Average 401(k) Account is $91,300.00
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Counterpoint.
31% of Americans have no retirement savings at all. 31% of Americans have no retirement savings at all - Aug. 8, 2014 and though my 401K is well above "average", I nevertheless have growth vs safety concerns.....and RMDs are just over the horizon. |
Yes, good news for savers and bad news for those that didn't or couldn't afford, to save for retirement. I also know people that had to cash in their "nest egg" accounts during the recession.
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If you retired at 62 but have good money in a retirement account, SSI might not matter so much ;)
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91K doesn't seem like it would last very long, at least not in this country.
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Don't forget there are a ton of people with young 401k accounts.
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Yea, that too.
Average of what? Everyone in the USA including stay at home Moms that might have a part time job to get a few extra $? Everyone over 18? |
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The bad news: most people will need far more than that for a comfortable retirement. The common 4% rule for example, dictates that $250,000 would provide only $10,000 a year in retirement income.
Of course, 401(k) balances are just a snapshot of the retirement savings landscape since savers often have multiple investments and accounts like Individual Retirement Accounts (IRAs) and annuities. Fidelity, for example, found IRA holders had an average balance of $92,200 in 2014 |
I found this in a report on California's retirement system:
Even if employees in a DC plan do manage to earn the same rate of return as a DB plan fund and resist the urge to cash out prematurely, at the end of a full career they will likely receive a smaller benefit than similar employees in the DB plan. For example, an employee in a DB plan (with a benefit formula of 2% at age 60 and employer and employee contributions of 10% of pay) hired at age 30 with a starting salary of $25,000 and 5% pay increases each year will have a retirement benefit with a present value of $732,100 upon retirement at age 60. In contrast, the retirement benefit for an employee in a DC plan hired at the same age with the same salary (assuming that the DB plan and DC plan both earn a rate of return of 8%) will have a present value of $497,529 upon retirement at age 60. |
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There are many ways to consider what you feel will be required in retirement. Plus many ways to do it.
The ways will change with the generations. It becomes an equation with a lot of variables or intangiables . Mind the aspect that nobody really knows the future. Doing something is still mandatory of course. I expect interest will remain very low for the next decade or two yet there is no way to be sure. Other than it might impact earnings on investments. Inflation has been pretty constant over our working years. The severity or lack of severity in the future is yet another serious potential issue. Assuming the buying power in the future is the really dangerous component. For example what we as a couple could actually live on twenty years ago probably would only cover the groceries today is pretty much factual in Canada anyways. |
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I also know (numerous) people that became multi-millionaires during the recession. :laughing: . |
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