good but remember that 80k could look like 32k in terms of what it will feel like in today's money. Also keep in mind that social security is VERY unknown at the moment and mathematically will run out before then.
"Nobody knows what will happen in the next 30 years."
I've been in my career for 33 years. So, looking back, I can remember that same mindset. Yet amazingly, it ended up almost exactly what I predicted.
The average rate of return over the previous 30 years was pretty close to what we've seen over the last 30 years. Inflation was pretty close to estimates, even with fluctuations. That means the spreadsheets I developed in my 20s was pretty close to where I am in my 50s..
My point is that going with historical data is not a bad way to plan. It should get you in the ballpark.
I'm in my 60s. I still don't know how much I need for retirement.
What will the inflation rate be?
What kind of return will I actually get on my investments?
Will Social Security continue to be available?
Will taxes go up? By how much?
Will the government's addiction to debt finally come back to bite us?
Will the government decide to tax unrealized gains in retirement accounts?
I could go on, but you get the idea. I may live another 30 years. A lot can happen in 30 years.
@@rexstrom5362 i guess the old adage of know what you can control to me is valid & your first sentence is of course concerning:
I still don't know how much I need for retirement.
I just do the best to project individual categories and add to them using some planning software (derived from my own spreadsheets) so i smooth out the bumpy expense ride
started late in saving (40's) but in mid-70's & retired for 5 years --- worked so far .... my reality is still better than my projections.
i'm here because i just like Erin & i can rethink of my other plans while confirming her insights....
Good luck 💪🤞👍
I know the world will turn communist under one world leader. Russia will play a prominent role in the next 30 years. Putin is the focal point in time as Russia will continue to take each country one by one.
I retired two days ago (56) and I still don’t know how much I will need for retirement.
We could play the what if game forever but I know that because I did the legwork early on and let compounding do it’s job that I will be fine. Start investing early, increase investment rate yearly, and be patient. I do have a pension but my additional investments over the years give me comfort knowing I can withstand whatever the market throws at me in the future.
4% return is not too conservative. 7% return minus 3% inflation?
Not me freaking out earlier thinking I won't have enough saved for retirement as a 30 year old with 1x income saved in investments.... Im choosing not to save as much as I could this year, but I don't think I'll feel safe until I reach CoastFI... projections say my fear is irrational.
1.6 million likely won't be enough for many Millennials at retirement age.
Almost certainly not. That’s a safe withdrawal income of $64K which is not enough to live on without a paid-off home. 20 years from now, there’s a good chance that will be poverty level.
It's about $1.58888 Million more than 99.4% of Americans have at any age.
It might well be meant as 1.6 million is needed in today's money, you'd need to increase it based on future inflation
Especially if they vote for another 4 years of "Bidenomics". 4 more years of 'Building back better' will likely require a 4 to 5 million retirement savings.
@@Ryhm14 Still not enough unless you’re in a paid-off house. I doubt millennials will have that if they’re struggling to save.
Millionaire status isn’t retirement anymore. I’d put a comfortable retirement closer to $3M. Less is probably doable but your geographic options would be limited.
Why just 4%? A conservative number is more like 8% for the S&P500
But but but we gotta go to Disney at LEAST twice a year dropping 12k in the process !! And we NEED that $125k Cadillac Escalade !!! And the best one is “ We spent $100k on the wedding and went to Australia for two months “
you know a lot of people with much more expensive taste than i do.
Well, that's not true. Most people can't work until they die. The question is, what does retirement look like for you?
Opened a Roth IRA for my two teenagers and have been maxing out the contributions into their account.
They know theirs an account BUT think it only has what they contribute into it.
Disregard if you have parents that saved.
Erin, do you have a way for subscribers to suggest topics for future videos?
P.S. Another great video (that's why I always click the thumbs up button). Why are only 1 in 15 doing so?!!!
Sure, leave the suggestions in a comment here or shoot me an email at erintalksmoney@gmail.com 😊
I always appreciate suggestions
Dang that one earring looks like it was painful to get
Not really , since it simply clips on 😂 not actually pierced!
Be aggressive!! As always time and compounding is your friend!
Some smart person once said, the most important investment you make in life is your partner, choose wisely, your partner can make or break you
Let's not forget that the entire concept of "retirement" started in the early 1900s, and 1935 in the US. And when the social security program was created in the US, average lifespan aligned such that on average, people never even received a social security check becuse they were dead by the time the "retirement age" came to fruition.
If you feel like you're never going to retire--don't worry--you're on par with pretty much everyone in history.
Proud to be a young millenial that will at least increase the number of millenials that will reasonably retire by 1 😅
They will never retire if they don’t start investing long term asap and stay consistent
Wars, boarder failures, covid Scare/control, economy/inflation etc.. yes, plan on "Biden" type years/terms off and on. There so many variables. Save, live within your means. Below your means.
What’s wrong with your “boarder”? maybe your boarder knows how to spell better than you do.
Another magat on someone's payroll to post propaganda for the convicted felon.
But you can’t make good clickbait if you don’t fudge the numbers to meet the story you want to tell. Shame on BI - again.
Running out of time running out of health
Does Erin have any financial training?
None, she just goes with trends which are in actual fact ponzi's with no fundamentals whatsoever. Telling people to put money into the U.S. stock market when its the most overvalued in all of history might work short term but long term it ends up in tears just like how every ponzi in history has ended. Gold and long term bonds is where to put money not in U.S. stocks.
@@parkerbohnn be better if she was in a bikini while talking
Stop eating out every week.Buy good used vehicles.Stop justifying why you deserve an expensive vacation every year.Buy the house you would rather not own and tough it out and work your way up,call it making sacrifices.It works.
These kids as I call them in their 20s and 30s worried about retirement cracks me up, enjoy life be more concerned about buying a house finding a spouse raising a family, in the meantime keep dropping into your 401k at least the minimum to get a full match and before you know it you can really plow $$$$ into it in your late 40s to early 60s!
Putting away 1,500 (at 10% return rate) or 10,500 (at inflation adjusted 7% rate) yields $1M over 65 yrs.
So, put a few $$$ away for each of your kids at birth. Time is on their sides!
A=A0 exp(rt)
It's because Business Insider is a crap publication.
I had first like!
Yay! Thank you! 😊
That article sounds AI generated.
Millennials will inherit wealth! I think most of them know this.
👀
yeah the rich ones
🙄
That is not true at all. The average Millennial will inherit massive debt from their parents who took on enormous debt they couldn't afford in order to look "wealthy."
Spend it all, then. Make them earn their wealth from the ground up, like many people have done.
Boomers retiring today need about the same 1.7 million and much more if you're married. Millennial's will need to work until they die if they're renters due to rents costing more than people earn working. I live in Canada where the cost of living is much higher than in America and we earn much less but pay more in taxes.
Don't vote for Trudeau then
@@MeltingRubberZ28 I'm willing to bet Trudeau was (s)elected like Biden was. By the 1% not the 99.
You don't earn less.
A study by NW Mutual... Is their conclusion that millennials need whole life insurance to supplement retirement savings? 😂
No one needs whole life insurance.