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At what age should your net worth be the following:
04-21-2022, 08:57 AM
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#31
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I got a much later start saving/investing than I should have, so I'm a little behind. But I'm in my mid-late 30s and net worth is right around $220k. At my current rate of investment (which doesn't account for any raises or bonuses) and assuming a 7% average annual return, my investment accounts alone should be worth over $1.7m by retirement at 65. A little shy of where I'd like to be, but again raises aren't accounted for, and I'd like to get my costs down so I can bump my Roth contributions some. Also 7% may be conservative. 8% would put that number over $2m. And that's not counting cash or home equity. I'm pretty comfortable with the path I'm on.
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04-21-2022, 09:03 AM
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#32
04-21-2022, 12:46 PM
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#33
04-21-2022, 12:49 PM
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#34
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If you're not living pay cheque to pay cheque you're already doing better than 90% of the population
04-21-2022, 12:51 PM
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#35
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Most people are broke and can't manage money for sht
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04-21-2022, 12:59 PM
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#36
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It's actually kind of sad to see how little people save for themselves. The median net worth of people in retirement age is barely over $250k. Not to e-stat, but that is basically nothing as far as something to retire on.
https://www.nerdwallet.com/article/f...t-worth-by-age
https://www.nerdwallet.com/article/f...t-worth-by-age
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04-21-2022, 01:08 PM
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#37
Originally Posted By SpeedCheeser⏩
I'd say my parents are in the $100-200k range in savings. But they've always been fiscally conservative and responsible. They're saving more money than ever with just social security income and no debt. The avg person has little to no retirement savings and end up doing ok when the time comes.It's actually kind of sad to see how little people save for themselves. The median net worth of people in retirement age is barely over $250k. Not to e-stat, but that is basically nothing as far as something to retire on.
https://www.nerdwallet.com/article/f...t-worth-by-age
https://www.nerdwallet.com/article/f...t-worth-by-age
Thinking you need more than a million, even with inflation the way it is, is sort of ridiculous.
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04-21-2022, 01:34 PM
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#38
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Originally Posted By _zman⏩
You're assuming that social security will always be there and/or that it will be enough. I'd much rather know that I'm capable of taking care of myself and being financially free than rely on the government to provide me with everything I need. If they're still handing out checks when I'm old, then awesome, I'll be doing even better.I'd say my parents are in the $100-200k range in savings. But they've always been fiscally conservative and responsible. They're saving more money than ever with just social security income and no debt. The avg person has little to no retirement savings and end up doing ok when the time comes.
Thinking you need more than a million, even with inflation the way it is, is sort of ridiculous.
Thinking you need more than a million, even with inflation the way it is, is sort of ridiculous.
And if you project living until 85, $1m is only enough to get you by on $50k/yr.
Originally Posted By TugOfPeace⏩
Right, no one knows what the future is going to be. But over the last 50 years, the S&P has returned about 10% (7% inflation adjusted) per year. That's the average including all of the major down years and everything. So it's typically what's used for projection, assuming things continue the way they have in the past.People tend to forget in their projections that you're not going to be gaining a specific % of your savings each year; for example your 401k isn't going to compound 7% annually, some years it might be 4%, some years it might even be negative, so those calculators that give your projections 30 years out aren't even accurate.
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04-21-2022, 01:38 PM
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#39
04-21-2022, 01:44 PM
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#40
Originally Posted By SpeedCheeser⏩
Social Security is your own money and it's based on what you put in. I'd never call that a govt hand out.You're assuming that social security will always be there and/or that it will be enough. I'd much rather know that I'm capable of taking care of myself and being financially free than rely on the government to provide me with everything I need. If they're still handing out checks when I'm old, then awesome, I'll be doing even better.
And if you project living until 85, $1m is only enough to get you by on $50k/yr.
Right, no one knows what the future is going to be. But over the last 50 years, the S&P has returned about 10% (7% inflation adjusted) per year. That's the average including all of the major down years and everything. So it's typically what's used for projection, assuming things continue the way they have in the past.
And if you project living until 85, $1m is only enough to get you by on $50k/yr.
Right, no one knows what the future is going to be. But over the last 50 years, the S&P has returned about 10% (7% inflation adjusted) per year. That's the average including all of the major down years and everything. So it's typically what's used for projection, assuming things continue the way they have in the past.
And your calculation isn't correct. If you had $1mil at 65, it doesn't last until 85 with $50k withdrawal rate. That money would still be invested and earning interest. I think you may want to recalculate what you actually need for retirement.
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04-21-2022, 02:31 PM
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#41
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Originally Posted By _zman⏩
You can call it whatever you like, but you would still be dependent on the gov continuing to issue checks to survive, and it's sketch AF. If I could opt out and control my investing myself (which would actually be my money coming back to me) I'd do it in a heartbeat.Social Security is your own money and it's based on what you put in. I'd never call that a govt hand out.
And your calculation isn't correct. If you had $1mil at 65, it doesn't last until 85 with $50k withdrawal rate. That money would still be invested and earning interest. I think you may want to recalculate what you actually need for retirement.
And your calculation isn't correct. If you had $1mil at 65, it doesn't last until 85 with $50k withdrawal rate. That money would still be invested and earning interest. I think you may want to recalculate what you actually need for retirement.
And the example was just for illustrative purposes assuming max conservative approach all cash at retirement for simple math. Obviously that number can change if you keep it invested and earn interest, but how much interest do you think you're going to get? Enough to live off of and preserve the principal? The math gets a little more complicated if you plan to withdraw from principal while it's offset with earning interest.
Originally Posted By TugOfPeace⏩
So 3% < 7%? Thanks for clearing that up.Think of it this way.
Typical calculator, assuming 7% yearly gain:
Age 30: $100,000
Age 31: $107,000
Age 32: $114,490
Age 33: $122,504
Age 34: $131,079
Age 35: $140,255
Age 36: $150,073
Age 37: $160,578
Age 38: $171,818
Age 39: $183,846
Age 40: $196,715
Realistic calculator, assuming various gains (this is actually S&P 500 from 1970 to 1979):
Age 30: $100,000
Age 31: $100,100 - assuming 0.1% previous year
Age 32: $110,900 - assuming 10.79% previous year
Age 33: $128,234 - assuming 15.63% previous year
Age 34: $105,960 - assuming -17.37% previous year
Age 35: $74,468 - assuming -29.72% previous year
Age 36: $97,963 - assuming 31.55% previous year
Age 37: $116,723 - assuming 19.15% previous year
Age 38: $103,300 - assuming -11.50% previous year
Age 39: $104,395 - assuming 1.06% previous year
Age 40: $117,246 - assuming 12.31% previous year
Second calculation is average of 3.2% instead of 7%, but nobody knows where the market will go. Depending on where you start investing, I just have a hard time believing the 7% calculator is realistic.
We've been living in a ridiculous bull market the past decade, can't imagine that will continue. Seeing yearly gains of 20%, with only a few down years of -6%, -1%, etc since 2008.
Typical calculator, assuming 7% yearly gain:
Age 30: $100,000
Age 31: $107,000
Age 32: $114,490
Age 33: $122,504
Age 34: $131,079
Age 35: $140,255
Age 36: $150,073
Age 37: $160,578
Age 38: $171,818
Age 39: $183,846
Age 40: $196,715
Realistic calculator, assuming various gains (this is actually S&P 500 from 1970 to 1979):
Age 30: $100,000
Age 31: $100,100 - assuming 0.1% previous year
Age 32: $110,900 - assuming 10.79% previous year
Age 33: $128,234 - assuming 15.63% previous year
Age 34: $105,960 - assuming -17.37% previous year
Age 35: $74,468 - assuming -29.72% previous year
Age 36: $97,963 - assuming 31.55% previous year
Age 37: $116,723 - assuming 19.15% previous year
Age 38: $103,300 - assuming -11.50% previous year
Age 39: $104,395 - assuming 1.06% previous year
Age 40: $117,246 - assuming 12.31% previous year
Second calculation is average of 3.2% instead of 7%, but nobody knows where the market will go. Depending on where you start investing, I just have a hard time believing the 7% calculator is realistic.
We've been living in a ridiculous bull market the past decade, can't imagine that will continue. Seeing yearly gains of 20%, with only a few down years of -6%, -1%, etc since 2008.
The longer your timeframe, the closer to average the numbers should get. Obviously if you only have a couple years, drastic swings could make huge impacts, but if you're talking several decades, it's a way to estimate a ballpark return. No one has ever said they're going to be completely accurate.
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04-21-2022, 03:00 PM
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#42
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Originally Posted By TugOfPeace⏩
Could be more. Could be less. No one knows. Past performance does not guarantee future results. Seems like a reasonable place to begin for estimating and planning though.derp da derp de derp. my calculation wasn't a couple years, it was 10.
imagine thinking after printing trillions of dollars the past couple years that the market will be at all similar to how it was in the past 50 years
miscers ITT saying they'll reach x million dollars at retirement based on these calculators, yea good luck with that
imagine thinking after printing trillions of dollars the past couple years that the market will be at all similar to how it was in the past 50 years
miscers ITT saying they'll reach x million dollars at retirement based on these calculators, yea good luck with that
You could always try sticking with a high yield savings account and see how that works out for you I guess.
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04-21-2022, 05:52 PM
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#43
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100 and 200k donโt mean much cuz it goes fast . Iโd say 500k by 35 is the most important metric
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04-21-2022, 05:54 PM
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#44
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Originally Posted By JeepBruh⏩
This SRS.500K is the new 100K
Especially with dat dere 350% inflation of prosperity.
Also depends on how you calculate.
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04-22-2022, 08:18 AM
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#45
Originally Posted By SpeedCheeser⏩
Sure, it's a good approach to not be reliant on the money you put in to be paid back. But just lol if you think Social Security or some form of it isn't going to be available with the direction the govt is taking towards more social programs.You can call it whatever you like, but you would still be dependent on the gov continuing to issue checks to survive, and it's sketch AF. If I could opt out and control my investing myself (which would actually be my money coming back to me) I'd do it in a heartbeat.
And the example was just for illustrative purposes assuming max conservative approach all cash at retirement for simple math. Obviously that number can change if you keep it invested and earn interest, but how much interest do you think you're going to get? Enough to live off of and preserve the principal? The math gets a little more complicated if you plan to withdraw from principal while it's offset with earning interest.
And the example was just for illustrative purposes assuming max conservative approach all cash at retirement for simple math. Obviously that number can change if you keep it invested and earn interest, but how much interest do you think you're going to get? Enough to live off of and preserve the principal? The math gets a little more complicated if you plan to withdraw from principal while it's offset with earning interest.
It's simple math, but not accurate at all. A simple formula incorporating withdrawal rate and interest gains can be done in Excel. Sounds better than guesstimating what you think you need in retirement.
It's bad advice telling people they need millions in retirement to retire. BRB saving millions for retirement and die of a heart attack at 60 and meanwhile didn't live any of your life, cuz saving for retirement. The vast majority of retirees do not having millions and end up just fine and dead with more money than they needed. My co-worker is approaching 60 with 2mil in her 401k. She can retire right now and thinks she can't. That's just insane to me. How many people out there like this? No hobbies? Bad spending habits? When is enough money enough?
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04-22-2022, 08:20 AM
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#46
04-22-2022, 08:26 AM
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#47
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Originally Posted By Bodhy⏩
if you got 70k in cash just sitting in your checking account....you dun goof'd.I'm early 30s, and I don't have 100k in the bank. About 70% of that, but this is purely cash in the bank; the balance of my bank account. Not accounting for the entirety of everything I own, though.
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04-22-2022, 08:37 AM
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#48
Originally Posted By twovalvekid⏩
It's better than not having $70k in the bank. Not the wisest thing to have cash laying around doing nothing, but I wouldn't say they're a goof for it.if you got 70k in cash just sitting in your checking account....you dun goof'd.
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04-22-2022, 08:45 AM
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#49
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Originally Posted By _zman⏩
Or he could have bought Netflix sofi zoom shopify or a gazillion other stockw lasts year that were top picks and sit on 20kIt's better than not having $70k in the bank. Not the wisest thing to have cash laying around doing nothing, but I wouldn't say they're a goof for it.
I got about most of my worth invested usually hoover around 150k cash in the bank.
As far as the how much should you have it all depends. If you are going to school to be a brain surgeon you ain't gonna have squat till you get out of school when you are in your 30,s once you start working it will take off like a rocket.
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04-22-2022, 08:45 AM
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#50
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Originally Posted By _zman⏩
Yes. But this is the misc, so you need to be extra to get a point across. That 70K has probably been there for a year+. Given inflation...oofIt's better than not having $70k in the bank. Not the wisest thing to have cash laying around doing nothing, but I wouldn't say they're a goof for it.
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04-22-2022, 08:51 AM
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#51
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Originally Posted By _zman⏩
lol, you're not entirely wrong. At the rat we're going I'm at a greater risk of them floating ways to take or further tax my savings than ending social programs.Sure, it's a good approach to not be reliant on the money you put in to be paid back. But just lol if you think Social Security or some form of it isn't going to be available with the direction the govt is taking towards more social programs.
It's simple math, but not accurate at all. A simple formula incorporating withdrawal rate and interest gains can be done in Excel. Sounds better than guesstimating what you think you need in retirement.
It's bad advice telling people they need millions in retirement to retire. BRB saving millions for retirement and die of a heart attack at 60 and meanwhile didn't live any of your life, cuz saving for retirement. The vast majority of retirees do not having millions and end up just fine and dead with more money than they needed. My co-worker is approaching 60 with 2mil in her 401k. She can retire right now and thinks she can't. That's just insane to me. How many people out there like this? No hobbies? Bad spending habits? When is enough money enough?
It's not intended to be accurate. It's a conservative way to make some long term projections using back of the envelope math. What do investments that you would hold in retirement and withdraw from even pay out? 2-3%? Honest question, because I don't even really know. But at 3% the number changes from $50k/yr to ~$65k/yr over 20 years. Not an insignificant difference for sure, but not huge or lifestyle shifting either.It's bad advice telling people they need millions in retirement to retire. BRB saving millions for retirement and die of a heart attack at 60 and meanwhile didn't live any of your life, cuz saving for retirement. The vast majority of retirees do not having millions and end up just fine and dead with more money than they needed. My co-worker is approaching 60 with 2mil in her 401k. She can retire right now and thinks she can't. That's just insane to me. How many people out there like this? No hobbies? Bad spending habits? When is enough money enough?
I'm not trying to tell anyone else what they NEED, but what I WANT for myself. If you want to talk actual needs, then accurate calculations start to become much more important. Personally, I want to be at a level that it doesn't matter and I don't have to think about it ever again. 1%? 4%? Doesn't matter, I have enough. In your coworker's case, $2 mil at 60 would certainly be plenty to retire on. Maybe ask what her reasoning is and see if you can help her. And no, I don't recommend completely forgoing experiencing life in your earlier years. There's a balance to saving for the future while enjoying wealth in the present. But living paycheck to paycheck and blowing everything you have today isn't prudent.
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04-22-2022, 08:53 AM
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#52
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Originally Posted By Bodhy⏩
If most of your net worth is sitting in cash in the bank (forget about material possessions) you are doing it wrong. Money has to be put in a place where it can grow.....no shrink.I'm early 30s, and I don't have 100k in the bank. About 70% of that, but this is purely cash in the bank; the balance of my bank account. Not accounting for the entirety of everything I own, though.
04-22-2022, 08:56 AM
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#53
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I always felt like a great stretch goal for someone coming from middle America (ie no inheritance but 2 parent household and education) would be $1M liquid by age 30. That should be the stretch goal for anyone starting out around 18.
04-22-2022, 09:05 AM
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04-22-2022, 09:17 AM
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100k - 25-35
200k - 30-40
500k - 35-45
1 M - 40-50
Multi M - Whenever possible
For non-living investments like a house. If you don't own a house, take off 5 or more years on each. But the range for each is really 1-100yrs. Depends on what you want and where you live.
200k - 30-40
500k - 35-45
1 M - 40-50
Multi M - Whenever possible
For non-living investments like a house. If you don't own a house, take off 5 or more years on each. But the range for each is really 1-100yrs. Depends on what you want and where you live.
04-22-2022, 09:17 AM
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#56
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Originally Posted By donblaximus⏩
Sounds like a good stretch goal in that I don't know if this would be achievable for the majority of people coming out of that situation and with parents who aren't also functioning at a high level professionally/financiallyI always felt like a great stretch goal for someone coming from middle America (ie no inheritance but 2 parent household and education) would be $1M liquid by age 30. That should be the stretch goal for anyone starting out around 18.
I didn't even fully appreciate long-term consequences etc until I was 25, and then it was like a switch flipped in my brain. People who come from affluent white-collar families, have the correct influences early in life around this stuff, they can likely get the ball rolling more quickly and have a better shot at this
Don't even necessarily need an inheritance, but having parents and family who work as professionals and understand business/finance would be a huge advantage here in terms of getting you started down the correct path earlier in life
04-22-2022, 09:31 AM
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#57
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Originally Posted By Anachron⏩
Using purchasing power parity for local currency would probably make more sense and would better capture the quality of life you'd be able to provide for X amount, but could look at it a bunch of different waysAnd then you have to think about that the $1 million would be in real money, not monopoly money beaverdollars.
04-22-2022, 10:49 AM
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#58
Originally Posted By twovalvekid⏩
If your net worth is $700k, that's only 10% cash tho. And at times of high inflation, that only effects the money you spend. Eventually prices would return to reasonable levels and you're only losing about 3% annually again on the money you have saved, correct?Yes. But this is the misc, so you need to be extra to get a point across. That 70K has probably been there for a year+. Given inflation...oof
Originally Posted By Destor⏩
A financial advisor reviewed my assets and told me he wished his kids saved as much as I had saved at 27. Some people are just stubborn with saving money. A switch is flipped, like you say, luckily it happened to me at about 23.Sounds like a good stretch goal in that I don't know if this would be achievable for the majority of people coming out of that situation and with parents who aren't also functioning at a high level professionally/financially
I didn't even fully appreciate long-term consequences etc until I was 25, and then it was like a switch flipped in my brain. People who come from affluent white-collar families, have the correct influences early in life around this stuff, they can likely get the ball rolling more quickly and have a better shot at this
Don't even necessarily need an inheritance, but having parents and family who work as professionals and understand business/finance would be a huge advantage here in terms of getting you started down the correct path earlier in life
I didn't even fully appreciate long-term consequences etc until I was 25, and then it was like a switch flipped in my brain. People who come from affluent white-collar families, have the correct influences early in life around this stuff, they can likely get the ball rolling more quickly and have a better shot at this
Don't even necessarily need an inheritance, but having parents and family who work as professionals and understand business/finance would be a huge advantage here in terms of getting you started down the correct path earlier in life
My own sister started making some serious bank and spending a lot of it on dumb chit. I gave her all the advice in the world because she asked for it, but it went in one ear and out the other. Some people would rather spend than save. And I understand her sentiment to buy what she wants now, especially after growing up poor.
Originally Posted By SpeedCheeser⏩
What's the point in not being accurate as possible?It's not intended to be accurate. It's a conservative way to make some long term projections using back of the envelope math. What do investments that you would hold in retirement and withdraw from even pay out? 2-3%? Honest question, because I don't even really know. But at 3% the number changes from $50k/yr to ~$65k/yr over 20 years. Not an insignificant difference for sure, but not huge or lifestyle shifting either.
I'm not trying to tell anyone else what they NEED, but what I WANT for myself. If you want to talk actual needs, then accurate calculations start to become much more important. Personally, I want to be at a level that it doesn't matter and I don't have to think about it ever again. 1%? 4%? Doesn't matter, I have enough. In your coworker's case, $2 mil at 60 would certainly be plenty to retire on. Maybe ask what her reasoning is and see if you can help her. And no, I don't recommend completely forgoing experiencing life in your earlier years. There's a balance to saving for the future while enjoying wealth in the present. But living paycheck to paycheck and blowing everything you have today isn't prudent.
I'm not trying to tell anyone else what they NEED, but what I WANT for myself. If you want to talk actual needs, then accurate calculations start to become much more important. Personally, I want to be at a level that it doesn't matter and I don't have to think about it ever again. 1%? 4%? Doesn't matter, I have enough. In your coworker's case, $2 mil at 60 would certainly be plenty to retire on. Maybe ask what her reasoning is and see if you can help her. And no, I don't recommend completely forgoing experiencing life in your earlier years. There's a balance to saving for the future while enjoying wealth in the present. But living paycheck to paycheck and blowing everything you have today isn't prudent.
So don't put 100% in assets that churn out 2-3%. Think about it. You'd only want money you're spending in the next few years to be in conservative assets that are at 2-3%. The rest that you don't need in 10-20 years could be left in the S&P 500. But that's just what I would do.
Not to mention the option of withdrawing from an HSA whenever you would want to as well. The strategy entering into retirement and during retirement is a lot more complicated than you think. If you want to do it right and efficiently.
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04-22-2022, 11:02 AM
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#59
Originally Posted By twovalvekid⏩
I dun goofed. Didn't start investing until ~30yo. I think the younger generation has easier access now to invest.if you got 70k in cash just sitting in your checking account....you dun goof'd.
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04-22-2022, 12:45 PM
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#60
- donblaximus
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- donblaximus
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Originally Posted By Anachron⏩
Yes, you are correct. Liquid is incorrect. $1M in net worth (without the equity on primary residence) is a better way to put it$1M liquid is hard - because anyone would prioritize primary residence and retirement accounts to be maxed first.
qualified accounts, investment accounts, and business equities.
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