Thanks for the explanation. It makes sense to me now.
I have never worked for a company that matches 15% of your income. Usually, it seems only up to 5% or 6%.
In one case, if I remember it correctly, the company matched 3% dollar for dollar, and then if you contributed another 3%, the company matched 1.5%. So you got 4.5% at most from the company. Supposed that your annual income is $100,000. After 50 yo, many may have the total contribution $24,000 + $4,500.
My company matches 100% up to 6% and they also give an additional 100% of up to 3% in profit sharing of our salary + bonuses so 9% (6%+3%) is the employerâs contribution. The profit sharing is a 100% gift. You get that even if you donât sign up for the 401k contribution plan. So in short the $53k is just a maximum cap that you and your company can contribute to your 401k. Thatâs just my take on it.
Sâs company only matches a bit, but he does the max as a 401k Roth. He also has a business, so he contributes the max toward that to in a different solo 401k, and weâve also got him to open an ira and make a backdoor Roth IRA. He has impressive retirement savings for someone who is only 28 and had been supporting himself for 5 years, as well as a large separate emergency fund.
We are confident he will continue to live below his means and be financially comfortable, whatever the future brings. He has always been resourceful and good with his finances.
âFor the age group 55-59, the median of what they think is âenoughâ for retirement is $500,000â - this is what others think. But we do not always agree with others. $500k is not enough IMO. There are few facts that may be missing here and one of them the constant printing of money that makes them devalued. And $500k will be largely gone after, say, retiree decide to buy a second home, which many do. Another fact to consider (god forbid, but it is a huge factor for many 60+) is a great increase in health care costs. Comân, the truth is, that there are practically no healthy 60+, we all have something at this age. We can only try to do our best to avoid health problems, but it will last only so long, then you get sick. There are very few people who simply die of old age, majority die of various diseases.
Personally, canât see the attraction of having a 2nd home to maintain. Itâs all we can do to keep out one small place in decent shape, and itâs only 1200 square feet!
I think so much depends on whether folks will have any pension, medical insurance, when and amount of SS, any other sources of income and how much they need to live on every year.
The thing is, once you retire/quit, it can be tough getting back into the workforce and commanding the salary you need because you quit too soon. There is a shrinking job market for older workers, even those with great skill sets and lots of the jobs are part time hourly.
We are still thinking through many things about retirement. It may be that we rent a place a few months - that would be a lot cheaper than having a 2nd home. I do know people that have a 2nd home due to parents having died and then it allows them to go to that area for extended visits. H and his brothers will inherit parentsâ home, which, if it were in a bigger city would have more value. Right now it has a lot of upkeep needs - the house has good bones and has been maintained. We will see if someone wants to buy the others out when the time comes.
H inherited his parentsâ family home. We have a property manager and rent it out. It is too much work for us to maintain and live in more than one home. Fortunately, the manager is good and the rental covers the expenses, with a some positive cash flow. At some point, we may sell the home and use the equity to for something else. Having a stream of income is niceâhaving to maintain an extra home or property is WORK, especially as the property ages. Itâs more relaxing in may ways just to rent when visiting the area rather than facing the myriad of things that have needed attention sine the last visit.
We have a 2nd home. When my father died, we had three homes. We finally got rid of his after killing ourselves cleaning it for almost 2 years. Now weâre looking to get rid of these two homes and downsize into one smaller home. I like the idea of renting for the winter in a warmer location - a different location each year.
We are in a âwarmerâ location, and like to visit âthe northâ over summers.
The Wells Fargo study was pretty similar to what I have seen on AARP publications on retirees or near retirees with little or no savings.
Many on this thread are well prepared for things that can go wrong.
It was interesting reading on how the 2001 and the 2007-2009 recessions negatively affected those close to retirement war babies, (born 1940-1945) and early baby boomers (born 1946-1951).
ââStart saving earlyâ. Workers who have consistently saved for retirement since the first day they began working have saved 2.5 times more than those who have not saved consistently.â This kind of follows what is in the book
âThe Automatic Millionaireâ by David Bach (2004) - which I have mentioned on this thread before. It is pay yourself first, and make it automatic. He mentions the âSleep well at nightâ test (SWAN): My monthly expenses total _. I currently have saved. This equals _____months/years worth of expenses.
One can have stresses one cannot control, but if you have the comforts of money (and also take away the stresses of having no money), that can have life be better.
Great book!!! I agree with paying yourself first and making it automatic!
@HImom, we are thinking of two homes â one on the east coast and one on the west coast. We were talking with our FA yesterday about trading in our 5 BR exurban home, which is perfect for families with school-age children, for a place downtown that we could rent or AirBnB when we are on the west coast. At the moment, we will try to rent the same place we are in on the west coast. But, over time, we would try to buy on a dip. I am giving up my idea of a house in the Canadian Rockies if we come each year to the west coast.
Finally have the time to read the link in post 8275, www.epi.org.
This is the interesting point (to me at least.) Now I know the top 1% has $1,080,000 saved in retirement accounts, and the 90 percentile family has $274,000 in retirement accounts. (I guess it excludes the equity accumulated in their home.)
âearly half of working-age families have nothing saved in retirement accounts, and the median working-age family had only $5,000 saved in 2013. Meanwhile, the 90th percentile family had $274,000, and the top 1 percent of families had $1,080,000 or more (not shown on chart). These huge disparities reflect a growing gap between haves and have-nots since the Great Recession as accounts with smaller balances have stagnated while larger ones rebounded.â
Well, I give you credit. We are challenged just keeping our house in semi-decent shape, plus rental habitable. I would find having two residences beyond our desires. I would consider and believe prefer a Redudence Inn type situation or renting an apartment for awhile for the place we visit over owning two residences, I think.
H never wants to be away from our home for more than a few weeksâ5 tops. As we get older, he prefers ever shorter trips. Perhaps we will rethink if our kids settle far away and start their families. Family is important to us. My extended family mostly lives in Honolulu. Our kids are still deciding.
@HImom Since you are living in a paradise, no need for a second home! 
Honestly, affording the first home and keeping it in shape is the problem! ;
I hear you. Same situation here. We decided weâd rather rent other peopleâs vacation homes than deal with the headaches of another home. That way, weâre not tied down to any one place, either. Weâve rented in many US and foreign locations and the vast majority of the experiences has been great.
We knew a flight attendant. She had a home in SF, VA and LA. They would get mixed up about where they left different things. They didnât really seem to enjoy having to maintain so many places. Not sure what they ended up doing.
The following data may be more âobjectiveâ:
http://www.financialsamurai.com/the-average-net-worth-by-age-for-the-upper-middle-class/
There is a big difference between the average net worth and the median net worth, e.g., $844,000 vs $249,000 for the age group 55-64 (Source: Federal Reserve)
These statistics about retirement savings - is it per person in a married couple or per couple?