Retirement: Is Your 401(k) Total Above Or Below Average?

BY PAUL KATZEFF
INVESTOR'S BUSINESS DAILY

02/12/2015 08:02 AM ET


Click Graph to View Enlarged Image

How does your 401(k) retirement account balance compare with balances for other people your age?

If your account balance lags the average for your age group, that's likely a sign that you need to revise your retirement planning.

You may need to boost the percent of pay that you contribute to your account, or allocate more of it to growth-oriented investments such as stocks and stock mutual funds rather than, say, cash or bonds and bond funds.

To pump up your nest egg's prospects, you should also consider kicking in enough money to qualify for the maximum company match your employer may offer. That gives you more flexibility as well as more cash to put to work as you seek funds and stocks to invest in, as well as an age-appropriate allocation to bonds.

The need to fend for yourself with a 401(k) balance that's as large as possible keeps growing.

Only 7% of Fortune 500 companies offered a traditional pension plan to newly hired workers as of year-end 2013, according to professional services company Towers Watson. That compared with 51% as of 1998.

So how does your 401(k) balance stack up?

The average 401(k) account balance was $248,397 for a plan member who is in his or her 60s with 30 or more years on the job, as of year-end 2013, according to a recent report by the Employee Benefit Research Institute.

For a plan member in his or her 50s with the same tenure — 30 or more years — the average balance was $252,418.

Plan members in their 40s who have worked more than 20 years, up to 30 years, have balances that average $154,228.

The average balance was $66,139 for thirtysomethings with more than 10 years, up to 20 years, under their belts.

And plan members in their 20s, who worked more than five years, up to 10 years, for their current employer, average balances of $18,351.

The overall average account balance as of the end of 2013 was $72,383.



Read More At Investor's Business Daily: http://news.investors.com/investing...size-of-a-401k-account.htm#ixzz3SaU0Z8wM
Follow us: @IBDinvestors on Twitter | InvestorsBusinessDaily on Facebook

I'm above average but it doesn't make me feel any better. I still wonder how much will I really need (what is inflation going to be in 25-30 years?) and watching my accounts value stall out for the past year while Wall Street is at all time highs doesn't make me feel warm and fuzzy.

I'm screwed...

Me too ! The big mistake was passing age 50 before starting to think about how much money was needed to retire.

I'm a bit above the numbers listed, but what I'm really worried about is the Government stealing it from me and then telling me how much they are going to let me have back.

My mistake was getting married. Well, that's not exactly correct. It was allowing my wife to push our standard of living to the utmost limits of my salary. Add to that, the salary has been stagnant for since about 2008 or 2009.

The only way I can see out is to start my own business with the plan to be increasing my income and putting a healthy portion away for the next 20 years.

I pay attention to our numbers, but not the numbers provided.


always figure to be ok one way or another

we can live really cheap and have fun.

I'd venture we could both quit working now and live off what we've invested and saved easily until I'm dead


but we kinda like spending money on some things, so we still work

and nope our 401K is not even close to the average

This article is very deceptive. Who cares if you're average if the average have not saved enough to retire?

As a general rule, if you don't want to run out of your savings and allowing for inflation, you'd better not spend more than 4% of your savings each year. For a 250,000 401(k) that means you should not spend more than $10,000. Pretty shabby retirement unless you have any additional income. Don't forget Social Security.

Dave Ramsey, as part of his seven baby steps to debt free living says to max out your IRAs then make a minimum contribution to your 401K, enough to collect all matching funds from your company, up to 15% of your income.

http://www.daveramsey.com/new/baby-step-4/

Scott - I had hoped to retire at age 62. I can still do that IF I just stay home and watch TV

The $$$ Social Security pays out at age 62 sucks.

I don't know your health situation, but hopefully you'll still be able to bring in an income at 62 and keep boosting that fund. That's my hope. I'm soon to be 46, and if my health follows that of my dad and his older brother, I'll keep pushing until my late 60's then hang it up.

An older co-worker is just about 62 and plans to put off collecting SS for a few more years so that the monthly pay out increases. His plan is to work part time and pick at his 401k and the like for a few more years.

I'm a bit younger than most here, and did at least start putting a little away back when I started my first post-college job. I'm bit above average, but not sure that this article really tells you anything, especially in the younger age gaps.

A 10 year gap in saving is huge if you compare 10 years of a person saving some for all 120 months of it vs. someone saving nothing. Even at $100 a month that's $12k before you talk interest, especially the TVM of that $12 when that 20-something hits 67 years old. In 30 years that $12k is worth over $50k at %5...even if you don't add another dime to it. Keep the same $100 going in every month and it's worth over $136k plus.

I get a chance to talk to and hire new workforce entrants and it's so hard for them to see how important saving now is...the new workforce is a bit naive in financial matter IMO.

As is often the case, these types of articles generalize too much to truly be that helpful/informative.

Scott - health situation is great and job situation is okay. Like you, I'll keep working until my late 60's. Only real problem is my boss ... he is an azzhole.

Someday you can throw the alarm clock out the window and leave his sorry azz behind.

Oh, and regarding SS, it will be a pleasant surprise to me if it's still there when I'm old enough to get it (approx. 29 years). I'm not planning on it by any means.

.... do I ever love those words.

NTG -- 9 out of 10 people I work with, who are under 30, feel that way.

My 401-K was doing great until I got hurt. I had to cash in out to live the four and a half years we went with no income. Now it is zero.

It is not the end of the world. SS and a little VA disability keep us fairly well but being debt free is the biggest help. Things are looking up, wife gets her first SS in May, VA is going to have to up my disability, and the business my son and I have started is bout to start some $$$ my way.

Above average, but still not enough. I was hoping to retire at 50, but might have to work a few years beyond that since my RTI hasn't been what it should have the last 7-8 years.

Interesting. I sit on our Corporation's Investment Board, where we manage the 401k.

The data we were provided by ING last year said that for participants in their 50's, the average balance was $92,820. That's quite a difference to what's graphed above.

35 here and have the average for my age group beat my many multiples. Don't think it's enough though.

I'm about three times average -- and feel naked.

What worries me is not SS being there, I assume it is not going to be. What worries me is Medicare not being there. That scares the crap out of me..... A little heart blip or cancer hiccup, and 200K is down the drain.....

Warren Buffet has been good to me the last 15+ years. After gettig burned by the Tech bust of the '90's I started buying Berkshire-B. I figured if Buffet goes belly up, we will all live in cages and make fire with sticks because the world economy will be a thing of the past.

What's a 401k ? lol retierment ? lets see 200+ momma cows , 1000 acres, all farm and industrial equipment payed for before the age of 50 I think I'll be ok

Yeah, but not exactly liquid assets, that's for sure!

[bleep] im 31 and have over what the 60's are supposed to, and ive got 100K in equity in my house... i gonna be riiiiiiiiiiiiiich. well maybe not, but hopefully i wont starve to death :-(

It can be done. If you start soon enough, it can be done almost painlessly.

Invest $100 a month without fail from the time you are 25, and by 65 you'll be a millionaire. Invest 10% of your income per month, and you can make that multimillionaire. Any decent growth-oriented mutual fund that earns 6% or more will do it.

Much rather have 200 momma cows than green backs any day of the week. Now if you live in the city you wouldn't understand that. Things get rough, cattle to eat, land to grow crops on, wood to heat. Will you be self reliant in your liquid situation. GW

1years calf crop = 200,000K +/- Thats right off the cow and not much feed expence so I can come up with some liquid pretty fast

You make $1,000.00 per calf?

Those are downright horrible numbers.

Momma cows and land, the gift that keeps on giving

That's what I was wondering.

Wth todays prices , yes. Now one needs to remember there is some expence's as tractors, hay equpiment , fuel and such a,d LAND !! but with all this payed for it makes a big difference. Now I have to figure out where to spend $$ that is made so it all don't get payed to the goverment

You could make charitable donation to me


I've been putting some of mine into rentals, it's not sexy money but it's reliable.

We had to start over about 4 years ago. The economic downturn hurt us and we were forced to cash it out. Now we are trying to make up for lost time, chunking 15% in right mow, plus some match.

Rocky nailed it. Folks make the mistake of not starting their investment effort early enough. Start at 25 latest and give up some of the toys to allow it to happen.

Your numbers are much more accurate.

I married a CPA. She cured me of the "instant gratification" thought process a few decades ago.

I would cry if my balance was anywhere near what that says the average balance is for my age. I figure you need a few million to retire right, but, with my luck, hyper-inflation will screw over people like us who actually saved and lived below our means for decades.

I hit 39 in a couple months, and most my age feel that way. I've got lots of younger siblings and some of them and their friends honestly don't know the issues SS has and how it's been robbed, derailed, mis-managed...call it what you want, for decades.

Why is it we frequently talk about our S.S. System going broke but never about welfare, ADF, food stamps, etc. systems going broke?

We put money into S.S. and Unemployment.

Why is the 60's age bracket less than the 50's ? I hope I have a butt load more in 5 years. I plan on retiring at 62.

I wouldn't know a 401K if it bit me in the butt. We do own our home and land, free and clear. We have a campground that pays OK and doesn't take too much work. The government throws money (albeit, not a lot) at me, just for getting old. I've never been wealthy, always been a common working man, so I can be pretty satisfied on not too much. While not handsome, I am handy and can always make a couple bucks if I need it. Life is good. GD

I hear you, there's a lot of "broken", but this discussion is about retirement savings and SS is part of that picture for a lot of folks.

Im 45 but my amount is closer to the 30's bar.........

Mainly because I pulled out 15k and went to Africa

No regrets

Too true. Several friends thought their S.S. monies would be for hunting, fishing, beer and gas. Found out, not so.

According the chart, I'm right at average for my age group, which means at this point I'm screwed That said I'm thinking with the wife rejoining the work force we ought to be able to rat hole away some decent coin in the next couple decades. That and I think the two of us will probably keep on working at least part time as consultants in our later years. That and ideally I'd like to be semi retired before hitting 65.

I keep hearing that. I hope it's true b/c I've been putting a lot more than $100 a month in. I'm 33 and have been putting 10% of my income in my company 401k for 10 years.
My balance is much more than the average in the chart above, but I still worry it won't be enough.

$100 a month for 12 months, $1200.

$1200 x 40 years, $48,000.

It's possible to take $100/month for 40 years and see it turn into $1,000,000?

Kind of senseless to only look at the 401K.

I did not have access to a 401K until I was 42 years old.

NET worth along with cash flow is all that counts. Got to include IRAs, trusts, old school pension type accounts, land, non-retirement accounts, various income streams, etc.

In any case, I'm 56 with two kids in college. I'll be working for a while het.

Sam,
in the old days....(pre-crash) the adage was your invested money should double every 7 years....
So one years worth ($1200 in this case) would have been $2400 in 7 years...
$4800 in 14, $8600 in 21 years...yada yada yada.
So after 42 years if you doubled it every 7, that $1200 would be $68,800.
From 1 years $1200.

P.S. If it doubled every 7 years....

Sam,

At 5% your example will be $153k in 40 years. At 10%, $637k. 12% will get you about $1188K...so it's possible. Getting and average rate of return of roughly 11.5% over the course of 40 years is doing well (about what you'll need to hit a million for your example). You'll hear different numbers, but it seems the last I heard the stock market was doing around a 7-8% return over the long haul.

Wages, I was actually just sitting here doing the ol' 7 years rule, or whatever they call it.


Didn't end up with $1,000,000.....grin


But of course the 7's money is just from an initial investment of $1200 and nothing more?

I'm surprised at the "average" balances, regardless of the age group. I would have thought the balances to be much higher.

NTG, thanks for the clarification.

Think I started a little too late to hit 7 figures!

Correct you are my friend.
That is just from $1200 one time.
Cows are pretty good too........grin.

That is "IF" you average a 10.5% each year you will double in 7 years. Thats a big IF now days,

I'm also kinda surprised at the averages but My wife and I are in pretty good shape.

Totally agree, Sir.

The average is averaging folks that haven't saved a dime with those that have, not to mention those that have been laid off, divorced, or injured and have had to clean out their 401k's just to get by. You use have various public employees that have retirement accts other than 401k's.

Dave Ramsey says $1000 per month in a good growth mutual fund for 20 years equals $1 million.

100 dollars a month won't get you rich. And if you're only saving 100 dollars a month, you shouldn't be rich anyhow, so it all works out.

I have friends that thought my wife and I were nuts for driving crappy cars when we both had good jobs. They thought we were nuts living in a small townhome until just last summer.

We think they're nuts for making the same money we do, and doing it for years, but having nothing to show for it but super expensive vehicles, a big house on a tiny lot where you can touch your neighbors house if you reach out your window, and a bigger mortgage.

You either live below your means and save, at your means and stagnate, or above your means and flounder. No matter how much you make, the three choices are still the same.

Yup, I'm with goalie. FWIW, my newest car is an 2004...well it's my truck. The family vehicle is an '03.

Cows have done okay the last few years but like anything else they are bound to cycle back down.

We're just trying to be conservative and diversified(on a small scale).

Of course it REALLY helps to live where it's cheap. That and staying busy enough to not spend much money dicking off.

Yes !! Same way to get me where I'm at I still in a pretty [bleep] house , run older tractors , but keep them in tip top shape , I do have fairly new equpiment , and will continue to update the newer equpiment as $$ allow and older tractors too

Holton, you should buy a brand new decked out $70k King Ranch F350.......grin

I did buy a truck a couple weeks ago 08 dodge mega cab , but I paid for it

Seats are easier to take care of in a Lariat. I like my King Ranch overall, but the open pore leather takes stains and needs more attention than a slick leather. Of course, it was 6 years old when I bought it, and didn't borrow money to do it, so am happy. And the 6.0 hasn't blown up.....yet.

Wife and I significantly downsized our house this year to save more money and try and buy some ground. Think the only way to buy ground is for somebody to die and be there before the first shovel or dirt hits the coffin.

No problem with any of that Goalie.
I do believe in a nice vacation and/or hunting trip, fishing , strip club ....whatever you enjoy.
Every year.
I know too many friends and relatives that we're gonna save and conserve so they could enjoy......someday.

P.S. They are dead.
Their kids are blowing it though.
It's also easy for me to say, cause a weekends activity for me is a dream vacation for the city dweller. Money ain't everything.

Oh, I agree, there is a fine-line. We have a place in Kona, Hawaii on the Big Island. There is a chance one or both of us will die before we retire and enjoy it (it is rented now).

We take some trips. We just keep those trips within our means, and don't let what others around us are doing influence us.

I would rather go to South Dakota next summer for a week or two than go burn through money at some resort anyhow.

Like I said, there are only three options:

1. Live below your means and save. (and, like the third option, this can be overdone)

2. Live right at your means and sweat it out paycheck to paycheck.

3. Live above your means and pray the house of cards doesn't collapse before you die.

My wife would be like the people you know who didn't spend at all until it was too late. I keep her in check with the reality that we do have to actually live for now too.

And she keeps me from spending it all on toys and forcing us to work more and live paycheck to paycheck.

From the article:
To pump up your nest egg's prospects, you should also consider kicking in enough money to qualify for the maximum company match your employer may offer.

That's not something to "consider", it's a no-brainer. To not do that is just leaving money on the table.

No kidding. It is an instant 100% ROI the second they match and put that money in your account. If your company matches and you don't max out the match, you don't get math.

I have employees that don't.
I've talked til I'm blue in da face.......
Then they wonder why they don't advance above minimum wage......

Word.
Always pay yourself (savings) first......

Much more.

I am not advocating NOT saving, and I do contribute to several retirement accounts of various types, however i think that this is in some ways a trap.

There is FAR too much money in 401, 403, ROTH, etc for Pols to keep their hands off.

Just wait... with the stroke of a pen the terms of such accounts can (and will) change.

If you think you have enough, how would that change if, suddenly in some admin in the mid future, all retirement accoun distributions are taxed at 70%. Add in the number you like. How about a 1 time distribution fee.

It'll happen... there's just TOO much $$ involved that people dont have direct control over.

Middle class savers are [bleep]... tey just dont know exactly how yet.

I am surprised that a rag like Investors Business Daily would word that so casually.

I am well above the average in the article. Through a lot of hard work, a little bit of luck, and an ability to recognize opportunities, I landed a job at an investment company in my mid twenties and managed to work there for almost twenty years before things went to hell in 2008. They had a generous profit sharing / 401K plan.

The other reason I am in good shape financially is that I never got married!

The only barrier I see to an early retirement is health care cost. I'm not ready to sign up for ObamaCare. Another concern is a liberal government stealing my rietirement savings to help the "less fortunate". I have coworkers who have bad credit, or are heavily in debt, or complain that they don't make enough to live on while they smoke two packs a day, eat lunch out everyday, have the latest IPhone, and wear expensive clothes. They have the same opportunities I have but they will be the ones whining about being on a "fixed income" if the live to retirement.

Well, I'm about half my age group's number, but I should be a bit above what they consider average by the time I get to the end of this age group. This is what happens when you don't have a full time permanent, retirement contributing job until you're about 30.

At 40 I more then the average 60 yr old had and sure I would have enough to retire at 55, but I had to start over in a new career from the bottom after IBM went south in the 90's, 10 years later just as I was making a come back market went south just as the wife's employer downsize everybody causing me to dip into my 401k at the worst time.

Now at 61 I am hoping to hang in my current job till 66 then live on employer retirement plan and 401k.

I'll be able to cut back to part time at 58 and retire fully at 62. My wife and I take nice vacations but live well below our means with very few "toys". So many of the young guys at work don't save and stupidly state "I'm going to work until the day I die". They seem to think that their health will be good until the day that they croak. I keep telling them that there's a big difference between working because you want to and working because you have to.

If their only making minimum wage, they can't save, they have to eat and pay bills. Been their and done that. GW

This thread is funny and sad as [bleep] simultaneously

Everyone including myself is saving for retirement with all kinds of incredible plans for enjoying the fruits of our labors during our "Golden Years"

My doctor who is barely 60 and not yet retired has gone down with an incurable blood disorder and will die well before he enjoys his best laid plans.

There are no guarantees

Enjoy your life as you live and treat yourself along the way.

Eat your dessert first and die a pauper!

35 years ago we assumed that SS would not exist when we retired, so we planned accordingly.

I am the Forest Gump of investing. I went all in on Microsoft in 1994. Then I went all in on Google at the IPO in 2004, where I still am.

Gold, Guitars, Guns, etc make 3% compounded.
I have made 20% compounded annually over the last 20 years.

Everyone knows more about investing than I do.
They all say a 63 year old like me should not be in growth stocks.
I guess I am just dumb.

As other have posted in this thread - one needs to strike a balance. I've seen retired folk trying to live on little more than Social Security and it sucks. I know people who have saved for retirement and are enjoying themselves and that looks like the way to go to me. I hear people talk about their standard of living going down when they enter retirement. Not me; I am planning for my income to be the same or (if I am lucky) higher in retirement. I live frugally and have a reputation as a tightwad but the only thing I want for now is more time to enjoy my hobbies. I would like to be able to go on another bicycle tour (like Birdwatcher's epic adventure last summer), but I'm not going to quit my job to do it.

At age 60 hour should not be in growth stocks. They are the most volital and would take the biggest huge drop in a correction.

You've already take the risk over the years and done well. It's too late to remake it if you loose it. Time to get a tad conservative at age 60.

I disagree somewhat as it depends on the investor. The 'fire is always good for generalizing... I have not invested in stocks outside of what my company provides as part of my annual final compensation, base, bonus and stock. That said, at 53 and retiring within months I do and have for years invest in fairly high risk funds but check them daily (30 minutes) and do a full re-evaluation quarterly. I have my accounts set up such that I can be out of them and "under the mattress" in two days which I have done four times in 28 years at it. Lots of scenarios but the key is the majority do not even explore them. I am a dumbazz engineer that could not spell Wall Street 28 years ago when I started investing fresh of of college. Hell most here won't trust their spouse with money let alone a financial adviser.

My goal is to be, easily, the largest in my quartet.








and have a Honda step-through drag bike.
But that's just me.

,,

Sir, this is rural Idaho.
On ten bucks an hour I sent two girls to private school.......
It was a life choice.
These employees could invest if they wanted too........
They just choose smoking, tattoos and texting on smart phones instead.

That's amazing you did all that on your own at only 10.00 per hour.

Great job.

And that, folks, says it all.

OrangeOkie, When I was in my early 40's, I had that "pretty much" doubled. But, with some shrewd market strategy, I lost most of it. So, I started over! In 1041 days, I get to see if I can make it without a job!!! memtb

If they are suggesting you should be in growth at over 60 years old, they know less than my 6-year old son.

Just say'n.

If you plan to burn it all up by the time your 80, then you've still got close to a 20-year time horizon.

If you lost it all in a market crash, could you still work well enough to take care of your needs? If so, growth isn't all that crazy. A balanced portfolio would make for more stability though.

No worries, Obama is working on that little retirement thingee as we speak.

Be aware that if you have other income, you will have to pay income tax on part or all of your Social Security money. Right now, I am paying close to 25% of what I draw, back to them in April. They do not hold it out, so you have to come up with cash. Most people do not know that you will be penalized for taking care of yourself, and I did not either until the first April of retirement. miles

I'm well above any of those amounts buy I stopped investing in the stock market last year at 40. I don't like all my eggs in one basket. I've invested heavily in other retirement plans over the last 20 years, and continue to. I now am receiving about $30,000/year from those investments that are paid off.
I fear the stock market crashing and a lot of people will be in trouble. It doesn't hurt to also invest in land/rentals/business or something liquid.

Correct, if you start drawing SS before your full retirement age, you will be penalized for every dollar you earn over $15,720, in 2015.

I.E. for every $2 you earn above that amount, you will be penalized $1 in SS.

It's probably better to keep working past age 62, if you can, instead of trying to draw SS early and then continue to work.

There is a whole lot more to the retirement picture and financial health than what you've got in a 401k.

If some of you missed this one I copied it off Yahoo.
Fits in good here.



Robert Shiller, the Nobel Prize-winning economist, offered some simple advice for people trying to get ahead when he visited Yahoo Finance recently: Live like a student.

“My students are living alright,” Shiller said. “I’ve suggested to them, why don’t you just continue to live at that level after you get a job? It would pile up into a lot of money.”

Struggling workers might take offense at a comfortable, accomplished Yale professor suggesting middle-class Americans should subsist on ramen noodles and hand-me-down furniture.

But Shiller, like other economists, is addressing a stark reality: Many Americans live beyond their means, with 20% of adults spending more than they earn, according to the Federal Reserve. Less that half of all adult Americans have enough money saved to cover a $400 financial emergency. Millions more are far short of the funds they’ll need to retire comfortably.

Shiller’s basic point is that the longer working folks can hold onto the frugal habits they're forced to adopt when money is tight, the better off they’ll be when they have to come up with money for their kids’ college, cover the cost of a medical emergency or ride out an unexpected bout of unemployment -- and then, if there’s anything left, fund retirement.

The concept is easy to understand — and damn hard to execute. I tried it out on myself — theoretically -- and discovered that if I were to live like a student, here’s what I’d have to change:

Stop fixing up my house. Owning the home isn’t really the problem, since it’s a pretty good deal for me, compared with renting. But the amount I spend on upgrades, maintenance, landscaping and basic repairs takes hundreds of dollars out of my wallet every month (and sometimes, every week).

Estimated savings from caring less about my house: $300 per month.

Make do with my old car. It runs well and has most basic features -- and it’s paid for. But I want heated seats! I’ve already identified a couple new models I’d love to check out, but I guess I can live with my eight-year-old Mazda for a few more years.

Savings if I don't take on new monthly car payments: $300 to $400 per month.

Tolerate dumb TV. I just bought my first smart TV. Not because my old TV broke, but because who wants a dumb TV when you can have a smart one connected directly to the Internet? Of course, now that I think about it, I got by with a puny TV — artfully outfitted with rabbit ears — back when I was first starting out. And I have to admit, I’ve also upgraded my smartphone, tablet and several other gizmos simply because a newer model seemed better.

Money wasted on unnecessary upgrades: $100 per month.

Downsize to one entertainment choice. I have cable, Netflix, Amazon Prime and a few other subscription services, and I’m probably not maximizing the value of any of them.

Money wasted just to make sure I’m never bored: $50 per month.

Get my hands dirtier. Last month I bought a snowblower, even though I’m capable of shoveling by hand. Before that, it was an electric garage-door opener, even though my arms are capable of raising and lowering the door. And as any DIY-er knows, tackling projects yourself always requires some new power tool or labor-saving device. Machines that handle once-tedious household chores are a modern marvel, but I guess it's still okay to break a sweat every now and then.

Money spent on appliances so I can do less work: $50 per month.

Ban amusements and little life enhancers. This might be TMI, but for Halloween last fall I bought a rubber chicken mask I wore while greeting trick-or-treeters, which I found amusing even if it alarmed a few little kids. I’ve also purchased sports equipment, pet gear and assorted knick-knacks I could probably forego without compromising my living standards.

Money wasted on small impulse buys: $50 per month.

I could go on, but scrutinizing just a few lines of my monthly budget shows how spending, rather than saving, dominates my financial life. That, for better or worse, has become the American way. The national savings rate is about 5%, and anybody able to bank double that is a highly disciplined outlier. Still, there's nothing wrong with saving 30% or 50% of your income, especially in an uncertain economy.

Marketers, needless to say, are terrific at helping us justify all that spending: It will make us feel better! We need to keep up with technology! There’s nothing wrong with a little splurging! You deserve it! What they never remind us of is the future cost of spending our money today, and going without it tomorrow.

If I were able to fend off lifestyle creep and feel happy with less — to return, in modest ways, to the more frugal habits of earlier days — it would make a big difference. If I could save an additional $500 a month, it would add up to $200,000 after 20 years, assuming a reasonable 5% annualized return. That nugget might end up bigger or smaller depending on when you start and how much you sock away, but any amount of untouched principal will expand itself thanks to compounding over time.

Is it worth it? On paper, it sure seems to be. But back in the real world, the urge to spend can be remarkably powerful. Besides, what’s wrong with spending a bit of my hard-earned pay on heated seats? I deserve to be comfortable, don’t I?

By the chart I am in the game
But I always remember
"Life is what happens while you are busy planning it"

Hank

Don't complain, it's no ones fault but your own, Miles. You jumped before you looked.

The things I see some of my employees do with money on a day to day basis just makes me shake my head. There are twelve of them ranging in age from 26-57. Out of the twelve only one contributes the maximum amount to our 401k and only six of twelve take advantage of our 8% match. They are all paid 2 1/2 - 4 times the current minimum wage.

My best foreman (34 years old) makes over 3x minimum wage, is single, has no kids, drives a company truck and is still flat ass broke come every pay day. I mean "Mike can I borrow money for lunch?" broke.

Last Monday morning he came in and showed me a winning casino ticket for $1000.00. He told me his girlfriend got some government grant money for her education so she loaned him some and they went to the casino. I asked him what he was going to do with the winnings and he said there was only $200.00 left after he paid her back the $300.00 he borrowed and then had a nice $500.00 dinner at 101 Chophouse. Unfortunately, I could go on and on.

Mike

The question then arises, what responsibility is it of the government to bail out the sick, lame and lazy dolts of life. Just look at all those pimps and thugs in Ferguson. Do you think they have any regard for self reliance? Why should the tax payers provide a government check for loser like that. The apostle Paul wrote that "if a man won't work neither should he eat." That is God's law of self responsibility. I doubt the genie can ever be put back in the bottle, but nobody should be afraid to publicly and forcefully speak the truth about the sad state of affairs with the American people who are lying sideways in the public trough. They should be shamed and made to feel ashamed.

Interesting that I just saw this thread, as it's something we've been discussing the last few weeks in my family. My in laws retired about a year apart starting to years ago. My father in law is a very frugal man, he's lived well below his means for many years and put lots of money away both in savings and investments and one would likely not know his actual worth by initial appearance if you bumped into him at a gas station. The sad part is that within the first year of retirement both him and my mother in law have had non stop medical issue, some quite scary as they both battle the Big C. It just sucks to me for them to have worked so hard for so many years and save so much in anticipation of living a dream retirement and to watch their health deteriorate so rapidly. Life sure as hell ain't fair sometimes that's for sure. All the money in the world in the bank doesn't mean you'll get to enjoy life! Just something to think about.

I'll never forget "Jerry the Car Pro" telling people that the biggest mistake most make is not treating a vehicle like a refrigerator or lawn mower. You don't replace them until they don't work any more.

Most people are really stupid when it comes to finances. Around the Superbowl there was a young man who paid the big bucks for a ticket. He said something like, "I already have a car, so I figure why not, you only live once." Idiot! Watch it on TV and put that $ in a retirement account. The way to save for retirement is real easy; live below your means and put as much money away as you can. Only make purchases that you need and keep your "wants" in check. My wife and I bought a small modest home, we furnished it with hand-me down or very inexpensive furniture. We bought economy cars and then kept them for about 10 years. When our son no longer needed daycare, we took that money and put it into our retirement account. When we got raises, we put most of that into our retirement accounts. I'm 58 and have been retired 4 years this May. We are carrying no debt and are quite comfortable and can now easily afford all those nice things we've always wanted and do some traveling. We have no debt.

Delayed gratification and saving, saving, saving. What a concept! All you young folk, you can do it too. Those of you who had to have the big McMansions, fancy new cars, maxed out credit cards etc and have lived above your means are screwed. If we were to suddenly get a serious health issue, I would not regret a thing and would go to my grave knowing that I made things easier for my son who we have taught to be frugal as well.

Great advice coop. I wish I had followed it when I was up and coming.

Well I guess my situation is a blessing, I'm above all age groups. I get a company pension as well and I work as much overtime as I can which keeps adding to both accounts.

With my luck I'll drop dead just as I retire, but at least my wife and her new boyfriend will have it easy....grin


I ain't a Hater!

First off, an 8% match, wow, you treat 'em good. 8% is un-heard of these days. Here I thought I had it good with a 6% match, and yes I have a co-worker who doesn't contribute enough to take advantage of it.
And it sounds like to me like you've got someone with a gambling problem on your hands. Good luck with that.

I am 56 and well above the average. Started my 401K in 1977 putting in a then max 10%. I have increased my percentage every time the regulations changed to allow it and up to 26% now including the company match.

The 1st thing I always talk to our new hires about is our 401K plan and how they need to participate. Most are not interested or say they will check on it later.

TRnCO you're right, buy the way my post reads you would think that, but I really don't think that's the case at all. I was trying to convey what bad decisions he makes when it comes to money and women. He lives in a modest apartment just blocks from our shop and has lawn chairs for furniture, but he has a 60" flat screen and every electronic device known to man. I mean the newest play stations, x boxes cell phones, whatever. The guy pisses away money like noone I've ever seen!

He eats out all three meals every day of the week even though he tells me he knows how to cook. He'll buy guns, crossbows, whatever he can get his hands on when he has money in his pocket, then three days before pay day will survive on Raman Noodles. Damndest thing I've ever seen.

Mike

One question , Wage, what time frame was this like year 2000 or ???

late 80's into 90's.

Old vehicles, small house, no vacations of any distance, home cooked meals, no cable, no cell phones then and work OT as much as you can.

Obama's Retirement Proposals "Punish" Investors says ICI

BY APARNA NARAYANAN
INVESTOR'S BUSINESS DAILY
02/05/2015 08:02 AM ET


Millions of Americans depend on the money stashed away in IRAs and 401(k)s to retire securely.

But President Barack Obama's 2016 budget would punish the nation's hard-working savers and investors, a trade association for the mutual fund industry argues.

The retirement planning proposals contained in the Fiscal Year 2016 Budget would limit the amount that Americans can save for retirement, according to the Investment Company Institute (ICI).

"Policy changes of this kind are simply wrong-headed," ICI President and CEO Paul Schott Stevens said in a press statement.

Among its more contentious proposals, the budget calls for a $3.4 million cap on the total amount of savings inside a 401(k), defined benefit plan or IRA. That amount is roughly equal to $210,000 of income for life starting at age 65, according to Forbes. As such, the initiative would particularly affect wealthier individuals and their hoped-for quality of life in retirement.

The ICI criticized the proposal requiring employers with existing retirement plans to expand eligibility to part-time employees who have worked at least 500 hours for at least three years. The requirement could mean additional costs and coverage issues for businesses.

The measure "would discourage employers from offering retirement plans and add unnecessary complexity to retirement savings," Stevens wrote on Feb. 2.

Supporters of Obama's retirement proposals argue that they would make it easy and automatic for workers to save for retirement through their employer. They point out that the proposals would give 30 million more workers access to a workplace savings plan, as well as tax incentives to offset administrative expenses for small businesses that adopt retirement plans.

But Stevens pointed out, "A voluntary retirement system has allowed Americans to accumulate more than $24 trillion in retirement savings."

He added that the ICI strongly opposes mandates on employers, "including any in the administration's 'auto-IRA' proposal." He was referring to the budget proposal that would set aside nearly $6.5 million for state-based automatic enrollment IRAs or 401(k)-type programs.



Read More At Investor's Business Daily: http://news.investors.com/investing...caps-employer-mandates.htm#ixzz3SiD2zDDQ
Follow us: @IBDinvestors on Twitter | InvestorsBusinessDaily on Facebook

Nt trying to dish you doings in any way , but ain't that when the min. wage was like $5 hour ? so you made 2x the min. wage ? even at 2x min. now not easy if the spouse dosen't work too. What is minum now $ like $9 hr ??

No problem, Brosef.


$7.25 in Idaho.

Our lowest paid floor sweeper is $10.

Just trying to get an idea on then to now proportions , maybe it could show some younger folks what can be done if you don't buy that mega house , new truck ever couple years , party every weekend , ect...

I have been investing/saving for about 30 of my 52 years. And am doing what i think is "on course" for my goal to have my target amount in my account when I retire.

But, another side of my investment portfolio has always been liquid assets such as guns, property, antiques. It's amazing what you can amass in 30 yrs of buying/selling/trading.

Upon my retirement time, I will be liquidating most of my possessions that many folks have scoffed at me for saving and collecting. I am confident it will account for about 20% of my retirement, pending markets at the time.

My .02, make that .01.. I need all the $$ I can get for retirement!

dave

It's pretty much the same everywhere I've been. I work with folks who spend 1/6th of their daily wage on coffee and lunch every single work day. They get a raise, and go out and buy a new car on credit, and end up broker than they were before.

I think the key to retiring is spending money on things that don't depreciate much.

Up until about 6 years ago I was being pretty much an idiot with my paycheck. Did at least pay in max to a small 401k account but very bad at saving anything, actually racked up a little credit card bill.

Wasted years worth of pay on rent, gambling, partying, eating, no kids, no worries...

Bought a few guns and they are the one thing that is still worth money.


Finally dawned on me that you gotta be smarter than that long-term.

I think a person has to strike a comfortable balance between retirement planning and living. According to the chart, I am above average but at the same time I look at what happened with my father. My dad started working at 18 and worked until he was 60. We grew up living quite conservatively, no new vehicles and a house that was paid for within 10 years after being purchased. We didn't spend money on many vacations but spent time at a cabin in northern Michigan. Within a year after my father retired, we found out he had terminal cancer and passed away 6 months later never able to draw social security. My mom is living a comfortable life but at the same time I wish my father had had a chance to experience some of the hunts that I have been on. The time that I brought a 10 point buck for him to see brought a shine to his eyes since he had not let himself do that.

According to that article, I'm above average and will stay above average to retirement. That is only 401K, and that should not be your only basket. If the market crashes and you lose half, what are you going to do? I also have two pensions that hopefully will be there when I retire, plus I plan to go into retirement with few bills.

I spend 10% or more of my income yearly on hunting and other hobbies. I'm not working now just to retire some day. What's the point if I'm not enjoying life along the way?

Sam,
One word.





Lotto.



We catch up in one day......
and we are smoking Marlboros and swingin' in a hammock.
Nice.

This reminds me when a VA loan rep came to our barracks
to get people to sign up for a VA home loan.
Myself and 2 other Marines signed up out of 150 in our unit !!!

My company matches 5% in the 401K and ALOT refuse to participate.

I am below average but like I told my wife, no plane, no boat no Harleys. My toys go bang and they don't cost a lot to feed.
Modest home, simple tastes/hobbies work for me.

Another thing to do is to figure out what your income will be in retirement and then live on that for the several years before you retire. If you don't, it'll be hard to cut back and you'll go through your savings faster than you plan.

Dude, that's exactly what I've been doing.


Dumping all my extra money into Powerball and Megamillions!

But Stevens pointed out, "A voluntary retirement system has allowed Americans to accumulate more than $24 trillion in retirement savings."

He added that the ICI strongly opposes mandates on employers, "including any in the administration's 'auto-IRA' proposal." He was referring to the budget proposal that would set aside nearly $6.5 million for state-based automatic enrollment IRAs or 401(k)-type programs.

Thats what the Brown Clown and his cohorts want end of story. They might do a Cypress on us one of these days.


I know a female manager who I work with , she is 49 years old and concerned about her retirement. She went to her advisor Edward Jones I believe and asked how much she needed for retirement. Guy comes back with 2.4 million, she went into shock. I bet she has close to 1 Mil or more already saved but it still shocked her.

I too believe you have to live a bit or more before retirement. My dad was a head of average when he passed at 58. Still had lots on his want to do list. Likewise, some of the stuff I want to do in life isn't all that possible or fun when I'm retirement age.

There are a number of retirement modeling tools available and I believe everyone should go run a few scenarios. Shock? Yup.

A little above average here. I really don't think I will ever be able to afford to retire fully.

Wife and I are both retired and have fixed pensions with very good benefits. We also waited on SS because we were both still working at age 62
Those 2 pensions and 2 SS give us a very comfortable income.
Having the house, cars, and camper all paid for helps to.
Our 401K is over twice what is shown and we have no need to tap into it, it's there for our kids.
All this happened through a investment plan we started when we were both in our 20's. Even with the crash it's worked out OK
I can't recommend strong enough how important an investment plan is when you're young, thinking you'll start it when your older only makes catching up more difficult.
There is a certain amount of luck that makes for a good investment portfolio at retirement, health, job security and a strong marriage are just some.

The coming retirement crisis will be extremely painful for most. The decline in the defined benefit pension - from companies more profitable than ever - is just one of many lost battles in the war on the middle class started by Reagan and continued by his progeny such as Scott Walker.

I'm fortunate; in my mid 40's, I have paid cash for my house, have a real pension, and live below my means with zero debt, other than some student loan. I want a Blaser and an Anschutz, I'll settle for my SHR 970 and CZ 452.

Always amazing that those who support the Right the strongest have been the most victimized by it.

With 13 trillion$ presently (last I heard) tucked away in IRA's, 401k's, etc., the Gov't is looking hard at how to tap that resource as previously alluded to by Pelosi, Schumer and Reid. Hillary, as I recall, also had some sage comments, too.

In talking to 2 financial advisors and to my CPA we discussed how they Gov't would "access" these acct's for their present and ongoing use. A lot of bad schittt came from those discussions but the, so called, favored means might be something along the lines of having to buy Gov't debt (bonds) or be taxed exponentially on those funds redeemed as they are drawn down. Another scenario might would involve some "tuning" to the Roth IRA protections by, say, splitting the differences on taxes paid then to what taxes would be without Roth protections and invoking that difference on a sliding scale. Another would be to simply raise the RMD factor of life expectancy #'s.

That's, in the main, what shook out of those discussions and would be interested to see what some of your takes would be on it.

Avoid paper dollars, when the crunch happens, likely worth ten cents on the dollar. Invest in income producing land or something similar. My mother always stated that she lost her money when the bank busted in the early thirties. I asked her how much and she stated everything $28.13. Broke her of trusting others with her money and made a cautious saver of her. Best I remember they survived that winter by feeding themselves and their livestock by planting a few acres of turnips. Gw

Wouldn't seem to work too well for city folk. jus sayin.

I have a "real" pension (for now) and a 401 that is NOT matched (since I get the pension).

While I love the idea of a defined benefit pension plan, and the selfish part of me wants it to stay, I realize that it is not sustainable financially unless the employer requires me to work several more years than currently required before drawing said pension.

It isn't a war against the middle class to realize that paying a firefighter 150k a year for the rest of their life after they work 25 years is not sustainable forever, even in the public sector where they print their own money to pay that pension.

goalie, since 1998, and upon severance from a company, you can roll your accrued pension into your 401k. If that matters.

It's not been performing as well as I'd like recently, but based on the OP's link I'm well ahead. I don't max out my 401 but but between my contributions and my employer's I'm putting away ~20% of my salary every year.

Yes, I know.

I have a feeling it will be dissolved and paid out well before I retire.

"Income producing land or something similar." Take advantage of the opportunities in your area or move to the country. You can live in the city and own income producing land and rentals. GW

Why not just buy an assortment of REIT's and laze in the city?

It doesn't even have to be income producing. If you can get it rented for enough to pay the mortgage and all the costs of upkeep, eventually you own it free and clear.

If that whats works for the individual, great. For myself I can't see a large city as being a place that I could be comfortable in during hard times. GW

PS. Email for my address, should you have a hankering for turnips. GW

We setup a LLC owned by one of our 401k to buy rental property. The nice thing is your profits are tax free if you want to ever sell. That gives us a little diversification in retirement savings rather than have everything pinned on wallstreet. When I leave my current job I'll move my 401k into the same thing. It's more work than investing, but the return is more consistent.

You're one of the good guys OT303.

I live in the country, too and have property rented out but it doesn't take care of itself. Like livestock and kids, you better stay on top of it.

Sad part of what you've said is so few Americans really have a choice in the matter.

Yours is a plan!

I do not buy this at all. I work for the #2 oil company in the world and will soon be retiring with a defined benefit pension after 30 years of employ. About 15 years ago the company started to offer the "portable" retirement plan as an option. For one, we could not attract experienced hires because they would receive little from the defined benefit plan and often only begin to collect it at age 65, later than many planned to work. The choice was yours though. Over the years more and more new hires were selecting the portable option as most do not believe or even want to work for the same company for their entire career. Finally in 2013, because 90% of the people were choosing the portable option, the defined benefit option was dropped. I forget the exact numbers but these days folks are expected to change companies 5+ times in their career.

I've read here where many people tell a tale of woe of someone they know who did everything right and unfortunately, died right after retiring. While sad, this is not the norm and no reason not to plan for retirement. Others say that they want to do "stuff" that they won't be able to in retirement. Two answers for that- 1.Plan well and you can retire early enough to do those things, and- 2. Take care of yourself now and you'd be surprised at what you're still capable of as you get older.
There's nothing worse than having to work and not being physically able to.
PS-the dollar is never going to plunge in value. If it did, you'd have a lot worse problems than retirement.

I'm still scratching my head at those numbers. They seem very low to me. I'm in my mid 30's and have been contributing max to my 401K since I was allowed. My company has matched in my 401K almost what's presented in the age 60's column, and I get a pension. I'm not counting on the SS or pension for retirement and still feel behind in my 401K. I guess my kids will have a large time when I'm dead and gone.

I'm not too worried about it. The politicians already have the wheels turning to seize retirement assets of you guys who have more money than the government thinks you need in retirement. I'm just planning on living the good life until I retire and then having the government take care of me with the redistributed funds from your accounts

Doing stuff and saving for retirement are not mutually exclusive.

For us, just not raising our standard of living every time we got a raise resulted in allowing us to save and do stuff. It also allows me and my wife to bothe work part-time in our 40's and maintain my standard of living, while allowing me to work more if I want some tools or toys. Time with my son > any physical possessions.

Not having car payments also really helped. Like someone here said: you should treat a vehicle like a refrigerator. Use it until it doesn't work anymore.

Pretty much. And, it's the stupid things folks spend money on now that they could easily give up, and still live a good life before retirement. You can have it all.

They are way too low but they are the reality.

I just found this thread and your comments are both helpful and amusing! I may be retiring soon due to some health issues, actually about 2 1/2 years sooner than I planned. My financial guy is telling me to quit worrying, my Wife is telling me to quit worrying, but I can't help worrying, at least a little. Its a big change for anyone and I really wanted to work a little longer. I have a decent pension, a decent 401 and very little debt. Wish me Luck!

The numbers in this chart would worry me if that was all that I managed to save. I don't know how much you will really need, but I do know that more is better. I'm glad that I started early and managed to live under my means. You never know what life is going to throw at you. I've heard most of the numbers. Some experts say your savings should be 5 times you pre-retirement salary, and I've heard 8 times.

The company I work for stopped contributing to 401k's as of Jan 1. Previously they would match 25% of your contribution, up to 15% of your pay.

I am still able to put money in it this year(without match) but they are doing away with the 401k at the end of the year.

We are moving to an ESOP program. Not sure how I feel about it.

One chitty part is it took 5 years before you were fully vested in the 401k, now you start over and it will be another 5 before I am fully vested in the ESOP.

Could be great, could be awful. Remember Enron. No matter how much you love your company and think they are great diversify at the first opportunity.

The company I have worked for the last 15 years matches the 403B at pretty much 100% your contributions and gives us all the Fidelity funds to pick from. The offset is I make less money that other for-profit in the industry but it's by no means a paupers existence. When I started here my wife and I hoped to have children and bought the house based on my salary at the time. Children didn't happen, she went back to work and I have done well and the result is retirement is 8-ish years away at 59 and unless the country melts down we'll be comfortable.

I didn't really start saving and investing until I was 30 and I have made sure to take advantage of everything I can, IRA (both regular and Roth and now regular again) and my first companies 401K and now the 403B. Even though it grew to be no fun at the end, I stayed in the Navy Reserve until retirement so that's another income stream. Wife takes advantage of the IRA, the gov't TSP and will have a retirement as well. We won't have a mortgage in retirement so that's another cost gone.

Yes, things could melt down but all I can do is plan and prepare the best we can.

Self employed for 10 yrs now. I only have what money I put in a Roth with my wife and that is only about 11k per yr. I don't have that much, not even close to the avr. I do have a 3 bed brick ranch on 4ac. worth 300k though and it is payed for for 5 yrs. Then daughter goes to college, I borrow her 30k. She is out but now my son is ready for college. Money in one place isn't so good. Eveyone sais DIVERSIFY!!! but then all thei money goes in diverse and different stocks. Not so good cause it really isn't diversified if it is all in stocks. I have 3 different pieces of land. Where I live and 2 small 7& 8 ac parcels with river frontage. I have money on the bank too. How else do people diversify??? I refuse to own gold. It has no dividends and scripture says " they will throw their gold and silver in the streets" I think it is a bible verse.

Huh?

Don't have much 457 money left, under $20k. Spent it all on home improvements and a new truck when I retired 10 years ago. Not to worry, I worked 32 years in a job that was covered by one of the healthiest public employee pension systems in the country. Between my pension and S.S. I receive more than when I was working. Same for wifey, she worked for a private corporation and receives a pension check monthly, the insurance company had a matching 401k account, so she has a separate nest egg there, a county pension after 15 years, and S.S.. It required a lot of discipline and hard work to survive all the injuries and illnesses from working, and fortunately the medics found the tumor that was paralyzing me from the neck down. Now I am fine, but still grumpy. My father died when I was 10, leaving my mother hard pressed with twenty-two cents in her purse, she went to work and died at age 67 without respite. I decided that wouldn't happen again.

The time of the pensioner is about past.

Outside of government or union jobs, very few companies still have a defined benefit retirement plan.

Oh, that's utter rubbish. People can't save for themselves without .GOV holding their hand?

I've never had a pension of any kind, been self employed for 20 years, divorced, and still have over three times the average in IRA's. That's not counting the value of my business, etc.

There's lots of people that have the opportunity to save through self directed retirement arrangements like 401K's or Simple IRA's, and choose not to. I've had to physically wrangle some of my employees into signing up and contributing the minimum of our Simple IRA plan.

Usually, people are their own worst enemy, and very few can pass up the opportunity to throw their money at some ridiculous car payment rather than their own future.

What's rubbish? That defined benefit plans are being replaced by defined contribution plans?

Did you read the post?

I have a different view on retirement than most. I love saving money, but I'm not really saving it for myself. I also like being as efficient as possible. Efficiency for me is lowering my "cost to live" as much as possible, by prioritizing money to areas where it will bring me the most joy. I'm willing to give up going out to eat, having a new wardrobe on a regular basis, having newer vehicles, having cable tv, having a smart phone, etc if it means that I can have a good boat, a good house, and live in an area where I can hunt/fish to my hearts content and still save towards retirement and pay down the house to nothing.

My plan is to have my "cost to live" at around 25k a year by the time I'm 40, AND have everything I need/desire to hunt/fish in Alaska. I plan on living that lifestyle through "retirement" and hope to hand down a huge nest egg to my daughters when we pass. I have a few good friends who have done this. They look poor, act poor when it comes to spending money, drive beat up old rigs, but they live in 400k houses that are paid off and never have to fret one bit about money.

The premise of the post:

"The time of the pensioner is past".

Did you read the post?

Pensioners = those who worked for a company that provided a defined benefit retirement plan, aka a pension.

Very few companies still offer pensions. Very few. Nearly all have moved to defined contribution plans, aka a 401k, 403, IRA, or something very similar.

The time of pensions is past. My father, both grandfathers, and nearly everyone of that generation retired with a pension. I will retire with a 401k, IRA, and other investments.

You are correct and the few companies that still have huge workforces with pensions are doing everything they can to buy them out. We just offered 100k employees an an early out plan in exchange for what was promised 20 and 30 years ago. And even those who retired with a pension have been moved to an alternative health plan.

Pensions as we knew them are almost completely a thing of the past.

Yep, the CEO's got rid of pensions for everyone but themselves and their cronies. They've also convinced peons that they don't need unions because the company will be benevolent.
PS- A million dollars will give you about $40K a year to live on.

I do not buy this at all. I work for the #2 oil company in the world and will soon be retiring with a defined benefit pension after 30 years of employ. About 15 years ago the company started to offer the "portable" retirement plan as an option. For one, we could not attract experienced hires because they would receive little from the defined benefit plan and often only begin to collect it at age 65, later than many planned to work. The choice was yours though. Over the years more and more new hires were selecting the portable option as most do not believe or even want to work for the same company for their entire career. Finally in 2013, because 90% of the people were choosing the portable option, the defined benefit option was dropped. I forget the exact numbers but these days folks are expected to change companies 5+ times in their career.