Retirement account millionaires rise at Fidelity

What’s really sad is the average balance by age bracket in this article.
401k balance by age

Teaching financial literacy is clearly a gap but it can also be overplayed a bit. Structurally, managing finances isn’t easy and the average individual will always struggle to grasp how the concepts work together. There is an intelligence gap as well as as education gap. I do not know which is the greater contributor but at least the education gap is addressable.

If that poor person in your example contributes 4% of their pay and gets a 3% employer match for a 30 year period with a 5% return, they would hit the $175,000 you mentioned.

People need to understand they need to start saving whatever little amount that they can early, because compounding works miracles over time.

Maybe you need to read “the millionaire next door.”

You don’t become a millionaire by making a whole bunch of money, you become a millionaire by making sacrifices to save.

quote:

---

I’m actually shocked the numbers are so low. Only 196,000 people have over $1MM in their 401k and only 179,000 have over $1MM in their IRA.

---

I am too.
Fidelity claims 30M retirement accounts.
Around 1% of those > $1M?

quote:

---

Maybe that is because the bulk of lower wage jobs you mentioned were not meant to be full time jobs. If you are 30+ and still a fast food cook you need to re-evaluate your priorities.

---

this is such a disingenuous argument that gets thrown around like it's fact. a job is a job to most people. they work where they can make the most $ for the hours they can work. there are only so many oilfield jobs out there, and those jobs are boom or bust. also only so many people physically able to do that work. not to mention the oilfield baws i know aren't exactly socking their $ away

an ever expanding part of the economy is in service industry, and somebody has to do those jobs. it can't all be high school kids and part time workers. my old man worked in a factory his whole career. it gave me a comfortable life and set me up to move up the ladder. sadly, there are far fewer of those types of jobs available in this economy.

quote:

---

C'mon, people, it's not just education. It's earning power. How is someone who earns 36K a year supposed to save significant sums of money while also raising children?

---

That is tough sledding.
One could discuss issues foundational to that scenario . . . number of children, single parent household, purchasing choices, etc. But you're right. Raising a family while saving a pile of money on $36K/yr is hard.

Median family income in La is $$60,510 btw.

quote:

---

Maybe that is because the bulk of lower wage jobs you mentioned were not meant to be full time jobs. If you are 30+ and still a fast food cook you need to re-evaluate your priorities.

I see people often with a GED who go on with mechanical/oilfield service/etc type jobs that have the ability to work hard and earn a good wage with nice benefits.

---

I don't know about your area, but there seems to be an awful lot of apparently 30+ year old fast food, restaurant and hospitality employees at the places I frequent. If I had to guess, almost all of the gig economy Waitr/Uber/Lyft drivers I see around town are at least over 30. Maybe some of them lost those mechanical/oilfield service jobs in an industry downturn.

Your average fine dining restaurant line cook in SE LA make $15/hr, and he works full time. Not fast food, not seasonal part time. No benefits, no 401k. No health insurance. And that’s in a much lauded cultural sector considered to be one of the key components of our tourism draw,

He is not an unskilled laborer, he’s just working in an industry that runs on thin margins and has little labor organization or industry incentive to treat people better. Think about your cook next you sit with a white napkin in your lap. Clearly you appreciate that sort of hand labor, but apparently that guy should find another line of work because he’s too old to be making so little money? As the kids today say, whatevs.

Many, many jobs in our economy are either no longer full time due to corporate cost cutting, or the FT jobs offer no benefits. The gig economy is hell on workers.