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Message
re: 50% of millennials think they need $300,000 or less to retire in comfort
Posted on 8/16/21 at 3:05 pm to Mingo Was His NameO
Posted on 8/16/21 at 3:05 pm to Mingo Was His NameO
quote:
90% of Americans live on less than this before taxes. You may need that to sustain your lifestyle, but acting like that is the figure the aver ge American needs to retire is out of touch.
Never said the average person needed that, just provided our example. Point still is, if you try and live on $3k-$4k/mo, even with no house payment, that's not much a retirement for 2 people other than getting by mostly. If thats all you want, that's fine, but I would venture most people picture their retirement a bit differently, point being just dont know how to plan for that and people think they need way less to retire on than the numbers for their retirement would suggest.
I man the fact half of millennials think $300k for retirement is ok should scare the crap out of you. We're talking people already retired or close to it (boomers) believing they need more than double that, and these are the people who likely had a fighting chance to supplement a 401k or IRA with a pension because of when they worked. Millennials, very very few will have had access to a pension plan. So their retirement is pretty much entirely in SS, 401k/IRA. Yet these people, 30-35 years younger than the boomer generation, think in 30-35 years from now when they are retiring in masses, need way less (frightening when you consider inflation and such). That's a bad sign.
This post was edited on 8/16/21 at 3:11 pm
1
Posted on 8/16/21 at 3:09 pm to thunderbird1100
quote:
Point still is, if you try and live on $3k-$4k/mo, even with no house payment, that's not much a retirement for 2 people other than getting by mostly.
Most people live on this with a mortgage and kids in the house. I would bet most Americans would love to have that monthly income without a mortgage and empty nesting
Posted on 8/16/21 at 3:20 pm to ronricks
quote:
Baby Boomers are going to transfer the largest intergenerational wealth transfer in history will pass down over $30 trillion in inheritance from baby boomers to millennials and Generation X across the next few decades. Millennials will be fine.
I do think this is a big factor a lot of people dont think about. For example my wife and I's parents are both sitting on at least $2M in assets, and we're both only children (but we're not "Counting" on that at all). Our parents are all about 70-ish. Now certainly thats not "average" either but there's a reason these really nice retirement communities have popped up everywhere the last decade plus, that generation has money to really spend and enjoy retirement overall.
I will say this though, pensions arent transferring down, so it will be more expensive real estate than anything IMO that gets passed down. A lot of that generation didnt have to do much retirement investing outside their 401k/IRAs due to the sweet pensions they got. Now certainly many still did invest on the side of a pension, but even the pension helps them pass down nice real estate, especially with how housing prices have exploded.
Posted on 8/16/21 at 3:22 pm to pioneerbasketball
I’m a young millennial and looking for $3M in today dollars (not adjusting for inflation 30 years from now). The older millennials are the really stupid ones and the ones that make us all look bad
Posted on 8/16/21 at 3:36 pm to pioneerbasketball
If your house is paid off and you live a simple life, retiring at 65 with $300k gives you 1250/m to age 85, and that's assuming no interest/growth on the 300k during that 20 year period. Plus Social Security and Medicare. You won't be a world traveler but you'll have a roof over your head, food on the table, and most medical covered. And if something unforseen happens, you can reverse mortgage the paid-off house to help out. Not ideal, but could be done. It would be the minimum. And let's face it, if you find yourself at age 64 with only $300k, it's not like working another 4 or 5 years is going to get you to much more comfortable levels. You've kinda already "lost" at that point.
That being said- I intend to retire with however much I have at age 59-1/2. I'm on track for around $1m. I hope $1m is still worth something at that time.
That being said- I intend to retire with however much I have at age 59-1/2. I'm on track for around $1m. I hope $1m is still worth something at that time.
This post was edited on 8/16/21 at 3:39 pm
Posted on 8/16/21 at 3:40 pm to Mingo Was His NameO
quote:
Most people live on this with a mortgage and kids in the house. I would bet most Americans would love to have that monthly income without a mortgage and empty nesting
The median household income in the country is $70k/yr. Which is definitely way more than $3k-$4k/mo. Especially if we're talking that $3k-$4k/mo is PRE-tax income for $36k-$48k income.
So I definitely wouldnt say "most people live on this". Most households definitely live on more.
Also again, my point was more towards a retirement you picture yourself having. Most people arent picturing a retirement where $3k a month funds all that. It's more just getting by than anything considering all the constant expenses you'll still always have like prop tax, insurances, home repairs/improvements, vehicles, etc...these are unavoidable for the most part and significant expenses. $3k-$4k is obviously more than enough to keep you out of poverty level but my point is it's not much to do much with either. It's simply not a retirement most "want", if that makes sense.
This post was edited on 8/16/21 at 3:42 pm
Posted on 8/16/21 at 3:52 pm to thunderbird1100
quote:
The median household income in the country is $70k/yr. Which is definitely way more than $3k-$4k/mo.
No, it is not.
quote:
Especially if we're talking that $3k-$4k/mo is PRE-tax income for $36k-$48k income.
No one is talking that
quote:
$3k-$4k is obviously more than enough to keep you out of poverty level but my point is it's not much to do much with either. It's simply not a retirement most "want", if that makes sense.
I agree that it would not allow you to live lavishly. But you will be more than covering expenses and can have a nice retirement on $4k/mo. You can take several vacations a year on that.
Posted on 8/16/21 at 3:56 pm to deeprig9
quote:
That being said- I intend to retire with however much I have at age 59-1/2.
I feel like too many people look at retirement as an age. Retirement is not an age, it’s a financial state.
quote:
I'm on track for around $1m. I hope $1m is still worth something at that time.
Good luck.
Posted on 8/16/21 at 4:01 pm to PhiTiger1764
quote:
No, it is not.
$70k is way more than $36k...pre or post tax. It's also way more than $48k pre-tax. Also depending on what state you live in, $70k pretax is quite a bit more than $48k post tax - ex FL, where your tax bill is about $10k, in GA where I am it's still only takes you down to to like $57k, still a good chunk more than $48k.
quote:
No one is talking that
I literally was from the start
One of my first example that kind of started all this was someone living on a little under $3k S.S. and a $350k pre-tax investment account. That's all pre-tax money. quote:
I agree that it would not allow you to live lavishly. But you will be more than covering expenses and can have a nice retirement on $4k/mo. You can take several vacations a year on that.
I mean it's not all black and white here. You're not "living lavishly" on $5k/mo in retirement in many places. I do agree in some places you can at least do something with $4k/mo, but $3k mo, again consistent expenses will eat heavily into that.
This post was edited on 8/16/21 at 4:05 pm
Posted on 8/16/21 at 4:04 pm to thunderbird1100
quote:
It's simply not a retirement most "want", if that makes sense.
Well yeah, I'd like to get about 50k a month in retirement if I can, but I also live in reality.
Posted on 8/16/21 at 4:06 pm to Mingo Was His NameO
quote:
Well yeah, I'd like to get about 50k a month in retirement if I can, but I also live in reality.
Obviously talking about realistic wants. People just didnt financially plan for them.
Going back to "most" households already live on $36k-$48k/yr income, that's simply not true unless you're talking individuals. Median household income is $70k. you're still above poverty level at that level of income, but it's certainly not exactly much extra money after typical expenses, more so the $3k point than $4k point.
This post was edited on 8/16/21 at 4:10 pm
Posted on 8/16/21 at 4:38 pm to Mingo Was His NameO
quote:Or leave it all to our cats because we're fed up with listening to you bitch about us.
Unless they spend it all on Healthcare which is entirely possible
Posted on 8/16/21 at 4:43 pm to thunderbird1100
quote:
The only odd thing here is Gen Z is right up there with Gen X, otherwise the trend was pretty clearly the older the generation the more they think they need to retire
Or it could be unlike the boomers with the millennials, Generation X actually taught their children about money.
Posted on 8/16/21 at 4:46 pm to pioneerbasketball
If they live in tiny homes and eat grass, sure.
Posted on 8/16/21 at 5:01 pm to pioneerbasketball
HAHAHAHA!!!
I tell my students 1.5 million is a good starting point.
Thanks for more ammo
I tell my students 1.5 million is a good starting point.
Thanks for more ammo
Posted on 8/16/21 at 5:24 pm to pioneerbasketball
if they're saving in fiat: ngmi
if they're saving in Bitcoin: gmi
if they're saving in Bitcoin: gmi
Posted on 8/16/21 at 6:03 pm to kywildcatfanone
For the record 70k would be around 5100 a month after taxes based on someone living in Louisiana. A 70k income after standard deduction puts you at 45k taxable which is in 12% federal bracket and 6% state income tax bracket. I could make 5k a month work easily with a paid off home and be able to have a few domestic trips a year or probably only one international trip. Assuming you had to get healthcare on the exchange you’re probably looking a 1k monthly premium for health insurance for a so-so plan. So leaves you 4k for your basic bills and any other medical needs. So with your 4K/month you could have a couple who buys civics and keeps them for 10 years (20k each so for 2 cars 40k every 10 years) compared to a couple who wants new infinities every 10 years (50k each so for 2 cars 100k every 10 years). Take those same two couples who the first might have a house valued at 200k which has less property taxes, insurance, and utility bills compared to the other couple that has a 400k house that has higher costs associated with it. If you have the first couples life then you can afford the travel much more than your second couple. There’s too many variables to generalize what constitutes as a good or bad retirement.
This post was edited on 8/16/21 at 6:26 pm
Posted on 8/16/21 at 6:22 pm to tigersfan1989
Need at least $500/month to cover property taxes and home insurance in a cheaper area for a 2000+ sq ft home
Add another $200 for electricity, $100 for phones, $30 for water, $80-100 for tv $60 for internet, $200-300 for auto insurance, $100-150/ week groceries it adds up quick if you want to retire and travel you need min $50-60k a year coming in during retirement
Add another $200 for electricity, $100 for phones, $30 for water, $80-100 for tv $60 for internet, $200-300 for auto insurance, $100-150/ week groceries it adds up quick if you want to retire and travel you need min $50-60k a year coming in during retirement
Posted on 8/16/21 at 6:50 pm to bayoudude
Senior citizen discount knocks more than 50% off property tax in most jurisdictions. Also you don't need a 6 bedroom house in a subdivision as a retired empty nester.
Posted on 8/16/21 at 8:08 pm to bayoudude
quote:
Need at least $500/month to cover property taxes and home insurance in a cheaper area for a 2000+ sq ft home
Lol. Ive got 2700 S.F. at $275/mo for taxes and insurance.
And as deeprig said, most counties in my area eliminate school tax for retired folks. It should drop below $200/mo at that time.
quote:
$100 for phones, $30 for water, $80-100 for tv $60 for internet, $200-300 for auto insurance
Phone costs are dropping like a rock. 2 phone lines now should run $60-$80. But that is an expense that should continue to drop with technology and more competition.
Im paying $277/mo car insurance now for 3 cars and a 17 year old driver. That said, the auto insurance is an expense most likely to go up than down.
This post was edited on 8/16/21 at 8:16 pm
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