How much do you individually have saved for retirement? (2023 edition)

[Kodos]

It's time once again to ask FOFC: "How much do you individually have saved for retirement?" Here are the previous polls on this topic from 2013, 2016 and 2019. I hope everyone is movin' on up. It's a private poll, so people won't know which option you choose.

How much do you have saved for retirement (2019 edition)

How much do you have saved for retirement? (2016 edition)

How much do you have saved for retirement? (2013 edition)

[Kodos]

Oof. I only moved up one bracket since 2019. Stupid bear market! But I'm ahead of the average person in my age bracket.

https://money.usnews.com/money/retir...balance-by-age

Savings will go further in retirement if they aren’t eaten up by taxes. “We think tax is going to be a real problem,” Brabham says. To minimize how much people pay the tax collector later in life, Brabham tries to steer his clients toward Roth accounts. These require taxes be paid on contributions but then can be accessed tax-free after age 59 1/2.

I've switched to making only Roth contributions in my 403(b). Hopefully that pays off down the road. My Roth balance is about 11% of my total balance now.

[jbpostbot]

$50,000,000 in dogecoin. doubling your bets works -- living large!

[Lathum]

Originally Posted by Kodos

Oof. I only moved up one bracket since 2019. Stupid bear market! But I'm ahead of the average person in my age bracket.

https://money.usnews.com/money/retir...balance-by-age



I've switched to making only Roth contributions in my 403(b). Hopefully that pays off down the road. My Roth balance is about 11% of my total balance now.

I know I shouldn't be shocked, but we all live in a bubble of sorts. The amounts people have saved in my age bracket seemed pretty low.

We have been really fortunate. Wifes career has really taken off since the last one of these. She gets yearly executive bonuses well into six figures and we have reinvested a lot of it. She is 47 and the plan is retire at 55, do some part time consulting, then completely retire by 60.

[Bobble]

Nothing. But I was promised by the Dalai Lama that on my deathbed, I will have total consciousness. So I got that going for me. Which is nice.

[NobodyHere]

I'm up three brackets but last year I was pretty much treading water.

[molson]

Still depends on how long I live and get my monthly state pension payment.

But I definitely haven't contributed as much to my 401k and Roth as I hoped to by this point. Too much inflation and traveling. The latter is a calculated decision/risk though, there's definitely types of trip I want to take while I'm still kind of young.

[SirFozzie]

I literally can't save. I'm disabled, and if I have a certain amount of worldly goods, I lose a lot of the support programs I need.

[PilotMan]

Originally Posted by SirFozzie

I literally can't save. I'm disabled, and if I have a certain amount of worldly goods, I lose a lot of the support programs I need.

My son is in the same boat. We drew up our survivorship so that his inheritance is controlled by his brothers so he won't lose his. I almost doesn't seem fair that you don't get a shot to save something.

I'm personally up 5 brackets since the last poll, but I'm still not back to the peak I was at a few years ago. The tech drop has hit me pretty good.

[Ksyrup]

This is pretty sobering, especially the median:

New report flashes a warning light over 401(k) account balances | CNN Business

[HerRealName]

The 401K'ification of retirement has been a disaster for Americans and a boon to Wall St. I feel very fortunate that we have a defined benefit pension plan as well as a 401K. Of course that pension plan has been phased out for new employees at my company so Gen Z will be screwed again.

The 401K program was never designed to be the primary retirement savings program but once Corporations saw an opportunity to save a dollar, workers' fates were sealed.

[Edward64]

FWIW, the 401k was my main wealth builder and has worked out well. I agree it doesn't work for all Americans, it certainly can be tweaked more, but it does work for many.

In the commercial & non-unionized world, defined pension benefit plans are not portable from one job-to-another whereas 401k is. As someone that has jumped jobs 6 times, I'd take that.

We've got 401k, several variants of IRAs, the Roth & non-Roth versions, 529 plans, 403 plans, Coverdell plans (and I'm sure I've missed others). And so many different rules on what you can do or not (e.g. rule of 55 for 401k, 59.5 age etc.). I wish they would consolidate them somehow with easy rules and encourage & help regular folks save.


EDIT: HSA, FSA etc.

[flere-imsaho]

It works fine for financially-educated white collar workers like us, assuming we got reasonably mature in our 20s and started our savings then.

But for a huge number of Americans it's a terrible systemic solution for ensuring that workers can a) retire before they're really aged and b) retire and not be in poverty.

[Ksyrup]

Yep. I'm not where I want to be at 52, but I'll be clearing the kids off the payroll (slowly) over the next 4-5 years and paying the house off shortly after that, so I plan to accelerate the savings. And, I've still got more than my parents do right now in their mid-70s, which they have barely touched since retiring about a decade ago.

But I can't imagine thinking about retirement savings working lower-paying jobs and trying to support a family.

[PilotMan]

We were set back at least a decade, if not more, trying to support 5 people on one income. We simply could not put money into the 401k and we've taken a couple disbursements to deal with life. We're in good shape now, but we have a lot of catching up to do compared to where we could be.

[Edward64]

Originally Posted by Ksyrup

This is pretty sobering, especially the median:

New report flashes a warning light over 401(k) account balances | CNN Business

I've seen average/mean stuff reported before and I'm sure there is a downward trend (e.g. Vanguard has enough data points where it's pretty representative).

But I've always had an issue with statements like below as I believe it's misleading with just savings plan/account. Vanguard should provide "average/mean balance by person/SSN" or "average/mean balance by person/SSN in an employer-sponsored savings plan". In other words, I believe people that have Vanguard accounts actually have more $ than implied in below statement because a fair number probably have multiple Fidelity/Vanguard accounts.

The average balance in employer-sponsored savings plans last year was $112,572, well below the $141,542 recorded in 2021.

Don't ask me how (I forget exactly how), but I've got 3 different Vanguard savings plan/account and I've got 5 different Fidelity ones (my wife has 3 Fidelity). I remember one time a Vanguard/Fidelity person told me they were not allowed to advise me about combining 401k/IRAs and so I've always kinda left them be.

[Kodos]

The 'magic number' to retire comfortably hits a record high: study

Oof. These numbers are shocking.

◾ Gen Z expects it’ll need $1.63 million for retirement but has only saved $22,800 on average – a $1.61 million gap

◾ Millennials think they’ll need $1.65 million but have only saved $62,600 on average – a $1.59 million gap

◾ Gen X forecasts it’ll need $1.56 million but has saved on average $108,600 – a $1.45 million gap

◾ Boomers predict they'll need $990,000 but they've saved $120,300 on average – an $870,000 gap

Even high-net wealth people registered a wide gap. They expect they’ll need $3.93 million to fund their lifestyle in retirement but on average only have $172,100 saved, the study said.

wsj.com

But WSJ suggests that people don't need nearly as much as they think because Social Security pays better than people think.

According to a new survey from Northwestern Mutual, the average American thinks he’ll need $1.46 million in savings to be financially secure in old age. If that were true, it’d be bad news. As USA Today recently reported, the average U.S. adult has saved only $88,400 for retirement.

...

Why, then, do seniors report such high levels of security with seemingly paltry levels of savings? One reason is that Social Security benefits are more generous than people think. An average couple retiring in 2022 received total annual benefits of nearly $46,000, up from around $34,600 (in today’s dollars) in 2000. While hardly extravagant, a typical couple can expect an income more than twice the elderly poverty threshold before they touch a penny of their own savings.

Conventional financial planning also overstates the income seniors need. That owes partly to planners assuming that seniors require the same amount of money throughout retirement. Yet as economists Michael Hurd and Susanne Rohwedder of the Rand Corp. have shown, average household spending drops by roughly 40% from age 65 to 90. Seniors aren’t running out of money—spending on gifts and donations increases with age. Retirees simply spend less on themselves than financial planners assume.

Planners likewise forget that much of adults’ preretirement income is spent on their children. The U.S. estimates that a couple earning roughly $83,000 with two children spends more than $26,000 annually providing food, housing, healthcare and other needs for their children. That’s money parents can’t spend on themselves. Of the income they could devote to their own needs, Social Security will replace around 60%. The upshot is that parents need less savings on top of Social Security than one might think.

The wife and I are doing pretty well with our 401(k)s, we'll have the house paid off before retirement, and we'll also have college expenses behind us before retirement. I'm hoping to really boost 401(k) contributions once the kids finish college. So I think we are on track at the moment.

[Lathum]

We are already about the Gen X number and are debt free other than the mortgage and my BMW lease. We also have quite a bit in college savings for the kids and wife and I both stand to get a large inheritance. That doesn't factor in SS. All in all we are in as good a spot as you can be. My youngest is 11 so the plan for my wife is work about 7 years or so then when daughter heads to college maybe do some consulting work for a couple years and by late 50s full retirement and enjoy ourselves.

[Ksyrup]

I am so sick of reading so many of these articles that talk about what a bunch of dumb Americans in each age bracket think they need to retire. In what world is that relevant - other than educating people in the delta between what they've saved, what they think they need, and what they likely actually need? But most of these articles are solely about what people think they need, with no analysis/discussion at all.

I think I need $15M but I have $6.32 - I guess I'm screwed!

[NobodyHere]

And what's even more troubling is that the numbers in Kodos's report are averages and not median. Which means the amount the common person has is much much lower.

[Ksyrup]

Originally Posted by Ksyrup

Yep. I'm not where I want to be at 52, but I'll be clearing the kids off the payroll (slowly) over the next 4-5 years and paying the house off shortly after that, so I plan to accelerate the savings. And, I've still got more than my parents do right now in their mid-70s, which they have barely touched since retiring about a decade ago.

But I can't imagine thinking about retirement savings working lower-paying jobs and trying to support a family.

Odd to read this from 2 months before my dad's accident. Thankfully my parents have a decent nest egg, but all it takes is one major medical issue to wipe the entire thing out. Fortunately, he's made pretty good progress and - at least for now and the foreseeable future - they can both live independently thanks to their Part G supplement paying for pretty much everything Medicare didn't pick up and his progress with recovery. But in a worse-case scenario where he might have needed to be put in a SNF or ALF, $800K would not last very long if one or both of them lived, say, another 10 years.

[Danny]

Not quite where id like to be. I answered between my wife and I. I know it says indovidually but almost all of it has been accrued during marriage which is marital property. Our kids are 4 and 1 so currently we are on one income down from two as ive been a stay at home dad for a year now. I dont expect much if any progress until the kids are in school and I can work regularly again.

[Masked]

Even high-net wealth people registered a wide gap. They expect they’ll need $3.93 million to fund their lifestyle in retirement but on average only have $172,100 saved, the study said.

The definition of high-net wealth is odd. Standard definition would mean these individuals have at least a million in liquid assets. Does it matter if those funds are in a retirement account of a normal brokerage account?

[HerRealName]

Originally Posted by Masked

The definition of high-net wealth is odd. Standard definition would mean these individuals have at least a million in liquid assets. Does it matter if those funds are in a retirement account of a normal brokerage account?

Professionally, we always included 401K and other retirement savings in Net Worth calculations.

[Senator]

It will be interesting the wealth shift in the next, say 7-10 years when the Boomer Gen starts cycling out. I suspect, a lot of Millennials will come into some hefty inheritances or real estate. Just not as fast as they would prefer it. I have no basis for this other than observation, but you can’t take it with you.

[Kodos]

You could by getting a solid gold casket. It’s the Trump way!

[Edward64]

Originally Posted by Senator

It will be interesting the wealth shift in the next, say 7-10 years when the Boomer Gen starts cycling out. I suspect, a lot of Millennials will come into some hefty inheritances or real estate. Just not as fast as they would prefer it. I have no basis for this other than observation, but you can’t take it with you.

There'll be trillions transitioning to a younger generation as the boomers pass away.

The Average Baby Boomer Has a $1.2 Million Net Worth — See How You Stack Up

According to financial market intelligence firm Cerulli Associates, an incredible $84.4 trillion in assets will pass between generations by 2045, greatly affecting the millennial generation and beyond.

But I suspect like much of everything else, that wealth is concentrated in the 20 vs 80 group. Median is more relevant than average in this case.

According to a MagnifyMoney analysis of Federal Reserve data, the average baby boomer now has a median net worth of $206,700. However, the average net worth of baby boomers is considerably higher, at a whopping $1.2 million. These figures can vary so significantly because a small number of super-wealthy boomers likely pull up the average.

[flere-imsaho]

Yeah, I suspect millenials, writ large, aren't going to be getting a lot.

[cuervo72]

Heck, there is probably still a decent amount of money held by some Silent Generation folks -- like my in-laws. No idea how much they have in particular, but I'm pretty sure it's more than my Boomer parents.

There will probably be some redistribution, but I'm generally in agreement that it's more a select number of rich booomers who will be passing to a select number of X/Millennial/whatever. On the whole I'm not sure it's going to really help.


(It's funny, more and more I compare trickle-down economics to...FOBL finances. About 15 years in or so, the league had gotten to the point where some owners made money by tanking -- tanking was identified as the best way to compete well before NBA/MLB GMs got there -- but enough owners were tuned out so they sat on the money. Now, FOBL was a little different because it was a closed system (overall money remained constant), but this resulted in decreased FA salaries, which led to less money "velocity". While overall money remained constant, the available money dried up. Things only got better when we instituted a cash cap. Then, more money became available, FA prices went up, everything became livlier.)

[Danny]

I think part of it is people living longer than anticipated years ago. My grandfather was a doctor but they had basically nothing left by the time they passed besides their house. Neither my wife's parents or mine will have anything significant upon passing due to poor financial decisions.

My wife and I will be fine provided no total collapse and making sound decisions as we do have her social security, my california pension along with other retirement we will continue to build up. Plus pur home is likely to increase in value and we have a reasolable mortgage and great interest rate. Just a matter of how much traveling and extra stuff we can do in retirement

[Edward64]

Originally Posted by Danny

Just a matter of how much traveling and extra stuff we can do in retirement

FWIW, if I could tell my younger self in planning to travel a lot during retirement, I'd say start with acquiring air & hotel points now with credit cards ... assuming you have the discipline not to misuse the credit cards.

Pick some zero annual fee cards and charge your regular household expenses, utilities, insurance, medical bills, apt rent etc. to them. There are some annual fee credit cards with "offset benefits/credits" that may be worth it if you travel some every year already.

Additionally, commit to specific ecosystems. You don't want to spread out your charges across too many different credit cards. Specifically for budget hotels, I think the IHG hotel system is great. For budget air travel, different airline alliances are stronger in one region than another. For Asia, SkyMiles is lacking.

[cartman]

yeah, the travel thing is a good point. I'm now Lifetime Platinum with Marriott, and I am almost at the million miler mark for United. If it wasn't for COVID I would have already hit it.

[Edward64]

Originally Posted by cartman

yeah, the travel thing is a good point. I'm now Lifetime Platinum with Marriott, and I am almost at the million miler mark for United. If it wasn't for COVID I would have already hit it.

I'm Marriott lifetime also & Delta million miler.

But nowadays I'm more of the budget traveler and have found IHG better price wise than Marriott in Asia and Europe (comparable in the US). Accor is pretty good also but their credit card/points accumulation really sucks.

My biggest beef is I've not been able to use the free Marriott lounge access because I don't stay at the higher end Marriotts anymore. Those were the days. Damnit.