401K and Retirement

[Big dreams]

With the next generation of retiree's being those without pensions (401k only), how long do you think we will have to work for? Of coarse this is a loaded question with TONS of variables. I am just curious as to what you guys think will be the main difference in those who retire with pensions and those who only get 401k. I am not sure there is anyone who has retired with only a 401k at this point. I could be wrong but what are your thoughts?

[dutch boy]

I have shown both my boys how to pump and dump stock . I'm not sure 401K will be enough by the time they are in there 60s.. start small and work your way up it's not hard to make a few extra bucks. just my .02

[brnzbaklvr]

With a 401k I look at the 4-5 percent rule to keep it simple....Not the most accurate way but seems to be reccommended by lots in the know to get a rough Idea.... Figure out what you need to live on a year..... Then see if you can save enough in your 401k to draw 5 percent a year to reach that goal.... For 50k a year you will need a Million dollars..... Remember you should have Social security to supplement that also... If market trend history continues drawing out 5 percent a year shouldn't kill your balance...

[boneil]

So many variables. But those who actively manage their money will fare far better than those who blindly contribute year after year and hope they get out at the top. I bet there will be an age group of retirees who will be disapointed when they want to retire.

[Bamaman]

With the next generation of retiree's being those without pensions (401k only), how long do you think we will have to work for? Until age 80 or death????
Of coarse this is a loaded question with TONS of variables. I am just curious as to what you guys think will be the main difference in those who retire with pensions and those who only get 401k. I am not sure there is anyone who has retired with only a 401k at this point. Only those that have been successful working the stock market will have the resources to retire on just a 401K. I could be wrong but what are your thoughts?

There are many out there retiring without any old style pension of any substantial amount. I'd hate to be 25 years old and trying to bulld an investment portfolio with interest rates at a net zero and the stock market at very high (expensive levels). I hope my daughter's generation don't expect any inheritance from us Baby Boomers, as only the well invested (in equities) have just enough to last for the long run. If inflation rears its head or healthcare costs go much higher, we're dead ducks ourselves.

I'm thinking about investing in a new bass boat. The payoff comes with your sanity--not tangible returns.

[Big dreams]

With a 401k I look at the 4-5 percent rule to keep it simple....Not the most accurate way but seems to be reccommended by lots in the know to get a rough Idea.... Figure out what you need to live on a year..... Then see if you can save enough in your 401k to draw 5 percent a year to reach that goal.... For 50k a year you will need a Million dollars..... Remember you should have Social security to supplement that also... If market trend history continues drawing out 5 percent a year shouldn't kill your balance...

1 million for 50k/year, how long does that go for?

[Matt D]

1 million for 50k/year, how long does that go for?

If your 1 million is not gaining anything it lasts 20 years. Assuming you have it invested and it is returning around that 4-5 percent it will last your lifetime and then some since as you remove the 50K annually then the balance of the money earns a return that goes back in to the pot so to say. The one variable here is 50 K today doesn't go as far in 10-20 years as it does today. Lots of online calculators that you can put different variables in to and see what the results are or can easily be done yourself in Excel.

[brnzbaklvr]

If your 1 million is not gaining anything it lasts 20 years. Assuming you have it invested and it is returning around that 4-5 percent it will last your lifetime and then some since as you remove the 50K annually then the balance of the money earns a return that goes back in to the pot so to say. The one variable here is 50 K today doesn't go as far in 10-20 years as it does today. Lots of online calculators that you can put different variables in to and see what the results are or can easily be done yourself in Excel.

Exactly....How long it lasts is based on Market performance...It should last your lifetime if history trends continue but......just like any investment you never know....

While your in the Retirement Calculators look at the compounding of early investment and the effects of investing the max at an early age...... Those that wait until nearing retirement age are hurting themselves in the end in a big way...

[Matt D]

Exactly....How long it lasts is based on Market performance...It should last your lifetime if history trends continue but......just like any investment you never know....

While your in the Retirement Calculators look at the compounding of early investment and the effects of investing the max at an early age...... Those that wait until nearing retirement age are hurting themselves in the end in a big way...

I continuously preach to my young guys to at least contribute enough to get the company match if not more but it amazes me the number that don't even get that and leave that money on the table.