1. Max retirement match by employer
2. Live below your means
3. Pay for experiences
4. Invest remainder for future (after safety net)

That's probably the most ideal tradeoff for people who will earn around the mean long term.

If you are way above average for your age you can afford to spend more and save less as a %.

Unless you are trying to retire early.

I think once you hit like 5k invesment per year, while healthy you should be spending the rest doing things.


Edit: there's a good chance 5k is too high. I don't know off the top of my head.

saving 5k is not that high. I put 15% into my 401k. it is important, the money you put in now will grow and compound upon itself the longest. once you are used to not having it in your take-home then you pretty much forget about it.

meeting the match is obvious but Im also a believer in 2 and 3. I would much rather spend money in big chunks on awesome trips/etc than bleed it out on things like eating more expensive meals than I need to or buying extra crap.

I mean 5k(adjusted) a year gets you well over a million(adjusted) at retirement which can get you 50-70k a year in perpetuity. That seems more than fine. It all depends on your goals though, especially when it comes to age of retirement and whether you want to set up your kids, etc.


There are a lot of cool investment startups doing interesting things to help people invest. Betterment. Digit. Acorn. A few others I am forgetting.

Edit: just through it in a calc. 5k a year for 40 years puts you at 1.07 MM at the end assuming 7% average. Seems like a decent goal for anyone and more than plenty in terms of a comfortable retirement.

Yeah but a million in 40 years isn't gonna last you forever, inflation yo. And you can't get 5-7% on it anymore without a decent risk to your principle.

Obv doesn't factor in SS or other forms of income, just keep that in mind. Also SS may not exist in 40 years.

With that said in a firm believer in spending while you're young but putting 15% in your 401k is completely fine if you're happy doing that and you're not living frugally to do so.

Adjusted. Yo. 5k a year in today's dollars nets you 1 million in today's dollars.

Fair enough, but that still doesn't address the fact that you can't get 5-7% risk free or close to it. I wouldn't want to retire on a million. It's really not as much as you think when you run monte carlos even with 5-7% avg return (which requires a good amount of risk).

The stock market returned 8%, over 40 years the S&P500 is risk free there is literally a 0% chance the US economy will implode.

Agree that a million isn't even close to enough to retire though. Not sure which return Custer used but I can't get his numbers in real terms.

Well obviously I wasn't suggesting there's an investment vehicle that will write you a 70k check at the end of every year if you let them hold a million.

But in terms of thinking about the value of a retirement fund that's an easy way to visualize.

1 million is plenty as an individual. You will likely have a decent amount of equity in a house, maybe a spouse, and as long as you don't retire in nyc you will be fine.

You guys overestimate the expenses old people have. Without a doubt.

There are millions of people who comfortably retire on far less than a million.

That's not what I'm meaning by risk free. While long term the S&P is a fairly safe investment, short term it can be quite volatile (as we're seeing now). When you're retired and no longer generating new income you want to keep risk as low as possible since a rapid decline in your investment is a disaster. If you were heavily allocated in equities in retirement you'd be completely ****ed during a prolonged bear market




I deal quite a bit with retirement planning for my job. Granted it's an expensive area, and there are a TON of variables (like if you have other forms of retirement income, if you fully own a home, and obviously your average annual expenses) but I definitely wouldn't classify a million as "plenty" if you're planning on retiring at 65, unless you plan on living very frugally when retired.

wsop,

Way more details needed. Max employee match should be a given, after that a lot of variables come into play. As Spurious said, expected future earnings matter a lot.

To live comfortably it is plenty. Saying its not is basically fear mongering. You really cant find a single source that says you are at risk at 1 million.

I would bet more than 80% of people who retire dont have 1 million in their retirement account.

edit:

"Even that is more than what many retirees have actually saved. The average retirement savings is about $104,000 for households with members ages 55 to 64 and $148,000 for households with members 65 to 74 years old, according to an analysis by the Government Accountability Office"


Also by live comfortably I mean not worry about money, if you want to travel the world every year and buy your grand kids cars on their 16th birthday its obviously not enough.

I never said you were at risk. Anyone can retire on a million of course. I can live and could get by right now making $15,000 a year in NYC. I'd just live extremely frugally. So we're just debating on the meaning of living comfortably. When I retire I want to do a whole bunch of cool stuff I couldn't do while I was working (namely traveling). I don't want to worry about money. Now if you want to hang out in your house a lot, go fishing and stuff, and live off like 50-60k in today's dollars and consider that comfortable, you're right. And if you retire at the wrong time on a million even that might be too expensive and you'll have to go back to work.

Like I said, I deal with this pretty extensively and have a pretty good grasp on how long the average married couple can last on a million and how much they can spend annually and expect to have that money last forever.

My retirement standards are probably higher than the average person, but you're underestimating retirement expenses, especially those when you become a super-old.

Come on man, now you are talking about the average married couple lasting on a million? That isnt even close to fair in representing my point.

Also obviously this is ignoring any form of government aid. and if you factor in the 99.9% chance USA will have universal healthcare by this point, 50-60k expenditure a year will make you king.

If you plan on being single forever, never having kids, want to live in an inexpensive location, and don't want to travel or have luxuries in retirement then yes $1,000,000 is enough to live comfortably.

This is 2016, where woman can work too and save.


obviously 5k a year is my suggestion on a per income basis.

You do realize you are effectively fear mongering? if you want to live in an expensive location, move their now so you can increase your income relative to your expense, which allows for you to invest more. People dont live in rural alabama with dreams of retiring in NYC, people tend to retire in places where its nice and cheap.

And obviously I am not advocating to never invest more than 5k per year, I simply mentioned you will do fine in retirement if you do.

I mean, I actually 100% agree with your original post with the numbers 1-4. Not sure why I am debating with you over the value of a million while making myself look like a Long Island snob, lol.

To end the derail, I pretty much agree w/ Custer's original post, with the caveat that a million isn't a magical retirement number. But yeah, retirement match, spend on experiences, don't live above your means and save what you can. If you get a decent windfall on a bonus or something save some but make sure to spend on a cool trip or something. If you have hobbies or passions invest in those if it makes you happy. If you plan on having kids or getting married soon and want to buy a house you're going to save a lot more than a single guy even if you have the same disposable income. So yeah, it depends. When you're young err on the side of spend.

Doesnt matter anyway. Once robots are around cost of living is going to go down so much.

Jk baby boomers gonna **** us all

Saving while young is much more important, that compounding interest. Currently saving around 40% a year.

With that said, have to enjoy life

Didn't read the last 3-4 posts but Mullen has the view everyone should have who was able to find this thread about dating while at university on a poker forum...

But Custer is clearly right to LOL at using the term "average" and the possibility of a million in the same sentence. Just yesterday the biggest trending story on social media was the fact that like 60% of Americans would be financially devastated if they occured an unforeseen $500 expense

Hmm spurious's point about your first 10 years being critical is interesting. Could really bet on yourself and live it up in a way

I know doing max with employer match is key while trying to increase income. The frykee post in the goals thread was motivating cause he had different streams of income.

What's the ideal.amount you want liquid as a single male?

Increasing your earnings potential > saving when young.

But you should do both.

Been chatting with this Tinder girl. She asks a lot of questions and seem to want the convo to keep going. Im up for relationship or casual sex. Like her so far. The only obstacle is that we live about 1,5 hours from each other. Whats the next step?

1. Buy her a dinner out where she lives
2. Ask to get her number to get the feel and discuss what to do
3. Other options

Disagree but yes you should do both.

As far as liquidity depends on your job stability and goals

Mbn to have no student loans.

It is, worked my ass off I college working two jobs, scholarships, state school, laid loans off a few months into working