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(Time)   How much money you should have saved by ages 15, 25, 35, and 50. In this economy, though?   (moneyland.time.com) divider line 256
    More: PSA, Oregon Trail  
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26342 clicks; posted to Main » on 01 Oct 2012 at 3:01 AM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-10-01 08:57:52 AM

unlikely: TFA: Saving 100% of your lifestyle sounds impossible, but it is not. If you earn $100,000

and we're done here.


You cut it off a few words too early.

"If you earn $100,000 after taxes"

That presumes a gross income of probably $150,000+. Is this a Time article, or something clipped from Barron's? Because I don't think Time mag knows its audience here. 

/I can do $100k gross annually. Still ain't got shiat.
 
2012-10-01 09:00:29 AM
I think so much of it comes down to a few big years. I had one in 2000. I may have another this year (a few things have to fall into place).

If that is the case, then even though I've been putting >10% into a 401k for 16 years, I will not be where I want to be.

And we are frugal... 7 year old cars, coupons like crazy. We don't go out much, etc.
 
2012-10-01 09:00:50 AM

1nsanilicious: The vast vast vast majority of people have no clue about how to judge a companies worth or where it is going


You're correct, but given the way you phrased that, I don't think you understand why.

A number of investors predicted the real estate bubble when it was first forming. I'll admit I didn't at the time, but it wasn't difficult for anyone who does basic financial research as part of their day-to-day operations. Despite that, many of them couldn't profit off its fall because they couldn't time its collapse. It lasted a full decade longer than it ever should've, and that's assessing it as a bona fide derp-bubble. The market can stay irrational far longer than anyone can stay solvent. The "vast vast vast majority" include most paid investors who are trusted with hundreds of billions of assets and dump them into markets they don't understand. They are the market. When everyone chases the same investments, the price far exceeds the value due to simple supply/demand mechanics -- the system is rational; the people in it aren't. For most people, even "professional" investors, the real estate bubble was just the "serious" version of Beanie Babies. They're not going to invest in stuffed animals because they wear suits and ties, but their line of thinking was JUST as stupid.

The moral of the story is, your wage-earner is a sucker. Amateurs succeed or fail by their luck. "Pros" don't have any better idea of what's going on. The guys who make money year after year, the gurus of the market, the Warren Buffets. . . they don't just understand economics. They understand human nature to be an irrational pack of idiots and bet accordingly.

To put it another way, trying to master the markets by studying finance is like trying to coach a football team by just reading the rulebook.
 
2012-10-01 09:01:44 AM

cig-mkr: 1) Pay yourself first, be it only 10% of your take home pay.
2) Invest your money in the "Dogs of the Dow" that's the blue chips that pay good dividends.
3) Take the dividends and plow them back into more stocks
4) Consider this money already spent and gone, DON'T TOUCH OR BORROW FROM!
5) The stocks will feed on themselves and grow (slowly at first) but accelerates as time goes by.
6) Stay the course !


Dogs of the Dow does not mean what you think it means
 
2012-10-01 09:04:53 AM

enderthexenocide: if i don't have enough money to retire when i'm 70, i'll just rob a few banks or something. if i get away with it then i'll be set for retirement. if they catch me they'll send me to jail, but i'll be 70 years old so what do i care?


Why even bother playing the odds you'll get caught? Just buy a crotch rocket with a credit card and take up stunt biking at 70, no helmet. You probably won't survive your first jump, but at least you go out on your own terms.
 
2012-10-01 09:09:55 AM
What's this "save" word you speak of?

Kids, don't buy a house just because you can afford it. Rent as long as you are saving.

In fact, I'd even say you don't need to own a house. Owning a home can be overrated. Just rent; you're paying for shelter anyway.

And a mortgage is a ripoff.

/can't listen to my own advice in retrospect
 
2012-10-01 09:17:18 AM

xl5150: shower_in_my_socks: The "1 in 3" Americans relying on the lottery as their best bet at retirement stat never ceases to amaze me, even though your odds of winning a big lottery jackpot are statistically ZERO.

No, the odds are 50/50. You either win or you don't.


About half the people who have ever lived are alive today, therefore my chance of living forever is 50%.
 
2012-10-01 09:22:34 AM
I have been dropping 10% of my income into an IRA for a long time now. It's my on hand savings that really suffers over the past couple of years. Every time I start to get ahead, my wife needs 2k worth of dental work, or I have to drop 8k on a new roof for the house. I guess I should feel blessed that I can at least do that though.
 
2012-10-01 09:26:07 AM

Sudo_Make_Me_A_Sandwich: Get term life insurance if you have a family to support.


I'm surprised to see this here, but I think it's good info. My husband and my son both have term life. VERY useful.
 
2012-10-01 09:27:05 AM

Generation_D: These charts got completely destroyed in the 2008 meltdown. I know people who lost over 100K off their 401(k) in 3 months. Not to mention equity off property bought years before.

In short, steady state investment sounds nice til we let the criminals run the investment firms.


Yeah, but if you did NOTHING, you're whole again. You lost a couple of years of investing gains, but you're back up to where you were and even up a little from 2008.
 
2012-10-01 09:28:17 AM
The linked article says at35, I should my annual salary saved.

I'm on track! Never would have guessed that, but since I've been putting money in 401ks for 14 years now, it kinda makes sense. That plus home equity, my investment account and stock options, I'm actually ahead. Which is good because everyone lives to be 102+ in my family.
 
2012-10-01 09:30:54 AM
Well, if you have less money than you'd like at retirement you could always move to a country with lower costs of living instead of trying to continue your same lifestyle in America...
 
2012-10-01 09:38:41 AM

Headso: Well, if you have less money than you'd like at retirement you could always move to a country with lower costs of living instead of trying to continue your same lifestyle in America...


why another country why not another state
 
2012-10-01 09:41:38 AM

xl5150: shower_in_my_socks: The "1 in 3" Americans relying on the lottery as their best bet at retirement stat never ceases to amaze me, even though your odds of winning a big lottery jackpot are statistically ZERO.

No, the odds are 50/50. You either win or you don't.


No, the outcomes are "either you win or you don't." The probability of those outcomes is anything but 50/50. For example, the odds on Power Ball are:
You win: 0.0000006%
You lose: 99.9999994%

/but hey, you can't win if you don't play.
 
2012-10-01 09:50:29 AM
I like how they snuck this into the article... Subliminal messaging...

For those who start late, though, retirement security is an uphill climb. Here's Forbes' analysis of how a late start affects your required savings rate:

(MORE: The Mormon in Mitt)

Start at age 15, and you need to save 8% of annual income for life.
 
2012-10-01 09:52:20 AM
I like how these articles never take life events (vacations, illness, college, etc) into account. Like we're all just supposed to walk to work, come home to eat a dinner of ramen, go to bed, and then start over again everyday.

My wife and I are both 29, living off my (shiatty) salary while she's in nursing school. After all expenses (mortgage, insurance, etc), we have like $600/ month left in savings. Is it really realistic to have, at minimum, my salary saved in the next 6 years?
 
2012-10-01 09:55:13 AM
Step 1: be lucky in one of several different ways.

There is no step 2.
 
2012-10-01 09:59:44 AM

Private_Citizen: xl5150: shower_in_my_socks: The "1 in 3" Americans relying on the lottery as their best bet at retirement stat never ceases to amaze me, even though your odds of winning a big lottery jackpot are statistically ZERO.

No, the odds are 50/50. You either win or you don't.

No, the outcomes are "either you win or you don't." The probability of those outcomes is anything but 50/50. For example, the odds on Power Ball are:
You win: 0.0000006%
You lose: 99.9999994%

/but hey, you can't win if you don't play.


I only play when the jackpot is over $100 million,otherwise why play.
 
2012-10-01 10:00:49 AM

itsdan: "Saving 100% of your lifestyle sounds impossible, but it is not. If you earn $100,000 after taxes, you must limit your lifestyle to $50,000 and save the remainder. This strategy will allow you to retire at age 65 with a lifestyle of $50,000."

And if you make $50,000 or less to begin with, as most people do?


www.leveledmag.com
 
2012-10-01 10:07:52 AM

Public Savant: Isn't this what pension funds are for, seriously?

Me putting 16,9 % of my income (required by law, btw) into a pension fund, WILL enable me to retire at 67 getting paid pretty much what I do now.


An amount that, after inflation, will be about three fiddy.
 
2012-10-01 10:15:20 AM

Generation_D: These charts got completely destroyed in the 2008 meltdown. I know people who lost over 100K off their 401(k) in 3 months. Not to mention equity off property bought years before.

In short, steady state investment sounds nice til we let the criminals run the investment firms.


Do you know how I know that you don't know where the Dow and Nasdaq are today.
 
2012-10-01 10:18:39 AM

bearcats1983: I like how these articles never take life events (vacations, illness, college, etc) into account. Like we're all just supposed to walk to work, come home to eat a dinner of ramen, go to bed, and then start over again everyday.

My wife and I are both 29, living off my (shiatty) salary while she's in nursing school. After all expenses (mortgage, insurance, etc), we have like $600/ month left in savings. Is it really realistic to have, at minimum, my salary saved in the next 6 years?


$600/mo in savings? That's more than $43K over six years, plus whatever that money earns for you over the next few years--and within that six years she'll presumably finish school, and your salary will likely increase...etc...

Nothing is certain and catastrophes can happen and all that, but yeah, that goal seems pretty realistic.

/assuming your "shiatty salary" isn't $100K or something
 
2012-10-01 10:20:34 AM
So our economic system basically boils down to: 1) Work as hard as you can until you are physically unable. 2) Live an austere life and save as much as you can in the meantime 3)If you have avoided layoffs, chronic health issues, currency collapse, or financial fraud, retire and live in moderate comfort until you quietly die. Our system virtually assures suffering unless we walk a narrow path AND get lucky enough to avoid the predators. But don't you dare question it, because built in there is a one in ten million chance that you can strike it rich and then none of the same economic realities will apply to you anymore.

If we were any more of disposable cogs, they would just cut the bullshiat and start tattooing bar codes onto our foreheads.
 
2012-10-01 10:20:56 AM

ExperianScaresCthulhu: xl5150: itsdan: And if you make $50,000 or less to begin with, as most people do?

Then you should be working at making yourself more marketable so that you can develop a skillset in which you can charge more for your services.

That's all well and good. Like advising people to make sure they're born to parents who already have money and can give them a leg up and a head start. Or advising people to make sure they're in the will of a rich relative.

But in the meanwhile, what can people do to save in their current situation?


Spend less money

Stop whining about how you need all the stuff you buy.
 
2012-10-01 10:21:22 AM

dragonchild: The point isn't so much the precise nature of the savings rates cited, but how delaying even as little as five years changes the calculus.

Note to thread: Don't listen to someone who has no idea what calculus is.



There's plenty wrong with the article, but the author's correct there. "Calculus" isn't just derivatives and integrals. In a more basic sense, it can refer simply to the calculations and methods used when working through a problem. If I decide to paint my garage with two coats of paint instead of just one, I can legitimately say that my decision changes the calculus of determining how much time, money and materials the job is going to take, even though the actual mathematics involved doesn't go beyond simple algebra.
 
2012-10-01 10:22:21 AM

sid244: Private_Citizen: xl5150: shower_in_my_socks: The "1 in 3" Americans relying on the lottery as their best bet at retirement stat never ceases to amaze me, even though your odds of winning a big lottery jackpot are statistically ZERO.

No, the odds are 50/50. You either win or you don't.

No, the outcomes are "either you win or you don't." The probability of those outcomes is anything but 50/50. For example, the odds on Power Ball are:
You win: 0.0000006%
You lose: 99.9999994%

/but hey, you can't win if you don't play.

I only play when the jackpot is over $100 million,otherwise why play.


You've hit on one of the most important and least understood parts of gambling: Return.

When a casino advertises 96% return on slots, what they mean is: if you win the 100-1 payout, you beat 104.2-1 odds. Your payout is just slightly less than the odds, so that over the long run, more of your cash is kept.

By that measurement, the lottery is pretty poor return until the pot reaches epic proportions. When you're beating 175 million to 1 odds, and the payout on a $100 million pot is around $67.5Mil, your return is about 38.5%.

The attraction is the payout .vs the cost to play. $67.5 million for a $2 ticket? Sounds awesome til you see the odds.

/I've always wanted to offer a dice game to the gullible. They pick their favorite number 1-6, then try to roll that number on three 6 sided dice. If they succeed, I pay them $100. Cost to play is only a buck.
 
2012-10-01 10:23:38 AM

zepillin: sidcart42: P.S. From the article:

"If a wagon train averages 10 miles a day for the first half of the Oregon Trail, how fast does it have to travel the second half to average 20 miles a day for the entire journey?"

The knee-jerk response is, naturally, 30 miles a day. But, as you might imagine, that wouldn't be worth writing about and isn't even close to correct. The blog continues:

"If the trail is 2,000 miles long, to average 20 miles a day you would have to travel the entire trail in 100 days. But if you averaged 10 miles a day traveling the first 1,000 miles, you would have already used up 100 days. You would then have to travel the second thousand miles instantly to overcome your slow start."

That might be apparent to a mathematician.


My knee-jerk response was that the problem presented had none of the information necessary to answer it. Something I'd imagine would be as apparent to a mathematician as some random blogger.

also the statement "If the trail is 2,000 miles long, to average 20 miles a day you would have to travel the entire trail in 100 days" is entirely incorrect

averages ... How do they work?


You are wrong.
Do the math.
 
2012-10-01 10:25:36 AM
The people biatching about their salary that have a totalfark tag next to their name are funny.
 
2012-10-01 10:27:28 AM

tenpoundsofcheese: Generation_D: These charts got completely destroyed in the 2008 meltdown. I know people who lost over 100K off their 401(k) in 3 months. Not to mention equity off property bought years before.

In short, steady state investment sounds nice til we let the criminals run the investment firms.

Do you know how I know that you don't know where the Dow and Nasdaq are today.


Exactly. Look at the performance of the S&P 500 over the past century. Even with periodic downturns, there hasn't been a 40-year period where you wouldn't average at least 9-10% annual growth by just throwing your money into a fund indexed off of the S&P 500 and forgetting about it. That's even if your 40-year investment period ended in late 2008 when the market was in the toilet.

Sure, you can do a lot better than 9-10%, but "buy and hold" is still a perfectly-legitimate investment strategy if you're talking about long-term investing.
 
2012-10-01 10:29:25 AM
Crap, I forgot Power Ball is now $2 per play. Return on a $100mil (advertised) pot would be about 19.3%.
 
2012-10-01 10:29:32 AM
Didn't real all the comments to see if it had been addressed prior, but....

They don't account for home-wrecking inflation either. That $50/yr retirement means crap to a 15 year old in 2062, when you spend every dime of it for a can of Chef Boyardee Ravioli and some creek water.

If you make $100k/yr, you should be living in a van down by the river so you can sock away all of it that isn't absolutely necessary for survival. That's the ONLY way you may weather another recession, inflation, future wars, market crashes, etc.

It's really going to suck when you hit 65 and you're worth absolutely nothing because the USD to Yuan conversion rate in the future will be like the Iranian Rial to USD now.
 
2012-10-01 10:31:23 AM

itsdan: "Saving 100% of your lifestyle sounds impossible, but it is not. If you earn $100,000 after taxes, you must limit your lifestyle to $50,000 and save the remainder. This strategy will allow you to retire at age 65 with a lifestyle of $50,000."

And if you make $50,000 or less to begin with, as most people do?


Then reduce your expenses to $25k or less.

That's the point of it, not the arbitrary number that they picked to demonstrate it. If you want to retire you have to save. If you don't make enough to save while maintaining your lifestyle, then you're going to have to adjust that lifestyle. Amazing that!

Societies "expected" lifestyle for people of all age ranges has drastically changed over the last 50 years. We also have a whole lot more debt and less savings. Wonder if maybe the two are related...

/ and if you say living on $25k can't be done for a family... my parents raised me and my brother on around that inflation-adjusted amount.
 
2012-10-01 10:32:40 AM
But saving is hard, waaaaaah! I can't afford it, so I won't bother trying! Whatever.

Everyone should be saving for retirement, even if you can't save much. I have had my Roth and 401k set up to be direct deposited every payday since my first day on the job. I don't miss the money because it is like it was never there. I did this even when I was poor. IMO, investments are a necessary monthly expense. It is just like your rent or car payment which must be taken care of before spending on any of the fun stuff, always.
 
2012-10-01 10:37:13 AM

Private_Citizen: Crap, I forgot Power Ball is now $2 per play. Return on a $100mil (advertised) pot would be about 19.3%.


Someone here posted a link to a Powerball simulator last week that allows you to auto-pick several thousand "plays" per minute, and would track your winnings for all winning combinations, not just hitting the big jackpot. After several thousand plays, the average return on a dollar spent stabilized at around eight cents and didn't really move after that. Of course, hitting "the big one" would make it profitable, but even a few of the smaller jackpots didn't raise the average return very much or for very long.
 
2012-10-01 10:39:41 AM
In other words, we're all powerf*cked.

The right wing war on the middle class did its job.

401k plans were intended to be supplementary to pensions, not a replacement. And sure, people can save on their own...but where's the corresponding compensation bump that should have come with the pension phase out?

The middle class got raped.
 
2012-10-01 10:43:47 AM

ScottRiqui: Private_Citizen: Crap, I forgot Power Ball is now $2 per play. Return on a $100mil (advertised) pot would be about 19.3%.

Someone here posted a link to a Powerball simulator last week that allows you to auto-pick several thousand "plays" per minute, and would track your winnings for all winning combinations, not just hitting the big jackpot. After several thousand plays, the average return on a dollar spent stabilized at around eight cents and didn't really move after that. Of course, hitting "the big one" would make it profitable, but even a few of the smaller jackpots didn't raise the average return very much or for very long.


Nope. It's not a sound investment (which is obvious). However, even knowing the odds, I can be fun to throw down a dollar or two and fantasize.

I just feel for the people who play the lottery for real - and there are more of them than is comfortable to admit.
 
2012-10-01 10:43:54 AM

azmoviez: Don't have kids. Don't go on vacation. Don't eat out. Don't buy nice things. Don't spend on entertainment. Don't have a nice car. No cable. No toys. No birthdays. No tithing.

Can you imagine our economy if everyone actually lived by the advice in the article?


That's the dirty little secret, here: it only works if not everyone does it. Which is why it's not a sustainable long term solution for our society.
 
2012-10-01 10:45:30 AM

SacriliciousBeerSwiller: In other words, we're all powerf*cked.

The right wing war on the middle class did its job.

401k plans were intended to be supplementary to pensions, not a replacement. And sure, people can save on their own...but where's the corresponding compensation bump that should have come with the pension phase out?

The middle class got raped.


^This.
 
2012-10-01 10:47:44 AM
You have to remember, if you make under $50k, advertisers don't want you cluttering up the readership numbers. Go noodle a catfish or something. This article is none of your business.
 
2012-10-01 10:50:13 AM

glmorrs1: I'd be willing to bet his 'personal assistant' is his mommy bringing him cookies and milk.


Here is xl5150 and his assistant hard at work in his office:
v027o.popscreen.com
 
2012-10-01 10:54:09 AM

SacriliciousBeerSwiller: 401k plans were intended to be supplementary to pensions, not a replacement.


[citation needed].

Remember, not all employers offer pensions. Not sure where the basis of this program was tied into being a supplement. I am pretty sure that it was formed to also be a pretty good stand-alone program.
 
2012-10-01 10:56:44 AM

xl5150: I mentioned on a thread recently that I'd fired my personal assistant. It happened on Labor Day, so the irony makes it stick out in my mind. He asked me for a raise so I fired him. Within a few days I had a new personal assistant who is just as good as the old guy and I'm paying him $50 less a week. That's just how it works when there are a lot of other people out there who can do your job as well as you can and they're willing to do it for less money. I think I did a good job of letting the people working for me know how I feel there, and you can see how it worked out for me--I have an additional $50 in my pocket each week. Not too shabby.


Prole speech detected.

6/10
 
2012-10-01 11:00:13 AM
saved?
 
2012-10-01 11:02:52 AM

The Envoy: glmorrs1: I'd be willing to bet his 'personal assistant' is his mommy bringing him cookies and milk.

Here is xl5150 and his assistant hard at work in his office:
[v027o.popscreen.com image 626x480]


Yep. He's a joke. I work with real employers. "Job Creators," if you will. Not a single one would talk about employees that way, because they know that employees are the lifeblood of an organization.

This guy is more than likely the youngest son of a wealthy family (possibly asian family, xl5150? I'm sensing some daddy/filial piety issues), born and raised in an affluent neighborhood in Southern California, who now owns a cart in the mall selling iphone accessories. His parents are ashamed of him-- GUARANTEED. 

The bad news is that he'll never have to worry about money. The good news is that he'll always be a failure in every other respect.
 
2012-10-01 11:04:43 AM

cochlear: Used to be the norm, back in the day: renting a room when you were just starting out in life, renting out extra rooms when you needed income.


I did this (the first) well into my thirties. Thing is, I suspect more and more of us are going to be just starting out until we're dead or in whatever low-end long term care facility Medicaid will still cover.
 
2012-10-01 11:05:57 AM

Generation_D: These charts got completely destroyed in the 2008 meltdown. I know people who lost over 100K off their 401(k) in 3 months. Not to mention equity off property bought years before.

In short, steady state investment sounds nice til we let the criminals run the investment firms.


Did they withdrawal all the money at that time? If no they did not lose 100k.learn how investment works.
 
2012-10-01 11:06:13 AM
Good Luck and Thanks For All The Fish
 
2012-10-01 11:19:23 AM
Don't forget, you want to have at least 6 months saved as a safety cushion above and beyond retirement



Good luck, farkers.
 
2012-10-01 11:19:35 AM
I AM SO SCREWED!

/cries in a corner
 
2012-10-01 11:24:59 AM

xl5150: shower_in_my_socks: The "1 in 3" Americans relying on the lottery as their best bet at retirement stat never ceases to amaze me, even though your odds of winning a big lottery jackpot are statistically ZERO.

-

No, the odds are 50/50. You either win or you don't.


Pffft.
 
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