You need to elaborate further on this. For most people a 401k is definitely the biggest chunk of a retirement plan. Sole? No. Majority? Absolutely. What else do you suggest for the average person without a pension?
I'm really low on my time line. Is there a sub reddit to understand 401ks and Roth. I never had anyone in my life to explain it to me and it was just like a year ago my boss yelled at me for not having one lmao.
They're just tax advantaged retirement savings. A 401(k) is usually available through your employer. You can put in about $17K every year. An IRA you'd set up directly through a brokerage, with about $5500 max a year.
For either you can pay taxes now (on what you put in, Roth) or later (what you take out, traditional).
I'm really low on my time line. Is there a sub reddit to understand 401ks and Roth. I never had anyone in my life to explain it to me and it was just like a year ago my boss yelled at me for not having one lmao.
What? It's not supposed to be an exact prescription. It's just using round numbers to show the difference of contributing early vs. late.
Ohh, sorry I get it now. It's a "If you started at...This is what it would take"
I basically spent my 20s with no match (companies that required one full year before matching) and terrible salaries - only have a pitiful 3k in a traditional IRA to show for that part of my life. However, at my current employer I now get a good match at 100% of first 4%. I'm planning on slowly increasing how much I contribute each year, starting this past year. Likely going to contribute 8% of my salary next year.
Currently in my early 30s, but with normal compounding expect to be right around the listed figure by age 39, assuming normal market returns and stagnant wage growth.
However, I do also have a decent Roth IRA balance and a health brokerage account with personal investments, with the latter being something I easily imagine is well above the average amount for someone my age.
Average 401(k) balance: $11,800
Median 401(k) balance: $4,300
Contribution rate (% of income): 7%
Yeah for sure - completely agree on being able to do great yourself with no match. I saved judiciously in my 20s, just in personal investments (I started investing at 18 due to the encouragement I got from my father, who was a fairly savvy self-taught investor; financial magazines were all over our house). Starting last year, I decided to buckle down on beefing up the 401(k) beyond "just" getting the match, and it's a trend I hope to continue.That's so good. Frankly, the match is great to get, but you can do great investing just yourself with no match.
That's a lot lower than the numbers you usually read about. Which I guess is good because the common wisdom about what you should have at x age was completely unrealistic bullshit for the current economic reality young working people face in this country.
Those numbers seem low to me...
I have at least that average in my RRSP/TFSA... and a defined benefit pension.
This is ridiculous. How is somebody supposed to afford a mortgage and a decent lifestyle while still putting 40k a year in an account they can't touch.
Emergency savings should be priority over the 401k.I'd have a nice 401k If I didn't get laid off ever 4 or 5 years and then have to use the 401k cash out to not be homeless while I find another job.
Like I told my 401k manager when he told me I had less than I should have.
Depends on if you think your expenses will be covered by your pension alone or if you will need more money. But it would of course be reasonable to have less in your 401k or IRA than what the average person needs.Stupid question, is this something I should care about if my job provides a pension?
Theres also a stock option plan where they match 50% of what you put in (you can contribute a max of 5% your pay toward buying stocks and they put in 50% of that amount too). I feel like with these 2 programs I should be ok, maybe I should start saving in a 401k anyway.Depends on if you think your expenses will be covered by your pension alone or if you will need more money. But it would of course be reasonable to have less in your 401k or IRA than what the average person needs.
Theres also a stock option plan where they match 50% of what you put in (you can contribute a max of 5% your pay toward buying stocks and they put in 50% of that amount too). I feel like with these 2 programs I should be ok, maybe I should start saving in a 401k anyway.
You need to elaborate further on this. For most people a 401k is definitely the biggest chunk of a retirement plan. Sole? No. Majority? Absolutely. What else do you suggest for the average person without a pension?
Stupid question, is this something I should care about if my job provides a pension?
If the only savings you have is 401k, you're 401fucked.It should be this in combo with an IRA.
As someone noted earlier, that's the point: Americans aren't saving nearly enough for retirement. Also America sucks because you have to save for retirement
If the only savings you have is 401k, you're 401fucked.It should be this in combo with an IRA.
Lots and lots of people would love to be able to save $19k a year. Only having a 401k is not a sign of being fucked at all.
Not really. If my wife and I both max out our 401ks for our career, we'll have over 5 million not including matching. That's far from fucked.
If you save $19k a year you will have way way way more than a couple of hundred thousand at retirement if you start at a reasonable age.If you only have a couple hundred thousand when you retire you're much closer to the fucked end of the spectrum.
You and your spouse are in the minority as outlined in the OP.