Your channel is easily my favorite finance channel. Your videos are information dense, don't have filler material, are well researched, and don't have sensationalized content.
@@trainsplanesandotherthings5187Exactly. I own my home in San Diego. Let me tell you owning a $850,000 dollar home means a 3 bedroom 1600sr home in a track home built in the 70’s.
Same for any era. During the 1930-40's you could buy a house for $5-10k. That's what inflation does. The key question is where is your salary gone compared to any era you are comparing to. If your salary is the same or gone down compared to say every decade going backwards that is the issue. Which should lead you to ask if corporations are making record profits why is your salary staying the same or going down?
I joined the Army in 1996 with $7,000 in savings from my previous job. In 1997, I read a Motley Fool book with bad investing advice, but at least it got me interested in money and investing, and I made a goal of retiring in 20 years with ONE MILLION DOLLARS!!! I failed. I retired from the Army in 2016 with $750,000. But the market continued to be good and by Nov 2019, I hit the $1M mark. In Aug 2021, I hit $1.5M. Earlier this year, I comingled my dad's and my money (I'm his caregiver. He's 89 years old). Right now, our household net worth of investible assets is $2.1M. By the way, my withdrawal rate is zero. We live comfortably on his social security, his pension, and my Army retirement pay.
Start Spending my Friend. Leave 1Million in invested and take the rest out right now. Do Great stuff with and for your Dad and yourself. What is the point of the 2.1 growing to 4.2 if you never spend, and Bammmm, you are old and your Dad is gone.
Not only did I like the content, but because it asked to hit the LIKE button at the end of the video instead of ridiculously asking for it at the beginning, made me hit the LIKE.
Lol. Yeah. I’m worried that we are still reaching for $1 million, but by the time we retire that’s going to fall short, b/c it’s not going to be worth that, any more. I’m shooting to withdraw $100k/yr but it will go much further since I won’t have a mortgaged, or pay crazy property taxes.
@@1971_Chevelle_SS Depending on their time horizon, that might not be that high. For instance, if they're young and planning to retire in 40 years, then that would be the equivalent of about $37k/year today at 2.5% inflation. Honestly, even with a paid off home, that might not be enough in some areas of the US. Hopefully their time to retirement isn't that far off though and they just plan on living the good life.
@@HighCountryRambler I turned 65 this year and now qualify for a senior residential property tax exemption on the first $350K in assessed value. Senior exemptions of some type/amount are fairly common across the county.. I'll be paying on an assessed value of ~$40K now, so my property tax is cut by about 90%. If I moved into a cheaper house, it would be zero.
I think $1 million ( in 2024 dollars) is still a pretty good goal to have at 65. With the 4% rule, $1 million gives you $40,000 a year. The average Social Security check right now is $22,344. Assuming there is always at least $15,000 per person in Social Security, that sounds about right to me: $55,000 a year if you are single and $70,000 if you are a couple. I live on way less than that now.
Heck yeah it's a "pretty good goal to have at 65" but it isn't going to happen. Most people will never see a million dollars. Quite frankly I get tired of hearing this crap. You don't draw money out and try to keep your principle intact! You should deplete your money HAVING FUN!! (ask this 76 year old baby boomer how I know!!)
It depends on the investment. The vast majority don't invest 60 percent in stocks as assume in the 4% rule. I can bet that the 20 percent having more than 1 million investment assets is in real estate, bonds, and anything other than stocks. People tend to be afraid about stock investments.
@@KenS-z6rMy wife and I have enjoyed our lives and saved money. We have never had high paying jobs but there is a good chance we will have 1 million by the time we retire. We just decided what was important to us and what wasn’t. For instance, I had the same vehicle for about 25 years. I’m not a car guy. I just need something to get me from point A to point B. We like to travel. We try to make good decisions about where and when we go and how often.
@@jjred233 I think most of the "new" millionaires are including their homes (which have been the biggest evidence of inflation besides groceries) as making up most of their "million" which is ridiculous because reverse mortgages are the newest scandals to hit baby boomers!
Not I. And I retired at 52. If you know your expenses you can back into how much you need. I always lived within my means and always knew how much I spend. So many do not and therefore work a lot longer than necessary.
That’s awesome; the only thing I would be careful of is that you have a strong emergency fund and are prepared for costs that come down the road as medical expenses can get quite expensive as we age.
I started my first job in 1985 and a few years later, I set the goal to have $1 million saved by the time I retired. I'm 3 years from retirement and hit that goal last year, but I now know I should have moved that goal post further out to $1.5 million or more. I remember as a kid thinking millionaires were these people who lived like demi-gods among all us serfs. Now I am one and still don't feel any different from a serf.
You get used to it. I am a net worth seven figure guy for 6 years now. Actually had seven figures in all retirement accounts as of 2020. Had seven figures in just one account this year. I still drive the same car I bought 23 years ago. Everyone who sees me thinks I'm the poorest of the poor because I don't even wear a watch or "dress to impress" now.
@@chrissawyer1484 I can't remember the last I bought any clothes at retail prices. I buy most clothes at Kohls, Costco, Walmart, or a local discount chain. If I wasn't still working my white collar job, I would definitely spend less on clothes. I can't say my cars are 23 years old, but mine is 9 years old. My wife's car was 10 years old until she totaled it. I still do as much maintenance on my house, but those days could be coming to an end. My wife did like it a month ago when I fell on the roof and about slipped off it on the deck. I told my youngest kid (23 years old) that I was a millionaire (on paper) and she said she had no idea. So, my poor man disguise even works on my kids.
Sorry to burst your bubble but $1M in 1985 is equivalent to $2.9M today. You are still doing well but it demonstrates the reality of inflation. If you live 20 years in retirement odds are you will need 2X as mcuh per year as compared to the when starting retirement
@@kannermw I had no illusions about my $1 million dollar bubble. I know $1 million ain't what it used to be. That's why I said, I wish that I had been more future focused early in my working years. The funny thing is that my investments puts me in the top 3% of savers, and here I am, nervous about my future. To make matters worse, I made a choice 30 years ago to walk away from defined pension, which would have put me in a much better position. Oh well, I know it's all about managing my expenses and I know I can do that.
I'm impressed you had an econ class that talked about investing and compound interest! We need more and more of that. I had an accounting class, where we talked about debits and credits and balancing the books for a fictional business. And I mean "book" as a actual paper ledger book. ;-) And we certainly didn't have any internet game that used real markets. Yeah, that's because there wasn't a public internet back then. ;-) I know kids, scary!!! As I approach retirement, I am doing OK. But a lot of that is because of luck (yeah, hard work too, but I don't deny the luck I've had). Neither my schools nor my parents talked about finances, so I am SO glad people like you and others are doing this for people...
Well when I took accounting, intermediate accounting sorta lot of time on business financial statements, present value, future value tables. It didn’t tell you that, if you have this amount, and invest it at this percent in the future you will have x. I was early 30s, but already investing. I sat with those present value, future value tables to figure out my grand plan. People I worked with though did not apply that information to themselves. I can’t address that.
According to the information in your video. my wife and are are extremely well prepared for the rest of our retirement of which we are in our 5th year. We are frugal with our money but still enjoy the benefits of traveling and spoiling our seven grandchildren. I enjoy your channel, especially the bloopers! Be well Erin!
Clark Howard's show motto is "Save more, spend less and avoid getting ripped off". Much financial decisions ecah day are personal spending. Can you do some videos on avoiding getting ripped off with consumer issues?
1.5 Million in IRA here but our house is paid off and no bills. Wife and I both get a pension and social security checks also a hedge against calamity by holding 250k in gold and silver so we feel comfortable.
Erin, thank you very much for the videos. I've alerted my family, as well as a few friends, to your informative, yet well-mannered expertise. Approaching age 70 in February, I've been retired for a while now. The content of your videos usually provides validation, but I've certainly made a couple of mistakes since leaving the workforce. Fortunately, those missteps weren't crippling, but in finance, it is difficult to make up for even the smallest of investment errors. Hopefully, your attention to detail helps future viewers avoid the mine fields. Best of luck, csm
Great video!. As a child in the 60s-70s, being raised in poverty, I made myself a vow to become "rich". I didn't even know exactly what it meant, but I did know what poor was and I wanted something different. On my own at 17, I found my way into a local community college and started taking classes, including econ and business classes to understand money. I landed in the skilled trades young, learned to live below my means and saved in a Ramsey-ish style before it was a thing. My education continued, growing my skill set and earnings as the goal to become a "millionaire" solidified. Met a great woman that became my partner in life and she helped me understand what being rich really meant (hint, more than just money). Now retired and a "millionaire" (though inflation impacted what that means in today's dollars), it was worth all the work it took to get here. I'm nothing special and most anyone can achieve a million dollars or more, by retirement. You have to be willing to do the work, and make the sacrifices necessary to get there. This is true pretty much regardless of income. Today, it's still a worthwhile goal and the earlier you start, the likelihood of success increases dramatically.
Around 1.5 million dollars invested, the critical mass effect and compounding effect result in the investment making real money by itself. $1 million net worth isn't enough if more than half is not in stock market growth. 10% yearly gain on $100,000 is only $10,000 and subpoverty level and wouldn't cover many emergencies. 10% yearly gain on $1.5 M is $150,000 and a nice income, even better if reinvested and compounded.
@Dave-sw2dm Income can be subdivided into earned income and unearned income. Gets a little blurred if one reinvests gains and spends cash reserves. One's net worth can increase this way, meaning there must be significant inflow.
Ahh, memory lane. Our physics teacher taught us about the stock market, and we did the portfolio competition in his class. That was back when you had to wait on the financials in the newspaper.
I blame Suze Orman for this. On her show on CNBC in the 90's and 00's, she insisted you save $1M and would chew out anyone who wasn't close. I have less than that yet feel very comfortable with my retirement. Enjoy your show greatly.
I will have a pension and a 457 (firefighter/paramedic). The goal is to continue working, working OT and investing until the 457 returns the same income as the pension. Use half, keep half invested to hopefully best inflation
When I started my first 401k in 1988 I calculated I would need $1.8 million to retire at age 55. Of course lifestyle creep creeped and eventually became $2.6 million. However I was very conservative with my expected returns and saved much more than I needed. Retired at 55 with nearly $4.8 million and now at 56 it's up to about $5.2. Yes a very good problem to have but it is very possible to do, I never owned my own business, was never an executive, never even got my college degree. But I also never stopped working for 35 years, never stopped saving (always increased), and never stopped investing (especially in down markets). Most importantly I always saved first, my paycheck was typically less than 45% of my gross pay, so I learned to live on less.
Very similar situation. Do you have difficulty spending money? I just can’t get out of that frugal mindset!! If I don’t find value in in I simply won’t spend.
@@jameschaves5723 This is probably the hardest thing, once you train yourself to be frugal it is very hard to spend on anything. What I do is splurge on vacations; business class, 5 star hotels, luxury cruises. I find it easier to "waste" big money on trips than buying subscriptions at home. I have a 5 week cruise coming up that I already prepaid $50k for. And once you go business class you will never want to go back to steerage again.
As of yesterday, I became a "401k millionaire". I fee like I need another 1M to set us up to retire comfortably in 8-10 years... Oh, and as of this AM, I am no longer a 401k millionaire! haha
The history of this was so interesting. I was 20 in 1980 and have lived through most of what you talked about. I didn't know the background of 401k's. Started my 401k when I got a corporate job in 1983 and invested the max amount. I was making $5.00 per hour as a low admin. employee. I was living alone paying rent, car loan, insurance, food, everything with that $5 per hour salary. Now I am 64. Through saving, marriage, widowhood, investing, I am over a million but wish it was more. Always want more.
Well 😂 that was a total accident! (I didn't even have the thumbnail uploaded for the first 30 min, haha) Scheduling error on my part - this was supposed to go live tomorrow. Oops!
Coincides with my own journey. It did make for a goal I could envision. Having a goal and continuing to work towards it were key to realizing a reasonable retirement amount.
Great information and explanations as always! I had an economics teacher like your Mr. Hill. We also did a similar exercise where we had to grow a portfolio as well as do research on a company using their annual report! Taught me a lot about how the economic system worked! I wish they thighs our kids more about the market and money management. It’s one of the great disservices to our children not to set them up with the basic tools to know how to manage their money!
I’m still saving. Planning on retiring in about 18 months. I always budgeted for SS not being there but if it is then that’s just a bonus. Great job with the videos!!!!
Social Security will still be there. There's just a small risk it will get trimmed a little. The OASI fund could run out as early as 2033. If Congress does not bother to do anything to fix it (which would be a politically disastrous decision), then payments would probably be reduced to about 80% of their current levels. As population demographics get worse, that could gradually fall a little more. But I'd be stunned if payments were less than 75% of what is promised in your lifetime. It's almost impossible to imagine it getting any worse than that since most of the elderly depend almost entirely on their Social Security check.
Your last point about individual situations is very important. What you don't spend can be as important as what you save, and is a way to combat inflation. For example, a paid off home can greatly reduce your living expenses, especially if you have owned the property for a long time and have a low tax basis. The sale of the same property can also fund several years of assisted living when the time comes. Great stuff, Erin!
Wow, what an informative and entertaining video! I've come to trust your information and use your videos as a compliment to all other inputs about our pending retirement. Nice work, Erin and the blooper ending personalizes who you are to your viewers!
I did a similar stock challenge in 6th grade! I think a person could need more or less than $1 million depending on when they retire and any debt. It is a great goal and important to remember many could achieve it with a long enough time frame.
Great video. I was lucky and had a friend that was a financial advisor when I was 21. He got me signed up and now being 4 years from retirement I have almost 800k plus some descent 401k money with both my wife and I. The goal is still 1m by the time I retire at 62 plus the 401k and social security. I think I will be fine.
Another way to determine the needed amount required for retirement would be to figure out how much one needs to live off each month, and then how much would be required to purchase a fixed annuity up front to fund that amount. Also included in that calculation would be the amount received from social security and any pension plan that one may have (even though most companies no longer have pension, some do, and some people are old enough to have worked when pensions were a lot more common).
Great video Erin. I too was one of those young workers in the early nineties with a million-dollar retirement goal. I don't think most people will need a million dollars to retire, if they plan to retire at full retirement age. However, it is definitely something to consider for those who plan on retiring early and they won't have a pension or inheritance.
Erin is always giving great information, I am a millionaire with $0 debt and home, car etc. payed off. looking at the comments below .....worrying about her ring or her personal status etc. Just shows how people just not only don't get ahead because of the lack and ignorance of focus on the information. We call ourselves adults. It feels good not worrying about money at 60 years old and in great physical shape.. Keep up the good work Erin!!!
I actually estimate my retirement as an annuity. This allows me to mathematically calculate how much money I would need more precisely and how much I would have to save each month to get there. This is also where the 4% rule and the 25X rule come from. However, if one knows how to calculate the present value of an annuity they can calculate their retirement based on their circumstances as opposed to making the same assumptions that are used in the 4% rule (30 years retirement, 1% adjusted for inflation rate of return on the present value). These days people will probably need more than $1million if they plan to retire without a dependence on social security. For instance, in my lean retirement scenario I will withdraw $26,790 per year in todays dollars for 30 years stored in HYSA, bonds, etc with an expected return rate of about 1% adjusted for inflation. To be able to do that, at the time of retirement I would need to have $691,388 in todays dollars. At a modest rate of inflation of just 2.5%, that puts the balance at $1,345,930. I'm 33 and planning to retire at 60. Social security can make this easier, but the point is that if peoples' savings are actually as low as you are saying, then we are likely going to have a worse senior poverty problem than we currently have and social security likely wont go as far as it does today.
I always had the goal of one million but when I got there it didn't seem like that much. I think 1.75 million is a pretty good comfortable mark to be at.
As always Erin does a great job. Very interesting how we got to the million dollar goal. It was what you needed to generate a typical income in 2000. BTW, Bengen updated the 4% rule upward ( I think he said 4.7).
Hi Erin. Good discussion and review of the historical record. I remember Black Mondy in 1987 very well. It was eyeopening and a good experience for perspective and to prepare me for events yet to come. It's important for people to know their number, base on their estimated needs at retirement. They can then easily do the math backwards and determine what their savings rate should be. The key is to to start early (power of compounding), have a plan and stick to it, always be buying. Regardless of if the goal is one or two million, it is definitely doable. Sadly, we do a very poor job of educating our young people in this country, generally, much less about money and finances. I wish we could somehow get on track to be more proactive and if so, everyone would be better prepared and able to plan and positon themselves for retirement. Keep up the great content Erin and have a blessed week. Larry, Central Valley, Ca.
Consider the median income household, 80k as of 2024. A million dollars saved for retirement plus $24,000/yr in social security (the median SS amount.) The combination would cover expenses of $64k a year or $5333/month in retirement using the 4% rule. The million would continue to grow and SS is adjusted for inflation so this plan could follow the 4% rule adjusting for inflation each year. My household expenses are still at the median income for the USA which has worked for us for decades now, saving anything above the median income into retirement funds.
I continue to appreciate your posts; realistic and intelligent information. When people figure out you're a great resource (better than Ramsey), your channel will take off
As a retired CFO and former trustee to our company 401k plan it saddened me to see employees not contribute to get the match. I ran the employee benefit plan meetings and would tell them that if they didn’t take the company’s match money they were leaving money on the table and giving it back to the company. We offered the option to borrow from their balances, while I did not encourage them to do that, they were better to contribute, get the match and borrow if needed. My point is that even when companies encouraged good savings plans, covered all the plan’s cost and education, sometimes people need/choose to focus on current needs rather than future retirement savings.
Thank you so much for this video. It's interesting to know that $1M is really a figure and not an absolute must, but at the same time, it's important to have some goals for retirement.
1 million - a nice, catchy number for sure. Issue is that imparts unnecessary stress on minds of the average investor. I guess if one lives below one’s means, saves and invests diligently and go easy on the so-called “ money goals “ where you accept any media dictated arbitrary amount to be what you need for retirement, one would do good.. Great video as usual Erin.. ❤
Almost everyone gets some social security in retirement. Average wage is about 55k. Average SS is 22k. That leaves 33k you need which is about 800k in IRA. You drive less and have fewer expenses other than health insurance, but with Medicare, it's not that bad. The number 1 is always keeping as healthy as possible.
because 1M divided by 40k a year gives you 25 years of money to retire on. That would take you to 90 if you have no pension to reduce money burn and most people didn't really live beyond 80 back in the day. Sadly that number has become more like 2M today as more and more people are living beyond 90 and into the their 100's. 40 years ago 40k a year was really good money to live on. Now its barely out of poverty.
Excellent video! I’ll pass it along to some friends who definitely need help understanding retirement savings. Slow and steady usually wins the race from my experience.
I have a 3 legged retirement with a pension, SS, and 401K. I will adjust to whatever I have when the day comes. Already devbt free, but still buying big ticket items while I can.
I arbitrarily selected one million in my late teens, early twenties as my target goal because the idea of being a millionaire was appealing. I now realize I can live on 600k. But if it wasn't for that dream of being a millionaire, my journey would have never started.
You have stumbled upon what the algorithm is looking for, I think you are great, I think this video was great and very well considered. Thank you so much for what you are doing, you should be very proud!
Love your show. I cannot believe in all my years of watching you tube and reading on retirement/investing i never knew of Ted Benna. Love your show, you always teach and explain these subjects in such an amazing way.
All depends on your expenses. For people who were making 40k and living comfortably with that salary back in the 90's, it's basically a pipe dream to retire and still have that amount of money coming in without working. unrealistic dreams are common. If you live a modest life, then 1M is still good enough today... just not as lush and lavish as it used to be. It's not the ballin out dream but the idea is if you're at the retirement age, you really shouldn't have THAT many recurring bills anymore assuming you were responsible not to take crazy loans. I've been driving my subaru for 10 years now. Got the steering rack swapped bc it was leaking and now it feels brand new again. I intend to drive it to the ground. Meanwhile, 10 years is a dinosaur to some of my friends and they insist it's time for them to get new cars. Why people are willing to always have car payments forever is beyond my understanding.
Loved your video! Unfortunately, I think we will need more than $1 million going forward.😢 By the time I'm 65 years old (22 years from now) $1 million will probably look more like $600,000, not nearly enough to last the next 30 years past that. Of course that's an arbitrary estimate on my part, but the point is one million won't go nearly as far as it did back in 1980! We probably should be aiming higher, as difficult as it may be.
I'm still believing the lie!!! 🤣 I read some of those late 80s and early 90s books that pushed the $1m goal. I was in my early 20s and I said, "Okay. Let's get after it!" I'm glad I started young.
That's great that you had a finance class! I'm 6yrs older and never had a single class in high school or college (granted I was a psych major) that even touched on investing. I plan to teach Eisley much earlier, but hopefully she will have some exposure in school too.
In the last 10 years my 401 increase each year greater than my salary. The more you have the more you make which makes it hard to decide when enough is enough.
Hi Erin, thank you so much for your videos! I started saving in my 401k on my first day of work as an engineer in the 1980's. My employer had a program that would match up to 3% of my salary, what a deal! I can retire at any time now and not have financial worries. I try to be a good role model and encourage all young people to start investing right away.
Engineer here, too. My older brother had been in the workforce for years before me and tried saving 1% for a little while but it was "too hard". I was given the book "The Wealthy Barber" from one of my business major friends my first week at work. I immediately started putting 10% in my 401k and haven't stopped. It isn't quite enough nowadays (I'm recommending 15% for my kiddos), but getting into the habit and not seeing every dollar in your paycheck as spendable income really counteracts our human nature to spend every cent on things.
You should point out to people that are investing in a 401K or IRA that the most important part of having one of these is the compounding they enjoy over many years. If you are investing in the market (mutual funds) and reinvesting the dividends you are buying more shares every pay period. The value of the IRA/401K may seem like it is not growing some years. However they should be looking at the number of shares they are gaining each year. Over time these shares will start growing in valve and in turn the value of your investment will grow. When you retire and start taking your dividends and capital gains in cash you will discover you can earn 7 to 15 percent every year. You can't get that kind or return on government bonds or a defined pension plan....
Hey guys! What's up? Great video, definitely learned a lot. I was really hoping to get away with a million as the goal and get out of the rat race early, but...hearing that my goal was a reasonable goal in 1990 kinda put things in perspective. Alright. 2.5 it is, then. Yeesh.
$1 million was also what I remember, in Canada. That was my goal, but I never really thought much about it. I just worked and saved. I retired two years ago at age 62, with about 1.3 million Canadian dollars. A third of that I will need to pay tax on when I pull it out of the RRSP (Registered Retirement Savings Plan), like a 401K I think. With my lifestyle I could easily live on less than half that after including my CPP (Canadian Pension Plan) and OAS (Old Age Security).
Thanks for the historical lesson on 401k and your humbling experience. The estimated check on what people have is always a good check. There is a scare tactic that you need all this money with a Monte Carlo and 99% success and to live to 95. Not sure many get this far.
Before I started consolidating accounts I had 3 separate 401k's, and a brokerage account with an IRA, a Roth IRA, and some non deferred investments. So yeah, like you say just looking at individual account balances is an incomplete picture. One other reason I think $1M is a goal is to be able to say you're a millionaire. It's always been a term associated with being wealthy. And it still is a nice chunk of change, but it's no longer the gateway to wealth.
My retirement account has gone down by 13.7% in the past year due to rebalancing I did out of fear uncertainty and doubt. What are best alternatives to take in other to secure a financially free retirement and achieve ultimate peace? I don’t want to fail after 42 years of working hard.
I have 3 retirement accounts. Two of them I set the investment allocation 25 years ago and never changed a single thing. One of them I watched a lot and rebalanced/traded/worried about. By far, the one with the worst return is the one I fiddled with. My advice to anyone would be to choose a low cost index fund and forget about it for the next 40 years, except for when you’re adding money to it.
Pretty low number for 2024 if you want to retire as well as you were doing while working. $40k (4 percent of $1M) annually is minimum wage in WA state as of Jan 1 2025. SS will help a bit.
Median household income 80K. 35% replaced by SS. Need to get 52K. Using 4% rule, 1.3M works. So roughly right... the more you stay away from median (ex. early retirement, less replaced by SS, income variance), need to adjust accordingly
The first $100.000.00 is the most important because your money grows exponentially from this point on: invest $7,000.00 a year at a return of 7% a year yields $100,000.00 within 7.84 years! Investing $5,000.00 per year balloons to $100,000.00 within 13.44 years!
IF you have 1 million in your IRA account and take the 4 percent out as recommended it would be 40k before taxes. Then take out 20 percent for taxes it would leave you 32K which is 2,660 per month. Add Social Security 2000 per person ( husband and wife)Estimated after taxes and medicare. It would leave 6,660. That is not a lot with the current inflation rate.
Here I am feeling like $1M won’t be nearly enough. I’m not banking on social security being around in 30 years, and lord knows what inflation is going to do, so I’m shooting for $3-4M or so.
Thanks Erin, good video as always! The biggest thing I learned from this video was finally figured out where Dave Ramsey gets his moronic 12% stock market portfolio rate of return expectations when advising people 😂😂😂
Nowadays, a million dollars is pretty obtainable for the average joe. As long as u have ur life in order (like went to university, invest early, buy a house, dont go thru a zillion divorces, dont spend beyond ur means, etc), u should have a million in assets possibly in ur 40s.... in your 50s or 60s for sure.
@@jrm2383 I didnt say it was necessary. I just said "for the average joe" to be a millionaire, a university education was part of having ur life in order. In other words, for most people, university is part of their formula for financial success. And I dont agree with ur line of thinking. For some students yes, but for the large majority, no. Student debt does not prevent financial success. Maybe it does from the point of view of a former student in their mid 30s to 40s. But in the long run, when that person is 65, student debt is part of the life path to financial success for most people.
@@Dutchman-k5e Well she did say 20% of Americans have a million in assets. Pretty sure the 80% didnt have their life in order or didnt make wise life choices.
@@Dutchman-k5e Ya, my original comment didnt specify assets. My bad! But she was referencing assets in her video when she brought up the 20% so I was just basing my comment on that. I shouldve utilized the word "assets", but I overlooked typing that out. But if u read into my original comment, I did say "buy a house". And if I wasnt referring to assets, then buying a house would not have a positive effect on one's retirement savings. So it would be possible to deduce that I was referring to assets. When I think of wealth or retirement, I always think assets (just real estate) rather than just savings like the 401k, IRA, pensions, etc. Most first time millionaires made their wealth thru real estate (or small business). So most people include their home equity as part of their wealth. However, if strictly speaking in regards to one's retirement savings, then a million dollar nest egg is very, very, very hard to obtain for the average joe.
Your channel is easily my favorite finance channel. Your videos are information dense, don't have filler material, are well researched, and don't have sensationalized content.
Thank you so much!!! 😊
@@ErinTalksMoney Ditto, Erin you are refreshing and just right!
@@ErinTalksMoneyAgree 100%! And I'll add that you are so genuine and I LOVE the bloopers at the end!
@@ErinTalksMoney Absolutely Beautiful
See: Money Guys (certified) and Two Sides of FI
Having $1M in retirement assets used to mean you were rich. Now it just means that you're middle class
yes..exactly when owning a $500k home use to mean you were Rich...
@@trainsplanesandotherthings5187Exactly. I own my home in San Diego. Let me tell you owning a $850,000 dollar home means a 3 bedroom 1600sr home in a track home built in the 70’s.
Same for any era. During the 1930-40's you could buy a house for $5-10k. That's what inflation does. The key question is where is your salary gone compared to any era you are comparing to.
If your salary is the same or gone down compared to say every decade going backwards that is the issue. Which should lead you to ask if corporations are making record profits why is your salary staying the same or going down?
Having 1M in retirement is still pretty damn good! Don't minimize it.
Ahhh, but if you have a pension... and if you have maxed out Social Security for years, why would you need it?
We all have different gifts. Erin has the gift of explanation. Girl you are fantastic at expaining things. I absolutely love listening to you.
I joined the Army in 1996 with $7,000 in savings from my previous job. In 1997, I read a Motley Fool book with bad investing advice, but at least it got me interested in money and investing, and I made a goal of retiring in 20 years with ONE MILLION DOLLARS!!! I failed. I retired from the Army in 2016 with $750,000. But the market continued to be good and by Nov 2019, I hit the $1M mark. In Aug 2021, I hit $1.5M. Earlier this year, I comingled my dad's and my money (I'm his caregiver. He's 89 years old). Right now, our household net worth of investible assets is $2.1M. By the way, my withdrawal rate is zero. We live comfortably on his social security, his pension, and my Army retirement pay.
solid growth - thanks for sharing --- my best to you and your dad (it is tough being a caregiver) ---- great respect and thanks for your service.
Start Spending my Friend. Leave 1Million in invested and take the rest out right now. Do Great stuff with and for your Dad and yourself. What is the point of the 2.1 growing to 4.2 if you never spend, and Bammmm, you are old and your Dad is gone.
Well done.
Tell no WOMAN
@@TRINITY-ks6nw Tell no CHURCH
Love it when you include bloopers at the end - so fun! 🙂
She just keeps on chipping away and her channel continues to grow.
Not only did I like the content, but because it asked to hit the LIKE button at the end of the video instead of ridiculously asking for it at the beginning, made me hit the LIKE.
$1 million saved was a dream in the 1980's for many.
Amazing how its 2024...40 years later ... and $1 million saved is STILL a dream for many.....
Lol. Yeah. I’m worried that we are still reaching for $1 million, but by the time we retire that’s going to fall short, b/c it’s not going to be worth that, any more.
I’m shooting to withdraw $100k/yr but it will go much further since I won’t have a mortgaged, or pay crazy property taxes.
@@chaselesser3191withdraw a $100k a year? The vast majority don’t make that working, you must be part of the elite class of society.
@@chaselesser3191 Please let us know how you won't be paying any property taxes? Living in a tent on some busy street pissing off all the home owners?
@@1971_Chevelle_SS Depending on their time horizon, that might not be that high. For instance, if they're young and planning to retire in 40 years, then that would be the equivalent of about $37k/year today at 2.5% inflation. Honestly, even with a paid off home, that might not be enough in some areas of the US. Hopefully their time to retirement isn't that far off though and they just plan on living the good life.
@@HighCountryRambler I turned 65 this year and now qualify for a senior residential property tax exemption on the first $350K in assessed value. Senior exemptions of some type/amount are fairly common across the county.. I'll be paying on an assessed value of ~$40K now, so my property tax is cut by about 90%. If I moved into a cheaper house, it would be zero.
I think $1 million ( in 2024 dollars) is still a pretty good goal to have at 65.
With the 4% rule, $1 million gives you $40,000 a year. The average Social Security check right now is $22,344. Assuming there is always at least $15,000 per person in Social Security, that sounds about right to me: $55,000 a year if you are single and $70,000 if you are a couple.
I live on way less than that now.
Heck yeah it's a "pretty good goal to have at 65" but it isn't going to happen. Most people will never see a million dollars. Quite frankly I get tired of hearing this crap. You don't draw money out and try to keep your principle intact! You should deplete your money HAVING FUN!! (ask this 76 year old baby boomer how I know!!)
It depends on the investment. The vast majority don't invest 60 percent in stocks as assume in the 4% rule. I can bet that the 20 percent having more than 1 million investment assets is in real estate, bonds, and anything other than stocks. People tend to be afraid about stock investments.
@@KenS-z6rMy wife and I have enjoyed our lives and saved money. We have never had high paying jobs but there is a good chance we will have 1 million by the time we retire. We just decided what was important to us and what wasn’t. For instance, I had the same vehicle for about 25 years. I’m not a car guy. I just need something to get me from point A to point B. We like to travel. We try to make good decisions about where and when we go and how often.
@@jjred233 I think most of the "new" millionaires are including their homes (which have been the biggest evidence of inflation besides groceries) as making up most of their "million" which is ridiculous because reverse mortgages are the newest scandals to hit baby boomers!
Depends on what part of the country you live in. Big difference
Not I. And I retired at 52. If you know your expenses you can back into how much you need. I always lived within my means and always knew how much I spend. So many do not and therefore work a lot longer than necessary.
Same here, retired at 53 without debt, been doing fine four years retired now without a million in retirement accounts.
@@1971_Chevelle_SS Do you have pension then?
That’s awesome; the only thing I would be careful of is that you have a strong emergency fund and are prepared for costs that come down the road as medical expenses can get quite expensive as we age.
@@Sheila06854 took the lump sum pension and rolled it, with my 401k into an IRA.
@@Sheila06854 yes, rolled the lump sum and my 401k into a IRA, combined was less than a million.
It feels really good to have reached the 2 comma club 😊🎉
woo-hoo! 😊
I started my first job in 1985 and a few years later, I set the goal to have $1 million saved by the time I retired. I'm 3 years from retirement and hit that goal last year, but I now know I should have moved that goal post further out to $1.5 million or more.
I remember as a kid thinking millionaires were these people who lived like demi-gods among all us serfs. Now I am one and still don't feel any different from a serf.
You get used to it. I am a net worth seven figure guy for 6 years now. Actually had seven figures in all retirement accounts as of 2020. Had seven figures in just one account this year. I still drive the same car I bought 23 years ago. Everyone who sees me thinks I'm the poorest of the poor because I don't even wear a watch or "dress to impress" now.
@@chrissawyer1484 me too
@@chrissawyer1484 I can't remember the last I bought any clothes at retail prices. I buy most clothes at Kohls, Costco, Walmart, or a local discount chain. If I wasn't still working my white collar job, I would definitely spend less on clothes.
I can't say my cars are 23 years old, but mine is 9 years old. My wife's car was 10 years old until she totaled it.
I still do as much maintenance on my house, but those days could be coming to an end. My wife did like it a month ago when I fell on the roof and about slipped off it on the deck.
I told my youngest kid (23 years old) that I was a millionaire (on paper) and she said she had no idea. So, my poor man disguise even works on my kids.
Sorry to burst your bubble but $1M in 1985 is equivalent to $2.9M today. You are still doing well but it demonstrates the reality of inflation. If you live 20 years in retirement odds are you will need 2X as mcuh per year as compared to the when starting retirement
@@kannermw I had no illusions about my $1 million dollar bubble. I know $1 million ain't what it used to be. That's why I said, I wish that I had been more future focused early in my working years.
The funny thing is that my investments puts me in the top 3% of savers, and here I am, nervous about my future.
To make matters worse, I made a choice 30 years ago to walk away from defined pension, which would have put me in a much better position.
Oh well, I know it's all about managing my expenses and I know I can do that.
I'm impressed you had an econ class that talked about investing and compound interest!
We need more and more of that.
I had an accounting class, where we talked about debits and credits and balancing the books for a fictional business. And I mean "book" as a actual paper ledger book. ;-)
And we certainly didn't have any internet game that used real markets.
Yeah, that's because there wasn't a public internet back then. ;-) I know kids, scary!!!
As I approach retirement, I am doing OK. But a lot of that is because of luck (yeah, hard work too, but I don't deny the luck I've had).
Neither my schools nor my parents talked about finances, so I am SO glad people like you and others are doing this for people...
Well when I took accounting, intermediate accounting sorta lot of time on business financial statements, present value, future value tables. It didn’t tell you that, if you have this amount, and invest it at this percent in the future you will have x. I was early 30s, but already investing. I sat with those present value, future value tables to figure out my grand plan. People I worked with though did not apply that information to themselves. I can’t address that.
According to the information in your video. my wife and are are extremely well prepared for the rest of our retirement of which we are in our 5th year. We are frugal with our money but still enjoy the benefits of traveling and spoiling our seven grandchildren. I enjoy your channel, especially the bloopers! Be well Erin!
I love that you’re taking this opportunity to travel and spoil your grandkids! 💜
Clark Howard's show motto is "Save more, spend less and avoid getting ripped off". Much financial decisions ecah day are personal spending. Can you do some videos on avoiding getting ripped off with consumer issues?
1.5 Million in IRA here but our house is paid off and no bills. Wife and I both get a pension and social security checks also a hedge against calamity by holding 250k in gold and silver so we feel comfortable.
We all need a goal to shoot for and make savings an ingrained habit. Thanks for the entertaining and informative history lesson!
Erin, thank you very much for the videos. I've alerted my family, as well as a few friends, to your informative, yet well-mannered expertise. Approaching age 70 in February, I've been retired for a while now. The content of your videos usually provides validation, but I've certainly made a couple of mistakes since leaving the workforce. Fortunately, those missteps weren't crippling, but in finance, it is difficult to make up for even the smallest of investment errors. Hopefully, your attention to detail helps future viewers avoid the mine fields. Best of luck, csm
Thank you!!!!
Great video!. As a child in the 60s-70s, being raised in poverty, I made myself a vow to become "rich". I didn't even know exactly what it meant, but I did know what poor was and I wanted something different. On my own at 17, I found my way into a local community college and started taking classes, including econ and business classes to understand money. I landed in the skilled trades young, learned to live below my means and saved in a Ramsey-ish style before it was a thing.
My education continued, growing my skill set and earnings as the goal to become a "millionaire" solidified. Met a great woman that became my partner in life and she helped me understand what being rich really meant (hint, more than just money). Now retired and a "millionaire" (though inflation impacted what that means in today's dollars), it was worth all the work it took to get here. I'm nothing special and most anyone can achieve a million dollars or more, by retirement. You have to be willing to do the work, and make the sacrifices necessary to get there. This is true pretty much regardless of income. Today, it's still a worthwhile goal and the earlier you start, the likelihood of success increases dramatically.
Around 1.5 million dollars invested, the critical mass effect and compounding effect result in the investment making real money by itself. $1 million net worth isn't enough if more than half is not in stock market growth. 10% yearly gain on $100,000 is only $10,000 and subpoverty level and wouldn't cover many emergencies. 10% yearly gain on $1.5 M is $150,000 and a nice income, even better if reinvested and compounded.
If reinvested it is no longer income.
@Dave-sw2dm Income can be subdivided into earned income and unearned income. Gets a little blurred if one reinvests gains and spends cash reserves. One's net worth can increase this way, meaning there must be significant inflow.
Ahh, memory lane. Our physics teacher taught us about the stock market, and we did the portfolio competition in his class. That was back when you had to wait on the financials in the newspaper.
I blame Suze Orman for this. On her show on CNBC in the 90's and 00's, she insisted you save $1M and would chew out anyone who wasn't close. I have less than that yet feel very comfortable with my retirement. Enjoy your show greatly.
Thanks for sharing the back story of the 1 million retirement goal 🙏🏿😊
I will have a pension and a 457 (firefighter/paramedic). The goal is to continue working, working OT and investing until the 457 returns the same income as the pension. Use half, keep half invested to hopefully best inflation
When I started my first 401k in 1988 I calculated I would need $1.8 million to retire at age 55. Of course lifestyle creep creeped and eventually became $2.6 million. However I was very conservative with my expected returns and saved much more than I needed. Retired at 55 with nearly $4.8 million and now at 56 it's up to about $5.2. Yes a very good problem to have but it is very possible to do, I never owned my own business, was never an executive, never even got my college degree. But I also never stopped working for 35 years, never stopped saving (always increased), and never stopped investing (especially in down markets). Most importantly I always saved first, my paycheck was typically less than 45% of my gross pay, so I learned to live on less.
You did damn well. Congrats. If you haven't yet, you might consider reading "Live well Die broke ".
This is the way.
Very similar situation. Do you have difficulty spending money? I just can’t get out of that frugal mindset!! If I don’t find value in in I simply won’t spend.
@@jameschaves5723 This is probably the hardest thing, once you train yourself to be frugal it is very hard to spend on anything. What I do is splurge on vacations; business class, 5 star hotels, luxury cruises. I find it easier to "waste" big money on trips than buying subscriptions at home. I have a 5 week cruise coming up that I already prepaid $50k for. And once you go business class you will never want to go back to steerage again.
Unless you start spending you will die with 2 to 3 times that amount
As of yesterday, I became a "401k millionaire". I fee like I need another 1M to set us up to retire comfortably in 8-10 years... Oh, and as of this AM, I am no longer a 401k millionaire! haha
Congrats!
The history of this was so interesting. I was 20 in 1980 and have lived through most of what you talked about. I didn't know the background of 401k's. Started my 401k when I got a corporate job in 1983 and invested the max amount. I was making $5.00 per hour as a low admin. employee. I was living alone paying rent, car loan, insurance, food, everything with that $5 per hour salary. Now I am 64. Through saving, marriage, widowhood, investing, I am over a million but wish it was more. Always want more.
Video on a Tuesday? Awesome!
Well 😂 that was a total accident! (I didn't even have the thumbnail uploaded for the first 30 min, haha) Scheduling error on my part - this was supposed to go live tomorrow. Oops!
@@ErinTalksMoney lol thanks anyways :)
@@ErinTalksMoney Make a full video for tomorrow of just bloopers 🤪
Coincides with my own journey. It did make for a goal I could envision. Having a goal and continuing to work towards it were key to realizing a reasonable retirement amount.
Great information and explanations as always! I had an economics teacher like your Mr. Hill. We also did a similar exercise where we had to grow a portfolio as well as do research on a company using their annual report! Taught me a lot about how the economic system worked! I wish they thighs our kids more about the market and money management. It’s one of the great disservices to our children not to set them up with the basic tools to know how to manage their money!
I’m still saving. Planning on retiring in about 18 months. I always budgeted for SS not being there but if it is then that’s just a bonus. Great job with the videos!!!!
Social Security will still be there. There's just a small risk it will get trimmed a little. The OASI fund could run out as early as 2033. If Congress does not bother to do anything to fix it (which would be a politically disastrous decision), then payments would probably be reduced to about 80% of their current levels. As population demographics get worse, that could gradually fall a little more. But I'd be stunned if payments were less than 75% of what is promised in your lifetime.
It's almost impossible to imagine it getting any worse than that since most of the elderly depend almost entirely on their Social Security check.
@@theprogressivemichigander6588I’m guessing it will be means tested though
1 million is never the goal but is the next milestone!
Your last point about individual situations is very important. What you don't spend can be as important as what you save, and is a way to combat inflation. For example, a paid off home can greatly reduce your living expenses, especially if you have owned the property for a long time and have a low tax basis. The sale of the same property can also fund several years of assisted living when the time comes. Great stuff, Erin!
Love the bloopers at the end, Erin. Keeps it real.
15 seconds into this I immediately subscribed.... I’ll have to watch more of your videos they look great and this one was awesome
Thank you so much!
Wow, what an informative and entertaining video! I've come to trust your information and use your videos as a compliment to all other inputs about our pending retirement. Nice work, Erin and the blooper ending personalizes who you are to your viewers!
Wow, thank you! 😊 🙏
Long time viewer and this was the nail for me to smash that subscribe button.
Thank you!! 🙏 😊
Terrific video. Canada 🇨🇦 appreciates your research and experience.
I did a similar stock challenge in 6th grade! I think a person could need more or less than $1 million depending on when they retire and any debt. It is a great goal and important to remember many could achieve it with a long enough time frame.
My brother's class did that challenge as well. Him and his buddy went heavily into penny stocks and crushed everybody.
Great video. I was lucky and had a friend that was a financial advisor when I was 21. He got me signed up and now being 4 years from retirement I have almost 800k plus some descent 401k money with both my wife and I. The goal is still 1m by the time I retire at 62 plus the 401k and social security. I think I will be fine.
I can't help but wonder if there was a direct correlation between companies discontinuing their pensions, and people switching jobs more frequently.
Another way to determine the needed amount required for retirement would be to figure out how much one needs to live off each month, and then how much would be required to purchase a fixed annuity up front to fund that amount. Also included in that calculation would be the amount received from social security and any pension plan that one may have (even though most companies no longer have pension, some do, and some people are old enough to have worked when pensions were a lot more common).
Great video Erin. I too was one of those young workers in the early nineties with a million-dollar retirement goal. I don't think most people will need a million dollars to retire, if they plan to retire at full retirement age. However, it is definitely something to consider for those who plan on retiring early and they won't have a pension or inheritance.
Erin is always giving great information, I am a millionaire with $0 debt and home, car etc. payed off. looking at the comments below .....worrying about her ring or her personal status etc. Just shows how people just not only don't get ahead because of the lack and ignorance of focus on the information. We call ourselves adults. It feels good not worrying about money at 60 years old and in great physical shape.. Keep up the good work Erin!!!
This is great. There are places like NYC or So-Cal where you have to "shift the numbers higher" but the that's about it.
I actually estimate my retirement as an annuity. This allows me to mathematically calculate how much money I would need more precisely and how much I would have to save each month to get there. This is also where the 4% rule and the 25X rule come from. However, if one knows how to calculate the present value of an annuity they can calculate their retirement based on their circumstances as opposed to making the same assumptions that are used in the 4% rule (30 years retirement, 1% adjusted for inflation rate of return on the present value).
These days people will probably need more than $1million if they plan to retire without a dependence on social security. For instance, in my lean retirement scenario I will withdraw $26,790 per year in todays dollars for 30 years stored in HYSA, bonds, etc with an expected return rate of about 1% adjusted for inflation. To be able to do that, at the time of retirement I would need to have $691,388 in todays dollars. At a modest rate of inflation of just 2.5%, that puts the balance at $1,345,930. I'm 33 and planning to retire at 60.
Social security can make this easier, but the point is that if peoples' savings are actually as low as you are saying, then we are likely going to have a worse senior poverty problem than we currently have and social security likely wont go as far as it does today.
I always had the goal of one million but when I got there it didn't seem like that much. I think 1.75 million is a pretty good comfortable mark to be at.
I am getting ready to cross the $1 million....its a nice milestone but not a stopping point.
Awesome video! I really enjoyed the story of the $1M goal. Thanks 😊!
Glad you enjoyed it!
As always Erin does a great job. Very interesting how we got to the million dollar goal. It was what you needed to generate a typical income in 2000. BTW, Bengen updated the 4% rule upward ( I think he said 4.7).
Hi Erin. Good discussion and review of the historical record. I remember Black Mondy in 1987 very well. It was eyeopening and a good experience for perspective and to prepare me for events yet to come. It's important for people to know their number, base on their estimated needs at retirement. They can then easily do the math backwards and determine what their savings rate should be. The key is to to start early (power of compounding), have a plan and stick to it, always be buying. Regardless of if the goal is one or two million, it is definitely doable. Sadly, we do a very poor job of educating our young people in this country, generally, much less about money and finances. I wish we could somehow get on track to be more proactive and if so, everyone would be better prepared and able to plan and positon themselves for retirement. Keep up the great content Erin and have a blessed week. Larry, Central Valley, Ca.
Kommiela and the governments gonna provide, why worry, savers will be taxed to pay for everyone else.
I want to reach $1 million just to say "I'm a millionaire" at some point in my life. It's on my bucket list.
Purchase MF owner-financed or use the SCDC method of ownership, and it will not longer be on your bucket list! :-)
Consider the median income household, 80k as of 2024. A million dollars saved for retirement plus $24,000/yr in social security (the median SS amount.) The combination would cover expenses of $64k a year or $5333/month in retirement using the 4% rule. The million would continue to grow and SS is adjusted for inflation so this plan could follow the 4% rule adjusting for inflation each year. My household expenses are still at the median income for the USA which has worked for us for decades now, saving anything above the median income into retirement funds.
I continue to appreciate your posts; realistic and intelligent information. When people figure out you're a great resource (better than Ramsey), your channel will take off
As a retired CFO and former trustee to our company 401k plan it saddened me to see employees not contribute to get the match. I ran the employee benefit plan meetings and would tell them that if they didn’t take the company’s match money they were leaving money on the table and giving it back to the company. We offered the option to borrow from their balances, while I did not encourage them to do that, they were better to contribute, get the match and borrow if needed. My point is that even when companies encouraged good savings plans, covered all the plan’s cost and education, sometimes people need/choose to focus on current needs rather than future retirement savings.
Happy (approximate) birthday, Erin!
Thank you! Officially, it’s next week 😊
I think it’s arbitrary but it sounds good. It’s the first number that you can be labeled a “millionaire. “
Great video Erin! Really enjoy the bloopers at the end.
Thank you so much for this video. It's interesting to know that $1M is really a figure and not an absolute must, but at the same time, it's important to have some goals for retirement.
Depends on your costs, whatever your savings, investments and other income numbers.
1 million - a nice, catchy number for sure. Issue is that imparts unnecessary stress on minds of the average investor. I guess if one lives below one’s means, saves and invests diligently and go easy on the so-called “ money goals “ where you accept any media dictated arbitrary amount to be what you need for retirement, one would do good..
Great video as usual Erin.. ❤
Almost everyone gets some social security in retirement. Average wage is about 55k. Average SS is 22k. That leaves 33k you need which is about 800k in IRA. You drive less and have fewer expenses other than health insurance, but with Medicare, it's not that bad. The number 1 is always keeping as healthy as possible.
thank you for this video, this makes me feel much better about getting older
The bloopers? Endearing and human!😅
because 1M divided by 40k a year gives you 25 years of money to retire on. That would take you to 90 if you have no pension to reduce money burn and most people didn't really live beyond 80 back in the day. Sadly that number has become more like 2M today as more and more people are living beyond 90 and into the their 100's. 40 years ago 40k a year was really good money to live on. Now its barely out of poverty.
Excellent video! I’ll pass it along to some friends who definitely need help understanding retirement savings. Slow and steady usually wins the race from my experience.
I have a 3 legged retirement with a pension, SS, and 401K. I will adjust to whatever I have when the day comes. Already devbt free, but still buying big ticket items while I can.
Me too that pension helps a lot
I arbitrarily selected one million in my late teens, early twenties as my target goal because the idea of being a millionaire was appealing. I now realize I can live on 600k. But if it wasn't for that dream of being a millionaire, my journey would have never started.
Hi Erin, when you and many people mentioned 1 million dollars for retirement, is it 1 million per person or per husband and wife?
i was going to ask the same question.
You have stumbled upon what the algorithm is looking for, I think you are great, I think this video was great and very well considered. Thank you so much for what you are doing, you should be very proud!
Thank you! 😊
Love your show. I cannot believe in all my years of watching you tube and reading on retirement/investing i never knew of Ted Benna. Love your show, you always teach and explain these subjects in such an amazing way.
Thank you so much!! 😊
Nice history work for sure.
All depends on your expenses. For people who were making 40k and living comfortably with that salary back in the 90's, it's basically a pipe dream to retire and still have that amount of money coming in without working. unrealistic dreams are common. If you live a modest life, then 1M is still good enough today... just not as lush and lavish as it used to be. It's not the ballin out dream but the idea is if you're at the retirement age, you really shouldn't have THAT many recurring bills anymore assuming you were responsible not to take crazy loans.
I've been driving my subaru for 10 years now. Got the steering rack swapped bc it was leaking and now it feels brand new again. I intend to drive it to the ground. Meanwhile, 10 years is a dinosaur to some of my friends and they insist it's time for them to get new cars. Why people are willing to always have car payments forever is beyond my understanding.
Loved your video! Unfortunately, I think we will need more than $1 million going forward.😢
By the time I'm 65 years old (22 years from now) $1 million will probably look more like $600,000, not nearly enough to last the next 30 years past that. Of course that's an arbitrary estimate on my part, but the point is one million won't go nearly as far as it did back in 1980!
We probably should be aiming higher, as difficult as it may be.
The graph at 11:39 would have looked great with the average annual salary displayed. Great video.
I'm still believing the lie!!! 🤣 I read some of those late 80s and early 90s books that pushed the $1m goal. I was in my early 20s and I said, "Okay. Let's get after it!" I'm glad I started young.
Wonderful background and explanation. Love your presentation
That's great that you had a finance class! I'm 6yrs older and never had a single class in high school or college (granted I was a psych major) that even touched on investing. I plan to teach Eisley much earlier, but hopefully she will have some exposure in school too.
I bet Eisley will grow up with a great financial education from her parents!! ❤️ (I hope classes are more common these days as well!)
In the last 10 years my 401 increase each year greater than my salary. The more you have the more you make which makes it hard to decide when enough is enough.
Wouldn't it be insane if on occasion, on one day your portfolio can gain as much one year of your salary ?
@@FIRED13 yep, would be insane.
Remember you won’t take it to grave.
@@circrna , I’d rather leave some to
my children than become a burden on them.
@@Dave-sw2dm Lol. I do not have kids. This kind of thing did not occur to me. Enjoy your savings.
Hi Erin, thank you so much for your videos! I started saving in my 401k on my first day of work as an engineer in the 1980's. My employer had a program that would match up to 3% of my salary, what a deal! I can retire at any time now and not have financial worries. I try to be a good role model and encourage all young people to start investing right away.
Oh, I will refer everyone to your channel who shows an interest in investing. You're the best!
Thank you!!! I'm so glad you started saving right away!!! 😊
Engineer here, too. My older brother had been in the workforce for years before me and tried saving 1% for a little while but it was "too hard". I was given the book "The Wealthy Barber" from one of my business major friends my first week at work. I immediately started putting 10% in my 401k and haven't stopped. It isn't quite enough nowadays (I'm recommending 15% for my kiddos), but getting into the habit and not seeing every dollar in your paycheck as spendable income really counteracts our human nature to spend every cent on things.
You should point out to people that are investing in a 401K or IRA that the most important part of having one of these is the compounding they enjoy over many years. If you are investing in the market (mutual funds) and reinvesting the dividends you are buying more shares every pay period. The value of the IRA/401K may seem like it is not growing some years. However they should be looking at the number of shares they are gaining each year. Over time these shares will start growing in valve and in turn the value of your investment will grow. When you retire and start taking your dividends and capital gains in cash you will discover you can earn 7 to 15 percent every year. You can't get that kind or return on government bonds or a defined pension plan....
What camera are you using
Looks amazing
Retired six years ago with $200K. No problems.
Hey guys! What's up?
Great video, definitely learned a lot. I was really hoping to get away with a million as the goal and get out of the rat race early, but...hearing that my goal was a reasonable goal in 1990 kinda put things in perspective.
Alright. 2.5 it is, then. Yeesh.
Also once you hit 591/2 many move money from 401k to IRA for more investment options.
$1 million was also what I remember, in Canada. That was my goal, but I never really thought much about it. I just worked and saved. I retired two years ago at age 62, with about 1.3 million Canadian dollars. A third of that I will need to pay tax on when I pull it out of the RRSP (Registered Retirement Savings Plan), like a 401K I think. With my lifestyle I could easily live on less than half that after including my CPP (Canadian Pension Plan) and OAS (Old Age Security).
Thanks for the historical lesson on 401k and your humbling experience. The estimated check on what people have is always a good check. There is a scare tactic that you need all this money with a Monte Carlo and 99% success and to live to 95. Not sure many get this far.
Before I started consolidating accounts I had 3 separate 401k's, and a brokerage account with an IRA, a Roth IRA, and some non deferred investments. So yeah, like you say just looking at individual account balances is an incomplete picture. One other reason I think $1M is a goal is to be able to say you're a millionaire. It's always been a term associated with being wealthy. And it still is a nice chunk of change, but it's no longer the gateway to wealth.
Erin, you ROCK. I learn a lot from your videos. Thank you
Thank you!! 😊 that makes me so happy to hear!
The Blooper are the Best!!!!!!!!!!!!!!!!!!!!!!
People just need to save, it does happen keep saving
This video was very informative. Thank you, Erin.
Bloopers at the end?? What a great surprise.
Most videos I do have them 😊
My retirement account has gone down by 13.7% in the past year due to rebalancing I did out of fear uncertainty and doubt. What are best alternatives to take in other to secure a financially free retirement and achieve ultimate peace? I don’t want to fail after 42 years of working hard.
I have 3 retirement accounts. Two of them I set the investment allocation 25 years ago and never changed a single thing. One of them I watched a lot and rebalanced/traded/worried about. By far, the one with the worst return is the one I fiddled with. My advice to anyone would be to choose a low cost index fund and forget about it for the next 40 years, except for when you’re adding money to it.
Pretty low number for 2024 if you want to retire as well as you were doing while working. $40k (4 percent of $1M) annually is minimum wage in WA state as of Jan 1 2025. SS will help a bit.
Median household income 80K.
35% replaced by SS. Need to get 52K. Using 4% rule, 1.3M works. So roughly right... the more you stay away from median (ex. early retirement, less replaced by SS, income variance), need to adjust accordingly
The first $100.000.00 is the most important because your money grows exponentially from this point on: invest $7,000.00 a year at a return of 7% a year yields $100,000.00 within 7.84 years! Investing $5,000.00 per year balloons to $100,000.00 within 13.44 years!
IF you have 1 million in your IRA account and take the 4 percent out as recommended it would be 40k before taxes. Then take out 20 percent for taxes it would leave you 32K which is 2,660 per month. Add Social Security 2000 per person ( husband and wife)Estimated after taxes and medicare. It would leave 6,660. That is not a lot with the current inflation rate.
Here I am feeling like $1M won’t be nearly enough. I’m not banking on social security being around in 30 years, and lord knows what inflation is going to do, so I’m shooting for $3-4M or so.
Do those stats divide a couple's savings in half?
Thanks Erin, good video as always!
The biggest thing I learned from this video was finally figured out where Dave Ramsey gets his moronic 12% stock market portfolio rate of return expectations when advising people 😂😂😂
Thats not where he gets it. He gets 12% based on the s&p historical average of over 10% and its not hard to find a managed fund earning 12%+.
Nowadays, a million dollars is pretty obtainable for the average joe. As long as u have ur life in order (like went to university, invest early, buy a house, dont go thru a zillion divorces, dont spend beyond ur means, etc), u should have a million in assets possibly in ur 40s.... in your 50s or 60s for sure.
Don’t agree that a college education is necessary to achieve it. In fact, with the high student debt, it could prevent it
@@jrm2383 I didnt say it was necessary. I just said "for the average joe" to be a millionaire, a university education was part of having ur life in order. In other words, for most people, university is part of their formula for financial success.
And I dont agree with ur line of thinking. For some students yes, but for the large majority, no. Student debt does not prevent financial success. Maybe it does from the point of view of a former student in their mid 30s to 40s. But in the long run, when that person is 65, student debt is part of the life path to financial success for most people.
@@Dutchman-k5e Well she did say 20% of Americans have a million in assets. Pretty sure the 80% didnt have their life in order or didnt make wise life choices.
@@Dutchman-k5e Ya, my original comment didnt specify assets. My bad! But she was referencing assets in her video when she brought up the 20% so I was just basing my comment on that. I shouldve utilized the word "assets", but I overlooked typing that out. But if u read into my original comment, I did say "buy a house". And if I wasnt referring to assets, then buying a house would not have a positive effect on one's retirement savings. So it would be possible to deduce that I was referring to assets.
When I think of wealth or retirement, I always think assets (just real estate) rather than just savings like the 401k, IRA, pensions, etc. Most first time millionaires made their wealth thru real estate (or small business). So most people include their home equity as part of their wealth.
However, if strictly speaking in regards to one's retirement savings, then a million dollar nest egg is very, very, very hard to obtain for the average joe.