There is no magic number you need. $3m will get you some lifestyle. You could retire at 40 with only $300k if you want to live the lifestyle that means (move to very low cost of living area where you walk to groceries). And there is a good chance social security will continue to provide a minimal income once you reach whatever age.
I saw a report that someone my age will need $3m to retire at 65. The average total income from 22-65 for people my age is around $1.4m. So I guess we never get to retire.
bluGill@kbin.social 8 months ago
captainlezbian@lemmy.world 8 months ago
Not enough income to live indoors, but income nonetheless
bluGill@kbin.social 8 months ago
I know places in the us where it is enough. Towns with populations of 500 are generally cheap. Not much to do in them.
captainlezbian@lemmy.world 8 months ago
You’re right. In a 1 bedroom in a rural city in a low cost of living state living as a freegan who never needs anything like medications you might be able to live off that.
I for one think that the situation with social security is that my parents and grandparents took one of the best things my country ever did, robbed it blind, and pissed all over it. Fuck. That. Shit.
And yeah I’m prepared to work the rest of my life until I get too old to work and then die homeless. That’s not what people should live like. We had something beautiful and let it fall into disrepair
BenadrylChunderHatch@lemmy.world 8 months ago
Let’s say optimistically that you die at 70. That’s 30 years living on 300k, so 30k per year on rent, food, utilities and medical. You could live indoors for that amount in some parts of America in 2023. But what about in 2053? Inflation could have a huge impact on your cost of living and if you’re already living close to the bread line it’s hard to find savings anywhere. You could put your money in stocks but likewise you’re at the mercy of the market. It might be fine but if the market tanks when you’re 65 you could be in big trouble.
dgriffith@aussie.zone 8 months ago
Compound interest might get you to that goal, maybe, if you start saving now.
The “start saving now” part is the bit that fucks most people.
sqw@lemmy.sdf.org 8 months ago
savings interest rate was less than 0.1% for about the last 10 years so even thats not looking too solid
M0oP0o@mander.xyz 8 months ago
If inflation is as high as it currently is compared to the collected interest it does not matter how much compounding is done, the buying power of that savings will flatline. Add to this equation the need to eat and live now, the amount most put away is minimal and when something comes up even those meager savings are wiped out.
The math in most households is not working out. Debt is becoming peoples rainy day fund, people are unable to even pay their property taxes with the now insufficient government minimum pensions (and a lot of people don’t think these pensions will even be there when they are eligible). This leaves people selling things (reverse mortgage, downsizing, moving to lower COL areas, etc) taking on debt to live now and generally giving up.
If you put away $50 a week for 10 years you end up with (based on a generous average 2% rate) $28,554.34. This seems like a good amount but keep in mind that you put $26,000 into this. That $2554.24 does not beat the loss of buying power over 10 years. You need much closer or better returns vs inflation for this to work in your favour. I was once told that you would be better off buying some raw metal like lead, or copper as the return on simple materials at least keeps up with costs.
dgriffith@aussie.zone 8 months ago
You’re absolutely right, but I’ll just point out that superannuation (pension) funds in Australia are hitting 8 percent annual returns over a 30 year timeframe. You need a broader investment base to do that, and that’s hard for individuals to do by themselves. How do you diversify your $50 a week investment to maximise return? You can’t.
Here, superannuation funds do all the heavy lifting for you, it’s mandatory for employers to put a nominal amount of each pay into one. There are no minimum investment amounts with them and fees are waived if the balance is below a few thousand, so even if it’s $10 a week you get something back eventually.
So it’s possible to have it work if your government sets things up right.
M0oP0o@mander.xyz 8 months ago
Oh I am not saying people should be the ones wholly responsible for their retirement portfolio, and congrats for having a competent government pension option. I would love to have access to something better then the market equivalent to roulette.
Hell in Canada the pension plan (that you can not get enough at the moment) got a stunning 1.3% return this year. And unlike other plans you need to pay extra for 40 years to get additional funds at the end (no one I know of even thinks of doing this). And some parts of the county want to spin off there own pension plan (Alberta) even though most expect it to perform worse (due to a smaller investment base and using a bad private firm to run it).
FlyingSquid@lemmy.world 8 months ago
When over half of Americans live paycheck-to-paycheck, saving is not even a possibility.
dgriffith@aussie.zone 8 months ago
Is there any form of “mandatory” saving in the US? I know you guys have company pension plans of some sort, is there a government version?
Eg where I live, Australia, employers are required to put in 10 percent of an employee’s wages into a superannuation fund. This is basically “invisible” to workers, it’s a cost that’s factored into the cost to have an employee basically. The superannuation fund can be a “default” one selected by the business, or an employee nominated one, and you can transfer/roll over your accumulated funds between any superannuation fund you like as you hop between jobs. You can draw from it in some specific dire circumstances, but usually you can only access it at retirement age.
It seems that a lot of things in the US are carefully designed to keep you in servitude to your current employer, which I find a little ironic coming from the land of the free.
FlyingSquid@lemmy.world 8 months ago
That’s essentially what social security is, but it’s constantly being attacked with death by a thousand cuts, so most people under 50 don’t really expect to see much of a return.