This blog post says as a Software Engineer working in the US you should have $4 Million in savings to have the same income, in retirement, as a fresh software engineer.<p>http://chase-seibert.github.io/blog/2014/01/01/saving-for-retirement-as-a-software-engineer.html<p>How much have you saved for retirement, and at what age?
Nothing... because methane in the arctic will end human civilization by then.
<a href="http://arctic-news.blogspot.com/p/extinction.html?m=1" rel="nofollow">http://arctic-news.blogspot.com/p/extinction.html?m=1</a><p>It makes more sense to take big risks with money and then use any big payoffs to help geoengineering efforts or prepare for living in a bunker. That may sound silly but some rich people are already doing that:
<a href="http://www.newyorker.com/magazine/2017/01/30/doomsday-prep-for-the-super-rich" rel="nofollow">http://www.newyorker.com/magazine/2017/01/30/doomsday-prep-f...</a>
If you live in a place like the Bay Area, the best retirement plan involves these 4 steps:<p>1. Owning a home in the Bay Area by the time you retire. No mortgage, no rent. Just bills.<p>2. Sell that place when you retire in order to move to a cheaper location. Use whatever's left from the sale of your home as an income for the rest of your life. Let's take a $800K home for example, if you make $150K per year, you may qualify after 2-3 years by saving as much cash as you can for a down payment. That house/condo might be worth 1.5 to 2 million dollars in 30 years from now, who knows? Despite the inflation, if you sale it for say $1.5, after tax and real estate fee you might end up with $1.2 net. This is not income money. You could then buy a $500K house somewhere cheap, then use the remaining $700K as part of your retirement money, which brings in $35K net per year for 20 years. This is roughly the equivalent of $50K gross income per year.<p>3. Make sure to add a little bit in your personal saving account every month, even if it's $100-$500 it's fair enough on a 30 year period.<p>4. Make sure you add up a little bit in your 401K.<p>The combination of all 4 will maximize your retirement while leaving in your own place. Real estate in a place like the Bay Area is the best investment because of the location. It doesn't matter if it's a tiny 1 bedroom in San Francisco or a crappy old house in South Bay, it will hold its value over the years and will most likely help you moving to a cheaper place with a lot of cash in hands.
I believe the guideline is that in order to enjoy a $X/year retirement income (adjusted annually for inflation), you need a nest egg of $25X. So if you'd like to retire with $100k/year, $2.5M would do it. And even less if you are willing to factor in social security income.<p>If you adopt a buy-and-hold investment strategy over the course of 20-30 years, with a good mix of index funds, the above should be easily within reach.
I'm 24 and have 10k in Wealthsimple because I can't be bothered to learn more about how to manage my investments myself right now (and I've been a dumbass with money for the past 6 years).<p>WS tells me I'll have ~$5,222,649 when I'm 65 if I continually add $5k/mo to my invesments.<p>They say "We include your scheduled contributions into this projection and assume a return of 5.1-5.45% on stocks and 0.74-1.05% on bonds after 0.5% fees. The impact of taxes is not included. Actual returns may differ."<p>My ideal plan is to have ~$600k+ in investments and withdraw 1-2%/yr to cover food costs. I'm looking at some 200-300 acre stretches of land for around $150k~ in Canada where I plan to build a house myself. Looking to hookup solar and for a freshwater lake to be running through the land. The goal is to self sustain for however long I need to so I can think and work on my hobbies without the overhead of rent/career.<p>I feel like trying to scrape together an hour or two here and there for a hobby doesn't do anything for me because I'm working on things that require large stretches of uninterrupted time over the span of weeks/months.
In the UK the (usual) limit you can have in your pension fund is now £1m.<p>I would expect to have about 20 times whatever I wanted to live on per year, and that yearly amount would high enough above what I know is enough to be comfortable. The state pension should kick in something too.<p>However, I don't expect to completely retire at any point though legally I currently could in only 5 years' time (then another 10 years or so to state pension age). So if I'm not doing a reasonable amount of work and keeping my brain active at 70 I would be disappointed.
I'm 35, and have been saving for retirement and maxing out my 401(k) ever since I started working. I don't think I'll ever have 4 million dollars in my retirement account, but I think (hope?) I'll be fine.<p>I think it's the numbers that are suspect in this analysis.<p>1. The calculator asks for your salary, then uses your current salary to determine your need for money in retirement. If you're saving 20% of your salary, then really you are only living on 80%, and that 80% should be used as your 'living expenses money'.<p>(fine print of calculator: We then assume you can live comfortably off of 85% of your pre-retirement income. So if you earn $100,000 the year you retire, we estimate you will need $85,000 during the first year of retirement.<p>I think it should be at least 85% of what you're not saving. For example, if you're making 100k, saving 20k, then really you should take 85% of 80k, which is 68 - not 85.<p>Also costs change as you get older. While you may spend more for health care, you hopefully won't have to pay rent, for raising children, etc.<p>Finally, they seem to say they want to take all the money and purchase an annuity. It seems like as soon as you retire, your money stops growing (other than for inflation) because of the annuity, but if you kept that money growing while you were retired, it would probably be even less.<p>Really the big trouble is you can't rely on ever increasing markets with some 7% yearly rate of return. It could be higher, it could be lower. If it's lower for a long time, basically the US retirement systems (both 401k and pension) are in huge trouble.
<i>This blog post says as a Software Engineer working in the US you should have $4 Million in savings to have the same income, in retirement, as a fresh software engineer</i><p>Fidelity is always telling me I need some ungodly amount of money saved in order to continue the lifestyle to which I've become accustomed. I don't need that much. Here's what my current income pays for that won't be an issue in retirement:<p>1. Maxed out 401K at $18K/year. The wife's doing the same.<p>2. $3K a month paid to mortgage principal, in addition to the house payment. (It is financially unwise to pay down a 2.5% loan quickly, but I'm not retiring with a house payment.)<p>3. Commuting expenses.<p>4. A hell of a lot more eating out than I plan to do in retirement.<p>5. My current tax rate. A lower tax rate in retirement is the whole basis of the appeal of tax-deferred accounts.<p>And let me give you some anecdata to work with as you ponder your starvation in retirement: my parents. Mom just bought a brand new Corvette last year. Dad is talking about a new $65K truck to replace the one they bought just a few years ago. The just bought a new $35K fifth wheel camper this year. A large, long-paid-off house on six acres in Florida. Lots of camping trips, which means feeding that hungry diesel truck that's pulling that fifth wheel, and camp spots with hook-ups ain't cheap. Maybe it's not how kings live, but I'd have no problem with the lifestyle. They're in their 70s now, I don't see the money running out any time soon.<p>And they retired in their 50s with about a million dollars.<p>You'll need $4 million if you still hold a mortgage in the Bay Area and you're stilling hitting the $EXPENSIVE_NIGHT_SPOT thrice a week, while having Uber Eats delivery your dinner every night. Which you won't be doing when you're 55 or 65 if you have any sense. Which means you don't need anywhere near $4 million.<p>To get to answering your question, I plan a minimum of $1 million, and a max of $2 million, when we retire. We're not going to continue to live in Redmond, WA, I don't think. Taxes are pretty good, IMO, but we'll sell the Redmond house and buy something in, say, Bellingham and pocket the difference. I have absolutely no reason to believe we'll be anything other than just fine and dandy. Especially considering that the median person of our mid-50s age has less than a tenth of our current savings, and you don't see masses of retired people starving in the streets, do you?
$0. I'm focused on building a six-month emergency fund first.<p>I don't need anything approaching 100% income replacement, as it would make no sense to pay exorbitant rent for proximity to jobs as a retiree.<p>I doubt I'll save enough over my lifetime (outside of 401k) to scratch a down payment on a Bay Area 1-bedroom condo, but it'll be more than sufficient to buy a palace for cash anywhere else the <i>moment</i> I don't need to live here anymore.<p>(I have worked in Midwestern IT cost centers, never again).
Less than 2% of the US will ever see anything near $4 million in their bank account.<p>Most people would consider it a LOT to save $20k a year, which would be well under a million by retirement.
That's a bit of an odd analysis.<p>The biggest chunk of my income is eaten up by taxes and rent. Once you've retired and your only income is from long term capital gains, taxes are much less of an issue and hopefully you've purchased a home so you don't need to rent. It also ignores social security, which based on the quick calculator at ssa.gov seems to be not an insubstantial amount, though I get that people don't want to count on that.<p>On the flip side, it completely ignores inflation which may mean that while your savings may be very large compared to how much you need to live today, they may not be adequate 30-40 years from now.<p>Without a good estimate for what your expenses will actually be, the number you "need" turns out to be complete nonsense IMO.
> Ballpark, you make about $100k a year in your 20s<p>I'm green with envy... With that much money i could have probably retire right now at 30, and i'm half way there.<p>Then again, i live in a country with free medicine, free education, no lawyers, a recently-ended oversupply of housing leaving me with 1.5 apartments and a house from grand-grand parents who "moved on", and all bills and necessities coverable by about $2k a year, so i'm not sure if i have a right to be envious.<p>More to the point, i keep the money scattered around - foreign currencies, gold, crypto, etc, to avoid losing all at once and staying ahead of the inflation. I don't expect to ever become a millionaire, barring a lucky investment or something.
absolutely zero, i have very little chance of surviving to retirement age and even if i do i cant imagine id have any desire to not carry on working, its not like im a bricklayer, chances are ill still be able to type and as long as i can do that ill be working
I'm too young to consider my savings as retirement, but I created a handy spreadsheet that allows you to estimate how much you'll have by the time you retire.<p><a href="https://docs.google.com/spreadsheets/d/1nV8N16sBFiqDtZqkORlhLGgBmVxghohCnXJtPzrmu-A/edit?usp=sharing" rel="nofollow">https://docs.google.com/spreadsheets/d/1nV8N16sBFiqDtZqkORlh...</a><p>Feel free to point out bugs or copy and add features.
I'm 23. I have a goal of $2.4 million dollars by age 60. I currently have $4.3k saved. I'm having trouble meeting my goals because I am having trouble finding work. I live in the third largest city in my state, but it's not a city positively affected by globalization, so unemployment is high and wages are low. I can't move because my wife has a career started here. Such is life.
> When you do pay taxes on the money in retirement, your tax rate will likely be lower.<p>The only reason it will be lower is if income is lower.<p>Some people say to not contribute more than the match, because you end up paying more taxes in retirement (taxed as income) than if you just ate the taxes first and paid capital gains on it later.
Something to consider: assume you make $100,000 and you max out (~$18,000) your 401K. Are you going to be saving $18,000 a year for retirement when you're retired?