The chart you included is slightly misleading, as it only captures accounts managed by Fidelity. It doesn’t capture 401k, IRA and other defined contribution (e.g. 403b) accounts managed by Vanguard, Schwab, TD Ameritrade, the Thrift Savings Plan, etc.
You’re right; it’s not. The Yahoo version of the article was a little misleading. The WAPO version made it more clear it was limited to Fidelity plans.
So I assume VG has at least Fidelity-like numbers and then there are smaller players.
Even extrapolating from the Fidelity numbers using rough guesstimates, seems there aren’t a lot of Americans with 7 digits in their 401k.
One of my buddies runs the annual American finance report for one of the big 4. He always sends me a free copy where you can segregate by age/education/savings type etc etc. it’s very depressing to look at (especially for the older gen x types).
Millennials are actually doing a pretty good job stowing away cash (probably from habits learned while living at home with their parents 2008-2011ish). Gen x though...woof. Hard to envision how many of them will ever be able to retire
In your estimation, what should a Gen X-er about 8 years from retirement have in retirement investments? Is it fair to include the lump sum value of a pension benefit?
Yes—id include that for sure. Everyone’s situation is unique, so I don’t want to name a number (and to be honest I don’t know enough about it for your age group, I’ve only really given it thought for my own age range which is completely different, since I don’t think we will have SS to dependably rely on) but I would assume you’re in good shape, esp in comparison to your peers.
When I say woof about gen x, I’m talking how 35% of 50 year olds have
I struggle with the number. I am aiming at $5 to $6M in investments. House is paid; will finance construction of the lake place in the next year or so. Stand to inherit some money/property. Kids college is done and they have no debt. Two more weddings and I’m free.
Goal is to live off investment returns and leave the corpus to my kids. Will likely rent the Seattle place out when I pull up stakes. Want to keep my foothold in Seattle because I’m convinced long-term it’s gong to be a hard place to move back to if you left the market.
This is far and above what 90% of America ever aspires to. 5-6M is still serious money. We have been conditioned to think that everyone has Bentley's and shit now. They don't. Sure, the top 10% live very well in this country, but for the most part most people are still working poor.
I have a good friend who is well placed at Fidelity and manages a portion of their "asset management" business for top 10%'ers. I asked him to run some numbers for me.
I said how much money do I need to maintain a 100K per year lifestyle (that is actually pretty modest) in retirement. I was mid-40s at the tim, and I told him to expect a retirement cap at 60. The 100K per year was in today's (2018) dollars, and he could adjust that for inflation so the figures would make sense 15 years in the future (2033). I also told him to do it based on index funds. He crunches numbers for awhile, asks some questions, and says 3M, assuming no mortgage and no major debts (student loans for kids, etc.). So then we run the calculation for me specifically, as I have that glorious military retirement, and it cut the amount I need to save down to 1.2M - to live that same 100K a year lifestyle. Huge difference.
100K a year might sound like a bunch to some people, but my property taxes alone eat the first 8K of that, throw in cable, phone, other normal bullshit and I probably start the year down 20K of that 100K before I have purchased one item of food, powered my house, bought a tank of gas, taken a trip, or done any home repairs/upgrades. Or bought a new car. Or anything else. To me a 100K per year retirement is a modest, but very comfortable, retirement (provided you are mortgage free which is my focus right now). You aren't driving a Bentley and wintering in Monaco, but you have plenty of money for a few small trips a year and to eat out as much as you want.
The point I am making is 5-6M is over a 200K per year retirement I assume (I no gud at maff), which is beyond a comfortable retirement. You will love life. Goddamn swarthy Cubans.
So I axed my buddy what percentage of Americans are going to retire with that 3M and no mortgage figure to have a comfy but not outlandish retirement. He laughed. Less than 5% was his very serious answer. I think social media sometimes makes us think everyone is Park Avenue rich, but it just ain't so. I could be wrong of course, but I'm not usually wrong.
Also thanks to everyone on this bored. You paid for me to blow up terrorists all those years, and now you are paying me to only need 40% of what everyone else needs for a nice retirement. 1.2M and a paid for house seems super doable. Hell I'm aiming for 1.8M just to have some extra to hit the strip clubs when I'm 70.
My number has always been 2M, which seemed like a pipe dream 30 years ago. But, once you start seriously saving, it snowballs in a hurry. Now, thanks to the Swaye ‘blowing up terrorists’ retirement plan, I don’t need to really touch those assets. Having medical included with my retirement is huge. Something I didn’t appreciate when I was 17 but understand completely now that I’m 55.
Good point about medical. Question: how does it differ from Medicare? I know you have to pay some amount for additional coverage, but from everyone I've talked to about it, the coverage is fantastic and it's not expensive to get Part B, or whatever it is you need to get that is beyond the basic coverage.
Tricare is my primary insurance until I’m 65 when Medicare, (by law?), becomes the primary insurance. I’ll still have Tricare as secondary coverage which, from what I’ve read about Medicare coverage, will be needed.
Two most important words we should be teaching our kids in school when it comes to finance is compound interest. Earlier it starts better it does for you.
I was born/raised/still live in Lewis County, but for some very fortunate reason loved finances and the stock market so started investing in my early 20's.
Both wife and I have contributed to our 401k's last 25 years and today, what we put in along with the match is minute compared to what the market does for our total. Even if it only goes up 5% in a year, that's double what we will contribute and make during that same time frame.
Congrats Creepy your 5-6 million portfolio puts you in the top 1/2 of 1% of household wealth in America (680,000 out of 116,000,000)
Two most important words we should be teaching our kids in school when it comes to finance is compound interest. Earlier it starts better it does for you.
I was born/raised/still live in Lewis County, but for some very fortunate reason loved finances and the stock market so started investing in my early 20's.
Both wife and I have contributed to our 401k's last 25 years and today, what we put in along with the match is minute compared to what the market does for our total. Even if it only goes up 5% in a year, that's double what we will contribute and make during that same time frame.
Congrats Creepy your 5-6 million portfolio puts you in the top 1/2 of 1% of household wealth in America (680,000 out of 116,000,000)
Well, I'm not there yet. But unless something goes wrong, I should be at or close to 6. I have always assumed the rule of 20 before calling it a day ... of course as my base salary has increased, that target has moved further out. And despite the shit talk, I should inherit some money from the old man. Not quite sure how that's going to work out ... taking a trip at the end of the month to help him with his private equity "liquidity event". It should come up organically at that time. Otherwise I'll present him with a nice bill for services rendered. Joking. Not joking.
Part of what I've been driving towards is to leave the kids something. A fully funded undergraduate education (check), some money for a house down payment (1 out of 3, check), a wedding (1 out of 3, check, and it was a really nice one), and we (hopefully) live off of the earnings from the assets. I didn't have a Seattle tech. liquidity event. In the tortoise and hare story, I've been the slow guy, which is fine, except when you live in Seattle, a lot of hares actually win the race a lot earlier.
Two most important words we should be teaching our kids in school when it comes to finance is compound interest. Earlier it starts better it does for you.
I was born/raised/still live in Lewis County, but for some very fortunate reason loved finances and the stock market so started investing in my early 20's.
Both wife and I have contributed to our 401k's last 25 years and today, what we put in along with the match is minute compared to what the market does for our total. Even if it only goes up 5% in a year, that's double what we will contribute and make during that same time frame.
Congrats Creepy your 5-6 million portfolio puts you in the top 1/2 of 1% of household wealth in America (680,000 out of 116,000,000)
Re compounded returns ... we were just discussing that in Casa de Creep the other day. It is criminal how few Americans understand what is truly basic arithmetic.
Two most important words we should be teaching our kids in school when it comes to finance is compound interest. Earlier it starts better it does for you.
I was born/raised/still live in Lewis County, but for some very fortunate reason loved finances and the stock market so started investing in my early 20's.
Both wife and I have contributed to our 401k's last 25 years and today, what we put in along with the match is minute compared to what the market does for our total. Even if it only goes up 5% in a year, that's double what we will contribute and make during that same time frame.
Congrats Creepy your 5-6 million portfolio puts you in the top 1/2 of 1% of household wealth in America (680,000 out of 116,000,000)
Re compounded returns ... we were just discussing that in Casa de Creep the other day. It is criminal how few Americans understand what is truly basic arithmetic.
This X100. My junior year of high school my American History teacher spent a week on personal finance and the benefit of investing early to take advantage of compound interest. It was one of the more valuable lessons I learned from a teacher. It should be required curriculum in all schools. I really don’t understand why it’s not. Schools teach kids about everything else, but such an important topic is given no structured education unless a teacher takes it upon himself to provide it. It would be so helpful for so many kids who don’t get those lessons at home.
The chart you included is slightly misleading, as it only captures accounts managed by Fidelity. It doesn’t capture 401k, IRA and other defined contribution (e.g. 403b) accounts managed by Vanguard, Schwab, TD Ameritrade, the Thrift Savings Plan, etc.
You’re right; it’s not. The Yahoo version of the article was a little misleading. The WAPO version made it more clear it was limited to Fidelity plans.
So I assume VG has at least Fidelity-like numbers and then there are smaller players.
Even extrapolating from the Fidelity numbers using rough guesstimates, seems there aren’t a lot of Americans with 7 digits in their 401k.
One of my buddies runs the annual American finance report for one of the big 4. He always sends me a free copy where you can segregate by age/education/savings type etc etc. it’s very depressing to look at (especially for the older gen x types).
Millennials are actually doing a pretty good job stowing away cash (probably from habits learned while living at home with their parents 2008-2011ish). Gen x though...woof. Hard to envision how many of them will ever be able to retire
In your estimation, what should a Gen X-er about 8 years from retirement have in retirement investments? Is it fair to include the lump sum value of a pension benefit?
Yes—id include that for sure. Everyone’s situation is unique, so I don’t want to name a number (and to be honest I don’t know enough about it for your age group, I’ve only really given it thought for my own age range which is completely different, since I don’t think we will have SS to dependably rely on) but I would assume you’re in good shape, esp in comparison to your peers.
When I say woof about gen x, I’m talking how 35% of 50 year olds have
I struggle with the number. I am aiming at $5 to $6M in investments. House is paid; will finance construction of the lake place in the next year or so. Stand to inherit some money/property. Kids college is done and they have no debt. Two more weddings and I’m free.
Goal is to live off investment returns and leave the corpus to my kids. Will likely rent the Seattle place out when I pull up stakes. Want to keep my foothold in Seattle because I’m convinced long-term it’s gong to be a hard place to move back to if you left the market.
The middle class is very much a 20th Century phenomenon, long in decline. Probably wouldn’t have happened at all without massive disruptions, e.g., two world wars. If you want a middle class you actually have to enact policies to support it. It doesn’t just spring organically from capitalism.
The middle class is very much a 20th Century phenomenon, long in decline. Probably wouldn’t have happened at all without massive disruptions, e.g., two world wars. If you want a middle class you actually have to enact policies to support it. It doesn’t just spring organically from capitalism.
I guess it's how you define middle class. Thought of as a broad intellectual concept, I'd argue it's still there, but we're at a time when we're pushing a lot of people who might have been thought of as middle class down into the lower class. My in-laws are a good example of that. He was a union carpenter and foreman on big projects, and she was an admin. at Rayonier. Both had pensions, etc. Bought a house and retired owning it, raised their daughters, moved to a place on the Sound, and lived a good life. Those same two people would struggle today with those jobs and that level of education.
But for every one of them, there is a kid learning to code, or working in mid-tier finance, or mid-tier law, or a 1,000 other professional or semi-professional jobs, who will make a good living but are not going to be super wealthy by any stretch. Those people will live economically maybe just slightly better than my in-laws, and most of the "better" part will be because a lot of things are relatively cheaper and more accessible than they were during their heyday. Vacations, for example. When I was a kid in the 70s and 80s, only very well-to-do people jumped on a plane to take a vacation with any regularity. It wasn't an every year thing. It is now because it's fucking cheap relative to income.
I think in a lot of ways there is still a middle class. The way the two classes live is different, but I feel like there is a decent chunk of people in the middle. My old neighborhood in Bothell was full of them. The Boeing engineer ... has a nice 3,300 or so sq. foot house in a nicer Lozier neighborhood built around 2000. I remember one summer they had to choose between having the house painted or getting a $4,000 surgery for their dog. I was fortunate in that I could have said, "why not bofe?"
My in-laws would have faced the same dilemma, except my FIL would never have hired someone to paint his house ... he did it.
I know there are people and communities left behind. But I also think in real-life there are a shit-ton of people in the middle. Their lives just look different than the old middle class. In some ways better; in some ways worse.
Two most important words we should be teaching our kids in school when it comes to finance is compound interest. Earlier it starts better it does for you.
I was born/raised/still live in Lewis County, but for some very fortunate reason loved finances and the stock market so started investing in my early 20's.
Both wife and I have contributed to our 401k's last 25 years and today, what we put in along with the match is minute compared to what the market does for our total. Even if it only goes up 5% in a year, that's double what we will contribute and make during that same time frame.
Congrats Creepy your 5-6 million portfolio puts you in the top 1/2 of 1% of household wealth in America (680,000 out of 116,000,000)
Well, I'm not there yet. But unless something goes wrong, I should be at or close to 6. I have always assumed the rule of 20 before calling it a day ... of course as my base salary has increased, that target has moved further out. And despite the shit talk, I should inherit some money from the old man. Not quite sure how that's going to work out ... taking a trip at the end of the month to help him with his private equity "liquidity event". It should come up organically at that time. Otherwise I'll present him with a nice bill for services rendered. Joking. Not joking.
Part of what I've been driving towards is to leave the kids something. A fully funded undergraduate education (check), some money for a house down payment (1 out of 3, check), a wedding (1 out of 3, check, and it was a really nice one), and we (hopefully) live off of the earnings from the assets. I didn't have a Seattle tech. liquidity event. In the tortoise and hare story, I've been the slow guy, which is fine, except when you live in Seattle, a lot of hares actually win the race a lot earlier.
Our paths and goals couldn't be more aligned. I should be anywhere from 5.8 to 6.8 including the equity in my home by 56. The rudimentary plan is to have 2-3mm in conservative investments, hopefully generate about 100k annually and also pull 100k annually from the univested 3-4mm and by the time I'm dead leave 1mm to each of 3 children. I actually have competing advisors work out that plan. Maybe it turns out that I can't spend $200k a year in rerirement which won't crush me. Neither my wife or I inherited anything so I feel a great need to do that for my children. My dad was a fortune 500 executive who wasn't in the market and didn't have any life insurance. He spent his rerirement on my sister's dream which failed. I'm proud that I built and accomplished most everything on my own and my children were lucky to have a stay at home mom their entire upbringing.
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Almost half of Americans pay no Federal income tax.
Meanwhile, back in the Club, we be like:
I was born/raised/still live in Lewis County, but for some very fortunate reason loved finances and the stock market so started investing in my early 20's.
Both wife and I have contributed to our 401k's last 25 years and today, what we put in along with the match is minute compared to what the market does for our total. Even if it only goes up 5% in a year, that's double what we will contribute and make during that same time frame.
Congrats Creepy your 5-6 million portfolio puts you in the top 1/2 of 1% of household wealth in America (680,000 out of 116,000,000)
Part of what I've been driving towards is to leave the kids something. A fully funded undergraduate education (check), some money for a house down payment (1 out of 3, check), a wedding (1 out of 3, check, and it was a really nice one), and we (hopefully) live off of the earnings from the assets. I didn't have a Seattle tech. liquidity event. In the tortoise and hare story, I've been the slow guy, which is fine, except when you live in Seattle, a lot of hares actually win the race a lot earlier.
The middle class is very much a 20th Century phenomenon, long in decline. Probably wouldn’t have happened at all without massive disruptions, e.g., two world wars. If you want a middle class you actually have to enact policies to support it. It doesn’t just spring organically from capitalism.
But for every one of them, there is a kid learning to code, or working in mid-tier finance, or mid-tier law, or a 1,000 other professional or semi-professional jobs, who will make a good living but are not going to be super wealthy by any stretch. Those people will live economically maybe just slightly better than my in-laws, and most of the "better" part will be because a lot of things are relatively cheaper and more accessible than they were during their heyday. Vacations, for example. When I was a kid in the 70s and 80s, only very well-to-do people jumped on a plane to take a vacation with any regularity. It wasn't an every year thing. It is now because it's fucking cheap relative to income.
I think in a lot of ways there is still a middle class. The way the two classes live is different, but I feel like there is a decent chunk of people in the middle. My old neighborhood in Bothell was full of them. The Boeing engineer ... has a nice 3,300 or so sq. foot house in a nicer Lozier neighborhood built around 2000. I remember one summer they had to choose between having the house painted or getting a $4,000 surgery for their dog. I was fortunate in that I could have said, "why not bofe?"
My in-laws would have faced the same dilemma, except my FIL would never have hired someone to paint his house ... he did it.
I know there are people and communities left behind. But I also think in real-life there are a shit-ton of people in the middle. Their lives just look different than the old middle class. In some ways better; in some ways worse.