LadyButterfly she/herBetter than I expected tbf
BakerBagelBack when i had jobs that had 401k plans, all the calculators said i needed over $1 million to retire at age 70. Meanwhile i was living paycheck to paycheck trying to put something in there. How tf am i supposed to squirrel away 7 figures when i have mever made $40,000 in a year?
UnderpantsWeevilHow tf am i supposed to squirrel away 7 figures when i have mever made $40,000 in a year?
Compound investment is supposed to do a lot of the heavy lifting. At a 7% rate of return, your money doubles every 10 years. So, assuming you set aside $6k of that $40k/year ($500/mo), starting at age 22, you’d have $1M at age 60 and $2.2M at age 70
www.bankrate.com/…/save-a-million-calculator/
But here’s the trick… You’re looking down the barrel of 40 years of inflation. So, if you’re earning $40k in year one (let’s say, the year 2000) and you’ve been on the job for 25 years without getting a raise, inflation has reduced the real value of that income by roughly one half.
On the flip side, let’s assume you’re keeping up with inflation (and that $500 you’re setting aside is increasing at the same rate). Then the math gets more complicated and I can’t help you anymore. But the point is you get to $1M sooner, simply because $1M in 2060 is worth a lot less than $1M in 2000.
Had a broker explain that - at my current rate of savings - I’d be looking at a $4M retirement account by age 62. But then he dumped some ice water over my head when he noted “That’s only going to be worth around $1.1M in modern dollars by then”. Suggested I actually up my savings, because $1M only really feels like a lot until you try to live on it for the rest of your life.
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RememberTheApollo_That’s why we need to have a conversation about taxing millionaires when everyone yells “tax the rich!”
A million may be more than what a lot of people have, but it’s probably not even a number people can even retire with considering taxes and inflation. Two to 3 million might be a start, 4 million would be ok today, but when people retire in 10, 20, 30+ years from now? Who knows what that will be worth.
People might say they could live on less, but doing things is expensive.
Doing things is expensive because people with million dollar a year incomes make it expensive. That’s where the million/year comes from.
Where did I say anyone is making a million a year? What does a million a year have to do with a lifetime of saving, ROI, and compound interest for a normal person? If you’re making a mil a year retirement shouldn’t be a problem. Or are you just saying people should take up knitting in your version of retirement and constantly worry about money or a surprise expenditure?
Or are you just saying people should take up knitting
Man, don’t even get me started on the fast fashion industry. We’re killing the planet so that we can turn raw cotton into landfill waste on the backs of East Asian slave labor.
If we could end that by telling Jeff Bezos and Chip Wilson to take up knitting? Yes, absolutely.
Save the planet. Shut down Temu and lock Colin Huang in an oubliete until he darns everyone else a decent sweater.
I have no idea how you got any of that from what I said.
I have no idea why you jumped to it from millionaires needing to be taxed more.
But if you think knitting as a profession is some kind of joke, why would you defend people from taxation when they were profiteering off the textile work of others?