=== Azul’s “Scammer” Warning & Disclaimers. PLEASE READ!! ===
Be careful of scammers. In the comments, I will NEVER suggest you contact me, offer any investment products, recommend an adviser or anything similar. Some scammers ask for investment help in the comments and later, other commenters post how “great that idea/investment/person is” in the replies. This is a scam. Do not fall for it.
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NEED FINANCIAL ADVICE?
1) Google “fee-only financial adviser” or visit www.NAPFA.org
2) #1 question to ask any financial adviser is “Are you a fiduciary to me 100% of the time” Get the answer in writing
3) Please note that some people call themselves “fee-based”. This is NOT the same as fee-only. Fee-only advisers have committed to being a fiduciary to you 100% of the time.
4) Speaking just for myself personally, I would only hire an adviser who is a fiduciary to me 100% of the time. This is not a suggestion on what you should do. We are all different and I do not know your personal situation.
MY VIDEOS ARE NOT FINANCIAL ADVICE (Disclaimer):
This information is provided to you as a resource for informational purposes only and should not be viewed as investment advice or recommendations. To get professional financial advice from a fee-only financial advisor near you, please visit www.napfa.org.
The decisions on how to invest, when to retire and other financial planning topics are some of the most important financial decisions you will make in your life. I urge you to seek professional financial advice as you make this decision. Ideally from a financial adviser, AND a CPA AND an attorney. Having the perspective of all three professions will help you make the decision that is right for you and your family.
This information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor may NOT be suitable for all investors.
This information is NOT intended to, and should NOT, form a primary basis for any investment decision that you may make. Always consult your own legal, tax, and/or investment advisor before making any investment/tax/estate/financial planning considerations or decisions.
I don’t believe in “get rich” programs. Rather, I believe in doing your homework and working with professionals who are a fiduciary to you 100% of the time….(read more)
LEARN MORE ABOUT: 401k Plans
REVEALED: Best Investment During Inflation
HOW TO INVEST IN GOLD: Gold IRA Investing
HOW TO INVEST IN SILVER: Silver IRA Investing
Average 401k Balances by Age: Are You Behind?
Saving for retirement is a crucial aspect of financial planning, and one of the most popular retirement savings vehicles in the United States is the 401k plan. With the decline of traditional pension plans, these employer-sponsored retirement plans have become an essential tool for individuals to build wealth for their golden years. However, recent studies have shown that many Americans may be falling behind when it comes to saving for retirement.
To understand the state of retirement savings in the country, we can look at the average 401k balances by age. By examining these numbers, individuals can gauge whether they are on track or need to make adjustments to catch up.
According to a report by Fidelity Investments, the average 401k balance for workers in their 20s is around $11,000. While this may seem like a considerable amount for a young person, it’s important to note that saving early and taking advantage of compounding interest can significantly help in the long run. The report also revealed that individuals in their 30s have an average 401k balance of approximately $36,000, showing a notable increase as they continue to contribute.
For workers in their 40s, the average 401k balance jumps to around $93,000, reflecting the potential growth over time. However, this amount may still fall short of the recommended benchmarks for retirement savings. Experts suggest that individuals in their 40s should aim for a balance equal to three times their annual salary to remain on track for a comfortable retirement.
The study further demonstrates that individuals in their 50s, nearing retirement age, have an average 401k balance of around $180,000. While this may seem promising, it is still far from the suggested benchmark of eight times the annual salary for a secure retirement.
Factors such as market performance, contribution rates, and employer matching play a significant role in determining 401k balances. Additionally, individual circumstances, such as job changes, loans, and withdrawals, can impact these numbers. However, looking at the averages can provide a helpful benchmark for individuals to measure their progress.
If you find yourself behind the average 401k balance for your age group, it is essential not to panic. Instead, take this as an opportunity to reassess your retirement goals and develop a plan to catch up. Here are a few steps that can help:
1. Increase contributions: Review your current contribution rate and consider bumping it up. Even a small increase can make a significant difference over time.
2. Take advantage of employer match: If your employer offers a matching program, ensure that you contribute enough to receive the full match, as it is essentially free money towards your retirement savings.
3. Maximize catch-up contributions: Individuals aged 50 and above have the option to make catch-up contributions to their 401k accounts. Take advantage of this opportunity to accelerate your savings.
4. Diversify investments: Ensure that your 401k is appropriately diversified across different asset classes to minimize risk and maximize potential returns.
5. Seek professional advice: If you’re unsure about the best course of action, consider consulting a financial advisor who can help tailor a retirement plan to your specific needs.
Remember, it’s never too late to start saving for retirement or to make adjustments to your current strategy. By taking proactive steps and being mindful of your retirement goals, you can work towards catching up and building a financially secure future.
Biden has killed the American dream
Well I’m just a dirt bag construction worker. I joined sprinkler fitters local 281 Chicago in 1996. Two weeks out of high school. I earn 60.45 an hour and time and half and double time for overtime. I have a pension that pays 130 dollars per year of service. The union also has a supplemental pension we earn that pays us 11.85 dollars per hour worked. I’ve got 27 years of service and 700 grand in the sis fund. I’m 45 years old. Own 2 homes that are paid off. My wife’s a doctor….. I tease her all the time. You might have gone to school for 10 years but you’re going to work till 60 years old to catch up to my earnings.
At the very least, I now grasp the concept of leverage.
Creating wealth and financial freedom isn't as tough as many people believe. Building wealth and remaining financially stable indefinitely is a lot easier with the appropriate information. Participating in financial programs and products is the only true approach to make a high income and remain affluent indefinitely.
I have all the money I will ever need, long as I don't have to buy anything!
Ever time I watch your videos I get depressed. I have over the average amount for my age group (60 to 65) in a 401 yet it sounds like I’ll have to work the rest of my life. I guess the words “live comfortably “ needs defining. I think comfortably for some means traveling the world 2 to 3 times a year. Then others will describe it as paying your bills and eating out as often as you like.
We experienced the peak of our era, and now it is gone. Recession is tanking everything including 401K. My retirement equities portfolio of $750K is in the reds. I keep losing because of inflation. This world will fall to the corrupt rulers in the same way that Rome did. I'm sorry if you're thinking about retiring and you're worried that your pension won't be enough to meet the rising cost of living. Horrible foreign policies everywhere, bad regulatory policy, bad fiscal policy, and bad energy policy.
I am a retirement saver in my 50s and I am right in line with the numbers you reviewed here, but there are a few things that really have frustrated me, as I feel like I could have been doing even better – the first is the whole instability in equity investing – ie stocks. I know over time, it's always better, but twice now – 2008 with the Obama Banking Crisis and 2020 with the Biden economic meltdown I've taken considerable haircuts on my retirement savings – each time I had to recover those losses. In my 30s, I would shrug it off, but in my 50s (and hoping to get off the hamster wheel by 59), it's a much bigger deal. I am with Fidelity in my employer's plan and the investment pool is generally some of their better performing mutuals – but it didn't matter I still got whacked (as did a lot of folks I know) – so how do you maintain these numbers and deal with this? Fidelity will put these benchmarks out there because, because the more money we funnel in from our paychecks every two weeks, the richer they get – but honestly, in 2020 I'd have been better off stuffing it in a mattress…
All of this talk about retirement (death) is depressing. I am 67 and I intend to keep on keeping on until I drop dead. People who are keeping on are Trump (age 77), Biden (age 80), Chomsky (age 94), Kissinger (age 100), Buffett (age 92).
What do you think about Bitcoin?
it's recommended to save at least 15% of your income in a 401k. You can use online calculators to estimate how much you should save based on your age and income. Saving at least 15% of your income in a 401(k) can help ensure that you have enough money to retire comfortably. By saving this much, you can take advantage of compound interest and potentially grow your retirement savings over time. don't think I could retire with less than $3m in income generating investments and i'm not talking 401k, maybe $2m at the very minimum. I plan to work until I'm at least 45.
I may not have a lot in my superannuation but I’ve got a lot of equity in our house.
I am retired and have monthly income of $5,000 (after tax). I still have mortgage payment, but I live comfortably with my wife. It's not how much you make but how you spend it.
I’m 38. 200k in my retirement, 100k in my wife’s. I own two homes one is rented out and will be paid off in 24 months. The house is valued at 450k. I think I’m in good shape?
Question. When we read/hear of the average amount in a 401k and all; is that per 401k, or is that in composite for the given person ? As an example, I retired from the FDIC after 33 years. Disregarding my d.b. pension (and I'm working on another), but dis-regardling this….. My TSP (fed-Speak for 401k) is $1M. We had an add-on, true "401k", and that has $200k in it. I worked for a bank for three years after retirement, and my 401k there has $100k in it. My last gig here…. Yeah, I'm working toward a second d.b. pension, and my 401k has $10k in it (I just started a few months ago). So…. I actually have four 401k's. -Noting, I'll get around to throwing it all to the Gov's TSP for various reasons, but yassir. So, I have four 401k's; at (roughly)…. $10k, $100k, $200k, and $1M. Soooo….. Per the stats and all; does this mean it's reported as an average of $1.31M divided by four; or would I be reported as having $1.31M in my 401k ?
401k loans – So, here's something I did. I always had 401k loans outstanding, we could have 3 at a time. I would use the loans to invest outside of my 401k. Why? The 401k had somewhat limited choices, it was a way to fund a brokerage account right away, it forced me to invest more (my normal contribution plus what was going back into the 401k via the loan payments), as well I was on my own raising 5 kids so it was an added security blanket, that in the event I had an emergency need for money I had it "on hand". I also bought physical gold/silver as insurance, this was back when you could buy very close to, and sometimes at spot price. I would use the loans to fully fund my IRA (Roth IRA when those came about) each year and HSA. The rest was put into a brokerage account. IF I ever needed to pay back the 401k loans because I lost my job, I'd have just sold it out of my brokerage account. I also timed it so that all my 401k loans would be paid back in 2021 when I retired. Not suggesting it, just saying it worked out for me and the only risk was losing my job and needing to pay it back to avoid the 10%. Also, the loan initiation fee was only $10, and there was no maintenance fee – many 401k(403b) have that so if that had been the case I'd have factored that in – my company covered most of the admin costs for the 401k. I did btw also work for a 401k/403b management company in college so I did kind of know the ins and outs of it all.
All high risk numbers
So I started at 28 did the whole 15% and am 48 now.
I have been blessed with consistent raises since I started working and now make 8 times what I started at. So every time I hit the multiple mark my pay jumps so I feel like I am behind :).
In gross terms I have over 600k in retirement accounts. I did take 100k out during Covid because for my business it was allowed tax-free, so it went in tax-free and came out tax-free. So it allowed me a double tax savings and I used it to grow a business. So I consider that a very good investment both from the tax point of view and long-term passive income.
It's funny but to be 5x I would need to be between 1-1.5 million dollars when I hit 50. Even maxing it out each year there is no way starting in my 20s I would have been able to reach that number. So I am curious how they come up with these multiples. Do they assume no real raises over time or only inflation?
What is a 401K? I'm 65, is it too late to start?
I'm 40 and i'm probably too young for some of this but I love your content – keep it up!
I’ve been maxing my 401k either in % or total $ since I started my first job out of college. When I first started I’d hit max % contribution limits as my starting salary was low. As it’s grown I’m hitting max federal limit $ on annual 401k contributions.
What blows my mind is despite maxing I’m just at the low end of the 4x salary total 401k balance for leaving your 40s. I don’t know how much more I could be doing or getting better returns.
Why is there even a cap on your 401 k some people like myself that work alot of overtime are restricted ridiculous
Started very late 54 now 59 in my life to really build up my “own” TSP 401k and recently as of 1 month ago my TSP Roth. Reach 100k Mostly (401k) in March while “maxing out” new IRS allowances (catch up plan) every month since then. Also, the following has happened mortgage paid off. 2 low car payments with zero interest 3 years
remaining is our only real debt owed with a balance. Zero credit card debt cause it’s paid off every month. However, spouse and I pay $2200 a month in college credits for medical school fast track (BSN) for our son. Is there still a possibility to reach 10 times at 65? Wife is well ahead of me. Also have two pensions. While still making a point to enjoy today away with family vacations.
Why would you invest in a Roth if you are in say a 25% tax bracket but in retirement you are probably in say a 9% bracket so your tax liability is so low you have actually saved more money in taxes vs a Roth.
This is great but thanks to Biden and the Democrats my 401k is down 16.4% and there has been no growth for the last 20 months.
Am 68 and debt free. Didnt have a 401k until I was 45 at my company I worked for. Not rich by no means but enjoying life and still busy working pick and choose odd jobs. Love your channel. One thing I also learned along the way. Live rich dont die rich!
Yes, I would like to hear more about the Roth 401(k) benefits!
Regarding Roth 401Ks, if your company offers both, what percent should be regular and what percent should be Roth?
Hmmm… 60% of a teacher's salary in retirement is quite different from a doctors salary. Also, saying someone's savings when they're in their 50's should be 5 times the amount of their annual salary can really vary. If someone is making 50K, they'd have 250k in retirement savings by their 50's. Someone making 150K would have 750K. These would be very different lifestyles.
a little outline / summary
20-29 years olds – have saved $15,000 in their 401K
30-39 years olds – $50,000
40-49 years olds – $120,000
50-59 years olds – $200,000
60-69 years olds – ?
the question I have is by percentage how many 20 year olds in the US actually have a 401K, 30 year olds, 40 year olds, etc?
what about Roth conversions? I've tried to find easily digestible info on whether it makes sense or not and had no luck.
I have 9,800 in my 401k I'm 50. I started late, but I have a state pension that will be 98,000 to 103,000 a year. Plus I'll have drop account that will only be 300k when I retire at 57 or 58.
Plus by 62 with my SS and my State pension I'll be at 130,000k a year
Stop putting your money into a 401K. Oh it's painful to see people say their 401K 'made them X amount of $'. ?????? Invest your own money. Don't lock it up until you are old, in a government program. Learn to invest. Do it early and often. Could be in stocks, real estate, gold, whatever you have a plan for. Please young people, don't go down this government/Wall St scam path. Compound returns happen regardless of 401K regardless of what you've been told.
You only went up to 50s. Waste of time watching this! Why did you stop? Also it's kind of ridiculous to keep saying people should retire as early as they can, and then also advise retiring with 10X annual salary!
We are currently living on 40%-50% of our annual income. The rest gets invested.
If you never adjust your spending level to 100% of what you make, retiring early becomes easier.
401(k) loans are evil and if you get fired or laid off, the entire balance is due.
It is smarter to stick your hand in a toaster. That's if you really want to get burned.
I maxed out my 401k straight out of college making $8.75/hr. I retired at 46. It's easy. You don’t get rich by spending money.
These numbers means practically nothing. There is no practical use for this information.
Every dollar is worth less by the day, month and year; regardless of tax burden. I cashed out my 401k at 63 and paid the tax liability. Debt free and all physical assets is the retirement lifesaver. Good luck to everyone who wants freedom and the right to be left alone. Great channel, I like the measured narration.
The reality is most of us get fired a few times, etc. during our work careers and have to start over. Most of us are lucky to have anything after the "OLD LADY" runs off and we have to sell the house. So I like your pie-in-the-sky approach. Most of us take what we can get and save what we can then reduce our expenses to dirt floor levels. Then we buy most of our stuff at thrift stores, and hopefully, our health care program will take care of us till we die. Of course, I'm talking about us, successful retirees. Not most of the rest that is living in a refrigerator box somewhere in California!
My kids are both young adults 30 and 32. Both college educated with good career forecast. One of my children is married and one is single. Being single is a real detriment to being able to save. Not having another person to share expenses with, especially housing, makes everything harder.
Good info! Looks like I'm working til I die.
Comparing to the average doesn’t mean it is enough. Folks are woefully low in what you need to maintain a good lifestyle.
By the time you are 65 I feel you need at least $1,200,000 in your account. I agree you should find a fee only financial advisor so you can live off interest and dividends and you Social Security. At 65 your should be investing in lower risk investing. I also feel by 65 your home should be paid off. People think that Medicare will cost nothing. That is wrong. You will have your Medicare, Pard D supplement and you will have a medical drug plan. Those will have deductibles that have to be met. I am 65 and just retired. Learning about Medicare was not that easy. I found a good Medicare agent that explained the all the plans to me. A lot depends on the doctors you like, the drugs you will have live on and if you use a certain pharmacy that you like to use.the agent can find the best plan out there that fits your needs.
Roth vs Traditional 401. What if your state does not tax retirement income? In that case would it not make sense to avoid Roth since Roth you would be paying both federal and state tax upfront?
roth? back door? life insurance? Whole life? HSA? too much