This thread has evolved into the "chest beater" style that I occasionally complain about here. Most, if not all of the participants are showcasing how well they navigated life because they are responsible and well grounded (not a bad thing, per se).
I envied the two generations before me because it seemed that they matured with "golden parachutes" regarding retirement. Now, compared to my adult children's (40's) circumstances, I really seem to do have a golden parachute (workplace 403B 2x contribution, "free"* workplace health insurance til death post retirement, etc.).....my chest beating, lol.
Proper chest beating not necessarily bad in our cases. But, I would like to hear from the 30 to 40 year olds about the different challenges they face that makes retirement planning a much different and greater challenge than my and previous generations.
* relatively free, not current 97% free.
Is it chest beating, or is a, "This is what worked for me, perhaps consider this approach" deal where people are passing on the path that works or the caution to get on this soon?
I mention it as the latter because the biggest resource people have when planning for retirement is time. The compounded returns are the biggest lever moving the pile of money.
A quick example. Someone who for 20 years from the age of 25 until they turn 45 starts with a $300/month investment in an S&P index fund and increases the amount by 3% each year for that 20 year period. (Invest $309/month the 2nd year, $318.xx/month the 3rd year and so on) and then doesn't invest anything more after 20 years will have more than the person who starts at 45 at the next 3% bump and invests until they are 65. (IIRC the first person annual contributions start at $3600 and end at $6300 at age 44. The second person starts at about $6500/year and ends at $11,400/year at age 64.)
The first person, if they leave that money alone will have just under $1.5 million using historic returns of the S&P500. Their investment was just over $93k
The second person, who waits 20 years before starting invests just under $175k and will have about 1/3rd as much at just under $450k
Almost double the investment for about 1/3rd of the result.
So, is it chest thumping, or advising someone to leverage their biggest resource, time and get their money into the game as soon as they can so those earnings can compound over and over and over again?
In my case, it's the latter.
Plan early, save early and reap the benefits.
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