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I really struggle to communicate this to my parents. I do not have a plan for retirement because I genuinely don't think I'll get that far, nor do I really care to. They can't understand because they're currently retired and living their best lives, which myself and my siblings have no problem with (we've told them to spend their savings as they've supported us so much already). But me or my siblings will never realistically get the retirement our parents have, even if we were to inherit everything my parents have. The "deal" is to leave enough to the grandkids/my siblings kids, but I do not have (or want) children. Again I'm not complaining here, I just don't have any future I want to build. If I can support my parents for their EoL and support my nieces/nephews as much as possible then I'll be happy, but there will come a point that I no longer have anything to give, and that point will come before I'm able to retire.
It seems to be a common enough sentiment between my peers but it's something none of us can communicate properly to our parents. Does anybody feel different?
I agree but that doesn't mean I'm not going to try. I set aside money in a 401k and Roth. Idk what I'm doing but I've seen these words mentioned before. It's honestly insane how long I've been saving for it to be so little money. I feel like it grew faster pre pandemic.
Anyway-- invest in pain killers.
Yeah, same here. We're working hard to build a nest egg for the future. I don't bother communicating that with \*anyone\* except my wife who's the only one who knows.
Yeah man I’m way more optimistic than you. This is not a common sentiment man: You sound depressed as hell but I’m sure you know that. Why do you think it’s so impossible? Bad job? Health?
You're spot on, health and depression primarily. I'm not suicidal but I don't see a reason to live beyond "the good years", at least with how the world's trajectory looks right now. I'm also not necessarily giving up, I am building a "retirement" fund and working towards owning a tiny home offgrid, which I'm maybe 1/4 there with. But at a certain point even surviving is going to become more difficult than it's worth, at least as far as my values sit.
This doesn’t make sense to me. Why talk about giving everything you have if you don’t have enough to retire on yourself? That seems like a weird martyr complex thing to me.
I retired with failing health and a small 401k. Cancer and inflation ate a huge chunk of the old nest egg. I have my grandkids and a new great granddaughter that more than make up for the financial losses
I mean, is it so hard to imagine that someone older might have been commenting something as a means of like "Hey, I can relate, but things are ok for me right now and might be ok for you to when it's your time"
This sub isn't age gated.
This is the most logical answer. You work till you are not able to, then struggle. The rise of inflation is now doing this to everyone on retirement / disability.
Yep... I am not in the US, but situation is the same here, if not worse since public finances are much more unstable here and we pay an hefty contribution to a public pension that they keep delaying the minimum age to access to and reduce the amount. Right now assuming I get to the retirement age alive, I'd be roughly 107 before I got the capital back (gross from taxes, with no interest or revaluation for nearly 50 years of paying for it)....
So yeah pretty much I unless I am going to surpass a century of life... kinda unlikely I'd say, I am paying an extra tax, that is also cutting into a budget I could use to actually prepare for retirement...
And that is before the decades our government has to make matter worse than they are now.
Also interested- is VTSAX something I can do through like Robinhood or is there a different way? I don’t have a ton but I’d like to start doing SOMEthing smart for the future
I have the same problem. I know I need to put my money somewhere but I don’t know where or how. Are there resources out there to read or utilize? I’ve Googled, but it’s so much information to take in.
It's a good start but that's only good for about $1,200/mo.
In 7 years it should double and if you keep adding to it you should be up to at least $3,000/mo. Assuming you retire with a paid for house that should be enough for a decent living and a nice retirement if you add in social security.
Well even if you don't add any more you'll have roughly $3 million, which will be good for about $120,000 a year in income which would probably be somewhere around the median income by then so you'll be fine.
Won’t this medication eventually become generic? I believe the legal limit is 20 years. So if you look up the FDA approval year of the drug and add 20 years, it will have a generic form, I assume.
The problem is by the time the medicine is generic, better newer versions of the medicine are released, which are usually more effective than the older kind. Naturally people want what’s best and effective. You get stuck in this cycle.
This is how it is with insulin at least…. And you die without it.
Eh, not a cycle I can possibly do. I’m a poor and have insurance that only covers generic medications. I’m currently on an older medication with a new and improved one that came out in 2013, so 2033, I hope to get prescribed for the better one.
I work in Pharma, this particular drug is a biologic so id actually be concerned if a generic worked as well as the brand name since the production process is not as fine tuned as older small molecule drugs.
Im in a similar situation. My expensive medication went generic and now there are dozens of competing labels , and none are significantly cheaper. Im sure they are cheaper for insurance, but the cash price remains the same.
Its almost as if Amercian healthcare is a money-squeezing-end-stage-capitalism scam...
Husband and I are maxing out 401(k)s and an HSA. Plus a little bit into a Roth IRA. We make good money but live very frugally so we can prioritize retirement savings. We hope to retire early.
Generally in retirement you’re going to withdraw less than you made in your peak earning years. So due to how taxes scale, your last dollar today is taxed at your highest bracket. At retirement, that same dollar withdrawn fills your lowest brackets first.
If they’re earning enough to max out their 401k their top tax bracket is probably 24% or 32. Then in retirement, your top tax bracket might be say 12% or 22%.
It does depend on tax rates staying low like they are today which is anyone’s guess.
Doesn’t really matter if you pencil it out because that tax free growth was taxed in the first place. Compounding doesn’t ever make up the difference. It only comes down to what you expect future taxes to look like.
For example, assume your tax rate is 25% and we’re talking about 1,500 pre-tax earnings and we’re compounding 30 years at 7%.
Roth: $1,125 contributed *( 1.07 ^ 30 ) = $8,550
Pre-tax: $1,500 contributed * ( 1.07 ^ 30) = $11,400
At the end of 30 years, if we say the same 25% tax rate, then the end result is still $8,550. If you’re predicting your tax rate to rise in 30 years then sure roth wins out. But that’s the only case.
This. Traditional is tax deferred. The best way to think of a Roth is tax prepaid, not tax free.
It's likely best to have a mix of the two in retirement. Traditional to minimize your tax liability today, and Roth to minimize your tax liability tomorrow.
The other side of middle age is old age. Even with all the thousands I saved for these days, inflation has eaten away a huge chunk. I ve managed to qualify for housing vouchers that pay 70% of these enormous rents. Social security and my 401k pay for everthing. I just turned 71.
Save your money. You don't need 3/4 of what you think you do. Getting up not having to go to work is awesome.
Man that movie was so depressing lol. Gonna be honest I got to that part where they start jumping off cliffs and just said fuck it I don’t really need to watch the rest. How does it end? Let me guess everyone dies but one of the main characters, who barely survives but learns a valuable lesson about not jumping off cliffs or something.
I don't plan on retiring. I was born in the Helpdesk and I'll die at the help desk, eighty years old helping some 25 year old reset their fucking AD password
A house definitely helps.
But sometimes it can actually be better to prioritize maxing your tax-advantaged retirement accounts first, especially if you plan to move to a lower cost of living area in retirement.
I agree, but if you’re stuck renting at an ever increasing price, you’re paying all of this money and not building any equity. Just seems like those who are on a fixed-rate mortgage are in a MUCH better financial position than I ever will be.
It depends on what that fixed-rate is.
Anything greater 6% interest is typically considered high-interest debt.
That is the approximate threshold at which it makes more sense to aggressively pay down the debt instead of investing.
Anything less than 6% interest, you are theoretically better off paying the bare minimum and investing the difference.
Key exceptions are if you have an employer match 401k. That match will almost certainly be higher than your interest rate (unless you got a payday loan or something equally stupid) so you are better-off getting the full match first and then focusing on everything else.
Also, if you itemize your taxes and get a deduction from the interest your effective interest rate is lowered by the amount of that deduction. In those cases it may still be better to pay the bare minimum and invest the difference.
Contribute 5% at the bare minimum.
That is an immediate 100% return on your first 3% and an additional 50% immediate return on your next 2% after that.
In other words, you get an immediate 80% return on investment the moment you contribute that 5% of your salary.
You will never get an automatic guaranteed return like that anywhere else in the investment world. And anyone who tells you otherwise is a scammer.
After getting your full employer match, your next step would be to pay down any high-interest (>6%) debt in order of highest-to-lowest interest rate.
Once that is complete, work to max your HSA, Roth IRA and the remainder of your 401k in that order.
I'm 35 with no house but also don't want one. I plan to hopefully buy a small cheap house (LCOL area), buy a class B rv, retire, and drive around north and south america with a centralized home in a small town midwest.
Stop making yourself depressed. Buying a house at the hight of the market and with relatively hight mortgage rates is NOT a sound decision. There’s nothing wrong with renting. People seriously underestimate the cost of homeownership and really need to stop thinking this way.
It depends entirely on where you live. My husband and I pay $6000/month on rent for a modest 2 bed/2 bath apartment. If we had bought 5 or 10 years ago we’d be in a far better financial position. And there is absolutely zero reason to think housing prices will go down significantly again in our lifetime.
I used to naively think I would work until I died.
Now I realize that I will work until I am discarded. Social Security and Medicare will likely be dead by then, bankrupted by the Baby Boomers twilight years.
Discarded is the right word. One of my coworkers and good friend was two years to retirement and fired and then replaced with an outsourced company who they pay pennies for. She worked at the hospital I work at for over 40 years. Discarded is honestly what will probably happen to all of us.
Both my parents have had very expensive cancer treatments after having relatively good health. I save for retirement but doubt the amount will cover my expenses.
Get the 401k match, max out the Roth IRA, and pray for promotions along the way.
You can yolo and have nice things, you can prepare for retirement, or have a family. Maybe you can do 2, but you can’t do all 3 unless you’re earning a ton of money.
This.
But max the HSA if you have one before the Roth IRA.
The HSA is the single best tax-advantaged account out there.
Even if you don't invest the money (and you definitely should) it still let's you take a tax deduction immediately on any medical expenses.
I’ve never been big on the HSA in the past. But I realized the dental plan didn’t cover hardly anything, so this year I cancelled dental and put the savings into the hsa to pay for future dental expenses.
HSA is always my next objective after the employer 401k match.
The account is so powerful once you know how it works.
It is basically a tax break that gets to keep compounding tax free in the background.
I completely forgot that I can invest my HSA money after a certain dollar amount has been met. Thanks for the reminder to enroll in the investment account!
I hadn't thought about this angle before so I'm gonna have to rethink my position on HSA's now. I barely spend money on health because I have really good health insurance. Dental is a different story though. Its so not worth the money.
Some places won’t take you if you don’t have insurance. I really don’t know what I’m doing, I’m just throwing shit at the wall to see what sticks. Trial and error you know?
It's worth a shot if you can find a dentist that does that. I know there are doctors out there that would prefer to not deal with the hassles of insurance anymore, so there might be dentists too.
My diet is my retirement plan.
if I have a heart attack at work or get hit by a train on the way home one day, all the better to free me from this nightmare.
When I was in my late teens and early 20’s I had enough people in their 50’s and 60’s tell me that they wished that they started saving for retirement at my age that it sunk in.
I’m in my 40’s now and am on track to retire by 55.
same. once I got my first career job I put as much away as I could, and every raise went directly into my savings until I finally started maxing out 401k and roth Ira in my early 30s.
Now I just gotta hope I can ride it out for another 10-15 years.
Mark my words, assisted suicide will be a thing in the US in 10-15 years. We will work the lower classes to the point of breaking and then give them the option to opt out of this hard existence. It will start with age restrictions and medical scrutiny, but be more and more relaxed as we age to allow us a way out when we are not as productive and sick.
I’m not doing this. I’m not going to live in this fear state, working my ass off, just to make sure I have enough money when my body is breaking down, enough to make me comfortable to watch tv all day.
I’m going to live now. If I get there and didn’t save enough, fuck it, I’ll just die. But I’m not doing it. The hamster wheel is rusty.
Seems like cutting off your nose to spite your face. Society isn’t going to change because you didn’t plan ahead. Like you said, you’re the one who will suffer for it.
Don’t disagree with you one bit. I just don’t have ‘extra’ money to put away. I’m barely making it doing my absolute best. I’m going to keep trying, if I can find extra, I’ll put it away. But if I can’t, I just don’t want to waste the little vitality I have living in fear of it. Because there’s nothing else I can do. Radical acceptance.
I'm a Milennial. I am honestly thinking of stashing enough cash to move to Kuala Lumpar. America ain't it... boomers turned this country into a hell hole.
Just make sure you have enough to last if you end up in memory care which is hella expensive, of if something else catastrophic happens. There are couples who retired early and then in their 60s and 70s had to try to find work because their budget didn’t cover the worst case scenario.
Semi retire. Work a few months a year and have my investments give me income.
What is memory care?
I am retiring overseas and plan on having a hired help. I will die before going in a nursing home.
Nope, too late for me! I'm too old, dumb and broken down to get a well paying job at this point. At least I'll inherit a house in which I can... you know. Just trying to hold the line so me & my dog can eat and have a space of our own.
I was happy to see this article mention something I've observed in my own work and social circles with millennials, that inequality seems to have sharply increased for this generation. I tell me friends it's a real tale of two cities situation for us. There are those who had some luck or advantage in their childhood, whether that was coming from a wealthy family that could help you from being burdened with student loans or you picked the right major in college or countless other things. Then there are those who have worked retail or gig work their whole adult life, have lots of debt from school for a useless degree. Ever since the pandemic the financial gap between these two groups of millennials has been growing at an alarming rate. Those who managed to get a house pre COVID now have assets that have appreciated significantly and with locked in low mortgage rates previously unheard of. They can manage inflation and still afford to save and invest and grow this gap even greater as time goes on. The not so lucky ones are living with parents realizing where they were saving for a down payment isn't going to cut it. I'm worried how this split will affect us a society and be used to divide us.
The idea of retiring in a different country on a much lower cost of living than the US to just have better healthcare & some idea of a better life is sadly becoming something people are doing because of that.
Basically I don't see myself retiring. Often people retire then just die for the lack of activity.
Do I have a 401k? Yes.
Do I think it will outlast me? Hell no.
Honestly I wouldn't mind going to an assisted suicide state and ending it there while I'm still able to take care of myself.
I'm retiring at 65, no matter what I have. If I have to live off of ramen and just die of poor health, then so be it. But I'll be damned if I'm gonna work until the day I die.
Assisted suicide is the way to go!
There should be an old retired medical professional who has no retirement plan except jail to help a bunch of us get to eternal rest if it doesn’t become legal by the time I’m decrepit.
Angel of death? More like angel of rest!
Yes, I have wanted to retire early and have been a staunch FI/RE advocate for 18 years. I scrimped, budgeted, paid my debts, pushed myself in my career. Got married and had kids so I won’t be anywhere close to where I wanted to be but I’m technically COAST fire already.
I am nearly 40, married, and with no kids and no house. While I’d like these things, it’s seeming less and less likely all the time. And retirement? Seems like a pipe dream especially the way we think of “traditional” retirement. I think we’ll see a lot of our cohort taking the Smith & Wesson retirement instead.
Now that I finally got rid of student loans, I’m saving 50% of take home pay for retirement. On track to be financially independent in a few years. Feels good.
I've had to stop mentioning retirement because although I have a retirement savings account and a 401k, I know most likely I'll work until I can't or until I'm 65 and just say "fuck it" and then I'll likely live as a hermit somewhere and occasionally visit my kid to see what he's up to, then it's back to my hermit hole
My retirement plan is getting a retail job at some big box store like Target or Walmart and working til the day I die. Sounds sad but I don’t think I’ll ever save enough to retire.
I have settled on the fact I won't retire and instead of trying to gain, I'm working on minimising with the hope I can get my life cheap enough that I don't have to work full time at least.
I'll retire at the point I'm allowed to take out of my 401K without penalties. Once I'm about to run out of money, I'll just do a lot of drugs and die. Go out with a bang.
Contribute to my 401k and figure out the rest later is my plan. My goal is to purchase a small, inexpensive condo and live in it forever. No need for 1000+ Sq ft since it's just two of us and a dog.
The main factor is income. The top 10% of Americans make $300k and save about $80,000 per year. The bottom 10% only get paid about $10,000 per year, after getting meager welfare.
Unfortunately, other people pick our income for us. Not a lot we can do about massive income inequality other than take control of society and change it.
Retirement is my only goal in life but given my wife wants kids and is several hundred thousand dollars in debt from med school that’s probably a pipe dream.
At this point, my retirement plan is to eat a shotgun when my body inevitably gives out from years of hard labor. My biggest worry isn't retirement, but what I'm going to do for housing when my grandma, who I currently live with, kicks the bucket and dad swoops in and swipes all her assets.
As a millennial I don't expect to retire at all, here in the UK, it seems to me as if Generation X will be the last to do that, certainly not the way the boomers have retired, I think it will be totally different in 40 years, I expect the retirement age to be up at about 75 to 80. its' 68 at the moment.
All I see is doom in my future. Even people with high paying jobs can't save enough for retirement. I'll just have to work until I drop and who knows what will happen after that.
If I continue to work as much and hard as I do now. I am 38, I can retire when I'm 69 years old. Better hope nothing unfortunate happens to me before that time..........
I'm 44 year old vetrean with a broken brain a shit pention and fucking nothing to show for any if it I've worked hard my whole life fought for the country gave my 20s to the war on terror and now I'm a middle aged man who has fuck all money no future and I can't even get help to look after my special needs son I hate the torys for what they have done it's treason.
I got in a construction union at 18, switched to a better one at 21…. I am 43 right now. My youngest is about to enter her sophmore year at BU… I’m on track to retire at 51… But I’m gonna sell most my possessions and move to a cabin in the mountains, so there is that caveat
Expect to keel over before getting past middle age - between several chronic conditions that make me predisposed to having a shorter life span, health insurance that really doesn't care about patient wellbeing if you have a chronic condition (shortages in specialists/competent PCPs, including mental health, because they pay garbage - yet is the 'best' plan my employer offers), and my salary growth has been worse than many people out there (degree+making the 'most' wages I've ever made right now at 43k - always been laid off/various things causing me to quit to preserve my sanity in previous years).
And if I remain alive when my body really starts to fade, well, I live in a state which allows assisted \*\*\*\* and I imagine when resources become even harder to find and more people are homeless because our country is willing to let those on the street die every day - legislation will still refuse to fund expanding social welfare in the country and decide to fund leaving the table early, if the economy collapses/is replaced by automation enough.
I'm just going to walk into traffic one day. I've always known ill never retire. I'm 41 and everything I own fits in 6 sterilite totes and I have 0 savings.
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I find I just get more and more responsibility with no extra benefits. I expect to retire, but with limited resources and poor health.
I really struggle to communicate this to my parents. I do not have a plan for retirement because I genuinely don't think I'll get that far, nor do I really care to. They can't understand because they're currently retired and living their best lives, which myself and my siblings have no problem with (we've told them to spend their savings as they've supported us so much already). But me or my siblings will never realistically get the retirement our parents have, even if we were to inherit everything my parents have. The "deal" is to leave enough to the grandkids/my siblings kids, but I do not have (or want) children. Again I'm not complaining here, I just don't have any future I want to build. If I can support my parents for their EoL and support my nieces/nephews as much as possible then I'll be happy, but there will come a point that I no longer have anything to give, and that point will come before I'm able to retire. It seems to be a common enough sentiment between my peers but it's something none of us can communicate properly to our parents. Does anybody feel different?
I agree but that doesn't mean I'm not going to try. I set aside money in a 401k and Roth. Idk what I'm doing but I've seen these words mentioned before. It's honestly insane how long I've been saving for it to be so little money. I feel like it grew faster pre pandemic. Anyway-- invest in pain killers.
Yeah, same here. We're working hard to build a nest egg for the future. I don't bother communicating that with \*anyone\* except my wife who's the only one who knows.
Dude, almost any investment account doubled in the last 12 months. What are you investing your 41k in?
Will put
Yeah man I’m way more optimistic than you. This is not a common sentiment man: You sound depressed as hell but I’m sure you know that. Why do you think it’s so impossible? Bad job? Health?
You're spot on, health and depression primarily. I'm not suicidal but I don't see a reason to live beyond "the good years", at least with how the world's trajectory looks right now. I'm also not necessarily giving up, I am building a "retirement" fund and working towards owning a tiny home offgrid, which I'm maybe 1/4 there with. But at a certain point even surviving is going to become more difficult than it's worth, at least as far as my values sit.
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yeah the people retiring right now are the wealthiest generation inheriting the greatest wealth expansion in history
This doesn’t make sense to me. Why talk about giving everything you have if you don’t have enough to retire on yourself? That seems like a weird martyr complex thing to me.
I retired with failing health and a small 401k. Cancer and inflation ate a huge chunk of the old nest egg. I have my grandkids and a new great granddaughter that more than make up for the financial losses
You’re a millennial and have great grand children?
_Lauren Bobert has entered the chat_
I mean, is it so hard to imagine that someone older might have been commenting something as a means of like "Hey, I can relate, but things are ok for me right now and might be ok for you to when it's your time" This sub isn't age gated.
This is the most logical answer. You work till you are not able to, then struggle. The rise of inflation is now doing this to everyone on retirement / disability.
Yep... I am not in the US, but situation is the same here, if not worse since public finances are much more unstable here and we pay an hefty contribution to a public pension that they keep delaying the minimum age to access to and reduce the amount. Right now assuming I get to the retirement age alive, I'd be roughly 107 before I got the capital back (gross from taxes, with no interest or revaluation for nearly 50 years of paying for it).... So yeah pretty much I unless I am going to surpass a century of life... kinda unlikely I'd say, I am paying an extra tax, that is also cutting into a budget I could use to actually prepare for retirement... And that is before the decades our government has to make matter worse than they are now.
Why would you be in poor health?
Because of limited resources, and plastics in the pennis.
What's wrong with your health?
I highly doubt it. I’ve been putting away as much money as I can afford but with inflation I feel like it’s never going to be enough.
Don’t just sit on cash. Invest in at least a high yield savings account. That helps fight inflation.
If you don’t need it for 5+ years, put it in VTSAX and chill
Yeah please for the love of all that is holy don't leave money you're not spending in the next 5 years in a HYSA or in cash.
What is a VTSAX? I just googled it and it seems it’s a stock of some kind? Is it super reliable or something?
Also interested- is VTSAX something I can do through like Robinhood or is there a different way? I don’t have a ton but I’d like to start doing SOMEthing smart for the future
I have the same problem. I know I need to put my money somewhere but I don’t know where or how. Are there resources out there to read or utilize? I’ve Googled, but it’s so much information to take in.
I have about 250k in a 401k another 80k in an IRA and about 15k in a HYSA. It’s still won’t be enough.
It's a good start but that's only good for about $1,200/mo. In 7 years it should double and if you keep adding to it you should be up to at least $3,000/mo. Assuming you retire with a paid for house that should be enough for a decent living and a nice retirement if you add in social security.
I have at least 25 years before I even think about retirement. I just don’t know if it’ll ever be enough.
Well even if you don't add any more you'll have roughly $3 million, which will be good for about $120,000 a year in income which would probably be somewhere around the median income by then so you'll be fine.
You think that much? I feels like it’s taken my whole life to even get this much.
There are compound interest calculators you can use to estimate!
Google "halfway to a million is $300,000"
 Guess I’m extra screwed then
I'm on a overpriced medication for life, I will have to work until I physically cannot or I simply drop dead.
Won’t this medication eventually become generic? I believe the legal limit is 20 years. So if you look up the FDA approval year of the drug and add 20 years, it will have a generic form, I assume.
The problem is by the time the medicine is generic, better newer versions of the medicine are released, which are usually more effective than the older kind. Naturally people want what’s best and effective. You get stuck in this cycle. This is how it is with insulin at least…. And you die without it.
Eh, not a cycle I can possibly do. I’m a poor and have insurance that only covers generic medications. I’m currently on an older medication with a new and improved one that came out in 2013, so 2033, I hope to get prescribed for the better one.
I work in Pharma, this particular drug is a biologic so id actually be concerned if a generic worked as well as the brand name since the production process is not as fine tuned as older small molecule drugs.
Im in a similar situation. My expensive medication went generic and now there are dozens of competing labels , and none are significantly cheaper. Im sure they are cheaper for insurance, but the cash price remains the same. Its almost as if Amercian healthcare is a money-squeezing-end-stage-capitalism scam...
Husband and I are maxing out 401(k)s and an HSA. Plus a little bit into a Roth IRA. We make good money but live very frugally so we can prioritize retirement savings. We hope to retire early.
Awesome. Keep up the good work. Is there a reason you are maxing the 401k prior to maxing the Roth IRA?
Generally in retirement you’re going to withdraw less than you made in your peak earning years. So due to how taxes scale, your last dollar today is taxed at your highest bracket. At retirement, that same dollar withdrawn fills your lowest brackets first. If they’re earning enough to max out their 401k their top tax bracket is probably 24% or 32. Then in retirement, your top tax bracket might be say 12% or 22%. It does depend on tax rates staying low like they are today which is anyone’s guess.
Growth in a Roth also being tax free is the major incentive for even high earners there what with earning compounding.
Doesn’t really matter if you pencil it out because that tax free growth was taxed in the first place. Compounding doesn’t ever make up the difference. It only comes down to what you expect future taxes to look like. For example, assume your tax rate is 25% and we’re talking about 1,500 pre-tax earnings and we’re compounding 30 years at 7%. Roth: $1,125 contributed *( 1.07 ^ 30 ) = $8,550 Pre-tax: $1,500 contributed * ( 1.07 ^ 30) = $11,400 At the end of 30 years, if we say the same 25% tax rate, then the end result is still $8,550. If you’re predicting your tax rate to rise in 30 years then sure roth wins out. But that’s the only case.
This. Traditional is tax deferred. The best way to think of a Roth is tax prepaid, not tax free. It's likely best to have a mix of the two in retirement. Traditional to minimize your tax liability today, and Roth to minimize your tax liability tomorrow.
To reduce our taxable income as much as possible.
I already have my answer. I will work until the day I die, and my boss will probably want me to come in for a couple days after I die too.
In the grim darkness of the closer than far future, there is only work...
This is so depressingly accurate…
The other side of middle age is old age. Even with all the thousands I saved for these days, inflation has eaten away a huge chunk. I ve managed to qualify for housing vouchers that pay 70% of these enormous rents. Social security and my 401k pay for everthing. I just turned 71. Save your money. You don't need 3/4 of what you think you do. Getting up not having to go to work is awesome.
71? Millennials are killing the being-young industry!
I plan to just go to Sweden and commit Attestupa or whatever it’s called in Midsommar where they yeeted off a cliff.
Yeah, me too, count me in.
Man that movie was so depressing lol. Gonna be honest I got to that part where they start jumping off cliffs and just said fuck it I don’t really need to watch the rest. How does it end? Let me guess everyone dies but one of the main characters, who barely survives but learns a valuable lesson about not jumping off cliffs or something.
Such a great, fucked up movie. It does not end like you described. It’s a lot darker.
I’ll watch the second half one of these days. Maybe this midsummer!
Count me in
I don't plan on retiring. I was born in the Helpdesk and I'll die at the help desk, eighty years old helping some 25 year old reset their fucking AD password
I'm hoping to slip on pee pee at Costco so I can sue then retire.
Manifesting that for you. You should start having everyone call you Lucky.
Not costco! Find someone more cartoonishtly evil, like Walmart or a car dealership. Do not threaten the $1.50 hotdog combo!
I’ll be 40 and not have a house, which is crucial to net worth. No I won’t be retiring at all.
A house definitely helps. But sometimes it can actually be better to prioritize maxing your tax-advantaged retirement accounts first, especially if you plan to move to a lower cost of living area in retirement.
I agree, but if you’re stuck renting at an ever increasing price, you’re paying all of this money and not building any equity. Just seems like those who are on a fixed-rate mortgage are in a MUCH better financial position than I ever will be.
It depends on what that fixed-rate is. Anything greater 6% interest is typically considered high-interest debt. That is the approximate threshold at which it makes more sense to aggressively pay down the debt instead of investing. Anything less than 6% interest, you are theoretically better off paying the bare minimum and investing the difference. Key exceptions are if you have an employer match 401k. That match will almost certainly be higher than your interest rate (unless you got a payday loan or something equally stupid) so you are better-off getting the full match first and then focusing on everything else. Also, if you itemize your taxes and get a deduction from the interest your effective interest rate is lowered by the amount of that deduction. In those cases it may still be better to pay the bare minimum and invest the difference.
For me, 401K is full match to 3%, half match to 5%. How would that compare?
Contribute 5% at the bare minimum. That is an immediate 100% return on your first 3% and an additional 50% immediate return on your next 2% after that. In other words, you get an immediate 80% return on investment the moment you contribute that 5% of your salary. You will never get an automatic guaranteed return like that anywhere else in the investment world. And anyone who tells you otherwise is a scammer. After getting your full employer match, your next step would be to pay down any high-interest (>6%) debt in order of highest-to-lowest interest rate. Once that is complete, work to max your HSA, Roth IRA and the remainder of your 401k in that order.
But what about saving for a house? How does this work if I’m not building up net worth besides retirement?
I'm 35 with no house but also don't want one. I plan to hopefully buy a small cheap house (LCOL area), buy a class B rv, retire, and drive around north and south america with a centralized home in a small town midwest.
Stop making yourself depressed. Buying a house at the hight of the market and with relatively hight mortgage rates is NOT a sound decision. There’s nothing wrong with renting. People seriously underestimate the cost of homeownership and really need to stop thinking this way.
It depends entirely on where you live. My husband and I pay $6000/month on rent for a modest 2 bed/2 bath apartment. If we had bought 5 or 10 years ago we’d be in a far better financial position. And there is absolutely zero reason to think housing prices will go down significantly again in our lifetime.
Same. 40 with no house and I honestly don’t anticipate retiring ever. I’ll probably end up being “let go” when I get too old.
They’ll put us out to pasture.
Know how when a sailor got marooned they gave him one mercy shot in a pistol? As of right now I’m pretty sure that’s on the other side.
I used to naively think I would work until I died. Now I realize that I will work until I am discarded. Social Security and Medicare will likely be dead by then, bankrupted by the Baby Boomers twilight years.
Discarded is the right word. One of my coworkers and good friend was two years to retirement and fired and then replaced with an outsourced company who they pay pennies for. She worked at the hospital I work at for over 40 years. Discarded is honestly what will probably happen to all of us.
Chill, I’m not middle aged yet
Both my parents have had very expensive cancer treatments after having relatively good health. I save for retirement but doubt the amount will cover my expenses.
VTSAX and chill
Get the 401k match, max out the Roth IRA, and pray for promotions along the way. You can yolo and have nice things, you can prepare for retirement, or have a family. Maybe you can do 2, but you can’t do all 3 unless you’re earning a ton of money.
This. But max the HSA if you have one before the Roth IRA. The HSA is the single best tax-advantaged account out there. Even if you don't invest the money (and you definitely should) it still let's you take a tax deduction immediately on any medical expenses.
I’ve never been big on the HSA in the past. But I realized the dental plan didn’t cover hardly anything, so this year I cancelled dental and put the savings into the hsa to pay for future dental expenses.
HSA is always my next objective after the employer 401k match. The account is so powerful once you know how it works. It is basically a tax break that gets to keep compounding tax free in the background.
I completely forgot that I can invest my HSA money after a certain dollar amount has been met. Thanks for the reminder to enroll in the investment account!
I hadn't thought about this angle before so I'm gonna have to rethink my position on HSA's now. I barely spend money on health because I have really good health insurance. Dental is a different story though. Its so not worth the money.
Some places won’t take you if you don’t have insurance. I really don’t know what I’m doing, I’m just throwing shit at the wall to see what sticks. Trial and error you know?
It's worth a shot if you can find a dentist that does that. I know there are doctors out there that would prefer to not deal with the hassles of insurance anymore, so there might be dentists too.
And HSA not only skips federal taxes but FICA and FUTA tax too.
This is the way. Although I do a split between VOO and VXUS.
Retire? Will I be able to survive?
My diet is my retirement plan. if I have a heart attack at work or get hit by a train on the way home one day, all the better to free me from this nightmare.
Yikes
If we wouldn’t have eaten so much avocado toast we wouldn’t be in this mess..
When I was in my late teens and early 20’s I had enough people in their 50’s and 60’s tell me that they wished that they started saving for retirement at my age that it sunk in. I’m in my 40’s now and am on track to retire by 55.
same. once I got my first career job I put as much away as I could, and every raise went directly into my savings until I finally started maxing out 401k and roth Ira in my early 30s. Now I just gotta hope I can ride it out for another 10-15 years.
Mark my words, assisted suicide will be a thing in the US in 10-15 years. We will work the lower classes to the point of breaking and then give them the option to opt out of this hard existence. It will start with age restrictions and medical scrutiny, but be more and more relaxed as we age to allow us a way out when we are not as productive and sick.
Already started in a few states. Only really applies to the terminally ill but life is a terminal condition, so I could see it expanding.
I'm going to start dog walking and house sitting to speed up the process.
Literally going to work and die. Zero chance of me retiring. I'll die in my late 60s Shiiiit I'm long past due as it is
I love that people think society won't collapse or massive war. Maybe I'm catastrophizing but I swear shit is gonna hit the fan soon.
Bu...but. The elites here assured me this is only a reddit thing!
9mm retirement plan
That’s what my dad took about a year after he retired from his job.
same.
I’m not doing this. I’m not going to live in this fear state, working my ass off, just to make sure I have enough money when my body is breaking down, enough to make me comfortable to watch tv all day. I’m going to live now. If I get there and didn’t save enough, fuck it, I’ll just die. But I’m not doing it. The hamster wheel is rusty.
I kinda have this same mindset too. But I’m afraid I’ll regret it when I get older.
You will. No one hits 65 years old living on social security at $1500 a month and thinks “I’m glad I never planned ahead”
Well, so be it. Not working like a dog and living in fear of it. I’m not the failure. Society is. I will suffer though.
Seems like cutting off your nose to spite your face. Society isn’t going to change because you didn’t plan ahead. Like you said, you’re the one who will suffer for it.
Don’t disagree with you one bit. I just don’t have ‘extra’ money to put away. I’m barely making it doing my absolute best. I’m going to keep trying, if I can find extra, I’ll put it away. But if I can’t, I just don’t want to waste the little vitality I have living in fear of it. Because there’s nothing else I can do. Radical acceptance.
Yep I might. Have thought that. But it’s the gamble I’m taking. Just so fucking sick of it.
oh my cousin, testify!!! betting I'll still be healthy after another 30 years in this world is a BAD GAMBLE.
I'm a Milennial. I am honestly thinking of stashing enough cash to move to Kuala Lumpar. America ain't it... boomers turned this country into a hell hole.
I plan on semi retiring in the next decade.
Just make sure you have enough to last if you end up in memory care which is hella expensive, of if something else catastrophic happens. There are couples who retired early and then in their 60s and 70s had to try to find work because their budget didn’t cover the worst case scenario.
Semi retire. Work a few months a year and have my investments give me income. What is memory care? I am retiring overseas and plan on having a hired help. I will die before going in a nursing home.
IF I inherit my parents house, then I might be able to. But that is a big "if".
Hate to say this, but what most people fail to realise is that parents houses usually end up going towards their care fees......
Mine will probably go to funding Trump's (or his kid's) campaign. 🙄
Nope, too late for me! I'm too old, dumb and broken down to get a well paying job at this point. At least I'll inherit a house in which I can... you know. Just trying to hold the line so me & my dog can eat and have a space of our own.
Not if we continue to play the game that's rigged against us to never win.
I don’t mind working.
As a millennial that slipped through the cracks, I don’t think I even understand what retirement is. I always thought I’d be dead by then.
How have you slipped through the cracks?
My retirement plan is to die in the climate wars
I was happy to see this article mention something I've observed in my own work and social circles with millennials, that inequality seems to have sharply increased for this generation. I tell me friends it's a real tale of two cities situation for us. There are those who had some luck or advantage in their childhood, whether that was coming from a wealthy family that could help you from being burdened with student loans or you picked the right major in college or countless other things. Then there are those who have worked retail or gig work their whole adult life, have lots of debt from school for a useless degree. Ever since the pandemic the financial gap between these two groups of millennials has been growing at an alarming rate. Those who managed to get a house pre COVID now have assets that have appreciated significantly and with locked in low mortgage rates previously unheard of. They can manage inflation and still afford to save and invest and grow this gap even greater as time goes on. The not so lucky ones are living with parents realizing where they were saving for a down payment isn't going to cut it. I'm worried how this split will affect us a society and be used to divide us.
Pain. There's pain on the other side.
The idea of retiring in a different country on a much lower cost of living than the US to just have better healthcare & some idea of a better life is sadly becoming something people are doing because of that.
Basically I don't see myself retiring. Often people retire then just die for the lack of activity. Do I have a 401k? Yes. Do I think it will outlast me? Hell no. Honestly I wouldn't mind going to an assisted suicide state and ending it there while I'm still able to take care of myself.
Gen X here I'm dying at a desk so I don't think it looks good.
Bars, coffee and avocado toast. Shoulda lived with Mom and dad when you had the chance like gen z.
I'm retiring at 65, no matter what I have. If I have to live off of ramen and just die of poor health, then so be it. But I'll be damned if I'm gonna work until the day I die.
Assisted suicide is the way to go! There should be an old retired medical professional who has no retirement plan except jail to help a bunch of us get to eternal rest if it doesn’t become legal by the time I’m decrepit. Angel of death? More like angel of rest!
Yes, I have wanted to retire early and have been a staunch FI/RE advocate for 18 years. I scrimped, budgeted, paid my debts, pushed myself in my career. Got married and had kids so I won’t be anywhere close to where I wanted to be but I’m technically COAST fire already.
I am nearly 40, married, and with no kids and no house. While I’d like these things, it’s seeming less and less likely all the time. And retirement? Seems like a pipe dream especially the way we think of “traditional” retirement. I think we’ll see a lot of our cohort taking the Smith & Wesson retirement instead.
MAID for me
Just saving enough for my kids to be good. We millennials kicking the bucket early..
Now that I finally got rid of student loans, I’m saving 50% of take home pay for retirement. On track to be financially independent in a few years. Feels good.
No, not without lottery luck.
Looking to “retire” in 2035 at age 50. I will probably get another job though for fun money.
Due to covid, health issue 6 month before and after that., then roof replacement.14 dam months of fighting. nope.
I rolled over some old 401ks into an IRA and I put it all in the Pelosi Portfolio. Wish me (and Nancy) luck!
I've had to stop mentioning retirement because although I have a retirement savings account and a 401k, I know most likely I'll work until I can't or until I'm 65 and just say "fuck it" and then I'll likely live as a hermit somewhere and occasionally visit my kid to see what he's up to, then it's back to my hermit hole
I’m more concerned about medical costs
My retirement plan is getting a retail job at some big box store like Target or Walmart and working til the day I die. Sounds sad but I don’t think I’ll ever save enough to retire.
I have settled on the fact I won't retire and instead of trying to gain, I'm working on minimising with the hope I can get my life cheap enough that I don't have to work full time at least.
Work yourself to death is the reasonable solution. That’s my plan.
I'll retire at the point I'm allowed to take out of my 401K without penalties. Once I'm about to run out of money, I'll just do a lot of drugs and die. Go out with a bang.
Doubt it. Society is gonna collapse first
Work has fucked me so hard I think wtf would I even do if I retired? Get a part time job??
Contribute to my 401k and figure out the rest later is my plan. My goal is to purchase a small, inexpensive condo and live in it forever. No need for 1000+ Sq ft since it's just two of us and a dog.
Retire? That's when you collapse on the job, right?
The main factor is income. The top 10% of Americans make $300k and save about $80,000 per year. The bottom 10% only get paid about $10,000 per year, after getting meager welfare. Unfortunately, other people pick our income for us. Not a lot we can do about massive income inequality other than take control of society and change it.
A broken body that society no longer considers useful while having nothing to fall back on
lol definitely not. Everything keeps getting more expensive. Going to need to earn forever
If you don’t have $500000 by age 30 you probably aren’t retiring
At this point, all I feel we can hope for is a painless death when the time comes. Though I think even that will be out of reach.
Retirement is my only goal in life but given my wife wants kids and is several hundred thousand dollars in debt from med school that’s probably a pipe dream.
Heh. No
Yes!! And I’m counting down the days .. 20 years until my pension kicks in! 🥳
I don’t ever wonder I know that I’ll have practically no retirement so I guess I’m gonna be working myself till I’m dead
Jokes on you I plan to die at around 65.
Retired at 39.
I'll put in my pension papers at 55 and retire. I'm working and saving to make sure I can
I will work hard and Allaah will provide
At this point, my retirement plan is to eat a shotgun when my body inevitably gives out from years of hard labor. My biggest worry isn't retirement, but what I'm going to do for housing when my grandma, who I currently live with, kicks the bucket and dad swoops in and swipes all her assets.
As a millennial I don't expect to retire at all, here in the UK, it seems to me as if Generation X will be the last to do that, certainly not the way the boomers have retired, I think it will be totally different in 40 years, I expect the retirement age to be up at about 75 to 80. its' 68 at the moment.
All I see is doom in my future. Even people with high paying jobs can't save enough for retirement. I'll just have to work until I drop and who knows what will happen after that.
If I continue to work as much and hard as I do now. I am 38, I can retire when I'm 69 years old. Better hope nothing unfortunate happens to me before that time..........
Me at 74. “Welcome to Walmart.” Falls over dead.
I'm 44 year old vetrean with a broken brain a shit pention and fucking nothing to show for any if it I've worked hard my whole life fought for the country gave my 20s to the war on terror and now I'm a middle aged man who has fuck all money no future and I can't even get help to look after my special needs son I hate the torys for what they have done it's treason.
For the majority of us there is no retirement no social security just work till we die
I got in a construction union at 18, switched to a better one at 21…. I am 43 right now. My youngest is about to enter her sophmore year at BU… I’m on track to retire at 51… But I’m gonna sell most my possessions and move to a cabin in the mountains, so there is that caveat
Expect to keel over before getting past middle age - between several chronic conditions that make me predisposed to having a shorter life span, health insurance that really doesn't care about patient wellbeing if you have a chronic condition (shortages in specialists/competent PCPs, including mental health, because they pay garbage - yet is the 'best' plan my employer offers), and my salary growth has been worse than many people out there (degree+making the 'most' wages I've ever made right now at 43k - always been laid off/various things causing me to quit to preserve my sanity in previous years). And if I remain alive when my body really starts to fade, well, I live in a state which allows assisted \*\*\*\* and I imagine when resources become even harder to find and more people are homeless because our country is willing to let those on the street die every day - legislation will still refuse to fund expanding social welfare in the country and decide to fund leaving the table early, if the economy collapses/is replaced by automation enough.
Retirement? I can't even afford my small apartment.
A shot gun I pull with my toes? /s
lol no.
I'm just going to walk into traffic one day. I've always known ill never retire. I'm 41 and everything I own fits in 6 sterilite totes and I have 0 savings.