Millennials want to retire by 61, but most have nothing saved

[Dahobbs 17526]

1 minute ago, Spankytoes said:

My oldest son (College Soph.) is turning 20 in December. I literally sat down with him and made a budget in Excel using his actual earnings and spending habits. As I suspected, he was spending about $200.00 more a month than what he was bringing in because he was using his debit card for small purchases and couldn't balance his budget. So I told him to go to the ATM and pull out $40.00 a week. Every time he wants to purchase something, if he has cash in his pocket, he can afford it. If he doesn't, he can't afford it. Don't use the debit card anymore. Also, just because he has money in his bank account, doesn't mean that he has money to spend. He has to prepare for unforeseen issues, like someone breaking into his car or a cutback in hours at work. 

Everything was great...for about 3 weeks. I had to text him this morning to find out why his account was getting debited by an app called Robin Hood. Turns out that he wanted to learn about stocks and $100.00 a week to test the market, when he is eating ramen noodles, seemed like the way to do it.

I like Mint.com for that purpose. Let's you track everything in real time. Some will not like it because it aggregates all your financial information (and they sort of sell it to send you deals). But, the ability to really see where your money is going is really key to cutting back spending and following a budget. And the fact that I can catch any irregular transaction almost instantly is also really nice.

As to your son, at least he was investing? Get him to decrease that to $25 a week (and invest in broad index funds, not individual stocks) and it doesn't seem so bad. Might even be good. 

[Dahobbs 17526]

30 minutes ago, Okie State said:

I'd mix in Roth contributions too so you're diversified once you reach retirement. You never know where tax rates will be in the future.

Strongly agree with this. Also, I am an optimist. I plan on being in a higher tax bracket at retirement. 

[MissingInAction 25012]

I'll be retiring at 58 if I can manage to keep my shit together until then.

[Spankytoes 1739]

12 hours ago, CooterBrown said:

 

If I had to do it over again, I’d do the 40 by 40 instead of working a real job.

 

Why not both?

[phdhorn 6224]

6 minutes ago, MissingInAction said:

I'll be retiring at 58 if I can manage to keep my shit together until then.

Try some of this:

[Captainant 27637]

1 hour ago, Dahobbs said:

I like Mint.com for that purpose. Let's you track everything in real time. Some will not like it because it aggregates all your financial information (and they sort of sell it to send you deals). But, the ability to really see where your money is going is really key to cutting back spending and following a budget. And the fact that I can catch any irregular transaction almost instantly is also really nice.

As to your son, at least he was investing? Get him to decrease that to $25 a week (and invest in broad index funds, not individual stocks) and it doesn't seem so bad. Might even be good. 

+1 for mint. I tried to go the excel sheet route, but it was a beating keeping it up to date. It's gone a long way to keep me aware of how much I'm spending and what my habits are so I can adjust and actually plan

[ShaggyBevo RIP 3868]

Unless healthcare costs come under control few are retiring early.  Every time early retirement comes up with our peers that could do it they are too scared of healthcare costs to do it. 

[HoustonFrog 368]

On 7/19/2018 at 9:29 AM, TwiceHorn said:

Just out of curiosity, what is the entry-level salary for an accountant and a BBA finance type.

 

In my day, accountants made mid to high 20s, BBAs maybe a little lower, and engineers solidly into the 30s, which was about as high as a bachelors graduate got.  Now an engineer makes triple that.

Sounds like that general scale, from the late 80s to early 90s held until the aughts, at least.

Big Four accounting - $55k-$60k. 

Big Bank (non Investment banking) - $70k salary + 15% bonus. 

[TexArcher 37767]

2 hours ago, Okie State said:

I'd mix in Roth contributions too so you're diversified once you reach retirement. You never know where tax rates will be in the future.

Right.  Also a good idea if you ever plan on selling a house to downsize or whatever.  You'll be very glad you have a tax-free bucket to pull from that year.

[HoustonFrog 368]

I am a late late 20's millenial. I saved basically nothing from 22-26 besides some 401k, traveled a bunch, paid off minimal student loans, got my Masters degree at night, got married, saved a little bit for a down payment and bought a house. Since then we have been working hard to save, my company matches 7% in 401k and we max it out and put about 10% more into our investment account. Just had our first kid and we decided to do the single income thing... which was rough. Went from making mid $200s combined to a lot less.

I hope to retire by 55 or the day my eventual youngest child goes to college, whichever comes later. If we stick to our savings plan we should make it, but if the market goes way south, or we have an unforeseen financial difficultly, it won't happen. 

I'm going to be real interested in what the long term macro-economic impact is of millenials having dual incomes in the vast majority of cases which is leading to much much fewer kids, if any at all. As a new millenial father, I would recommend to a LOT of my younger friends that they have no business having kids. It isn't going to fit their life and make them happier. 

[Cheeseweasel 26438]

14 hours ago, Okie State said:

I won't lie and say I don't wish I had spent more time traveling in my 20's before I had kids. I started out of the gate at 21 with a decent retirement plan, but didn't have a ton left over for all the fun stuff. If had it to do over I probably would balance that a little better.

I think that's where most Millennials are. They've watched their parents scrimp and save & work for The Man only to be laid off when the shit hit the fan. They tend to have a "fuck you, pay me now" attitude that I understand based on what they saw happen to their parents.

[Js1 85276]

19 minutes ago, ShaggyBevo RIP said:

Unless healthcare costs come under control few are retiring early.  Every time early retirement comes up with our peers that could do it they are too scared of healthcare costs to do it. 

I have no plans to retire early. But I also have no plans to have kids or own a house. 

[HoustonFrog 368]

2 minutes ago, Js1 said:

I have no plans to retire early. But I also have no plans to have kids or own a house. 

Uhhh you're doing it wrong. The whole point of not having kids or house is to retire early

[52-80 19147]

1 minute ago, Js1 said:

I have no plans to retire early. But I also have no plans to have kids or own a house. 

The only financial planning regret I have is not buying a house sooner. 

Not talking about Dave Ramsey Kawasaki shit about being a slumlord... Just buying a reasonable property if you are positioned to do so.

[Js1 85276]

2 minutes ago, HoustonFrog said:

Uhhh you're doing it wrong. The whole point of not having kids or house is to retire early

I'm not in a position to ATM.  Paying student loans is a bitch. 

[MissingInAction 25012]

37 minutes ago, ShaggyBevo RIP said:

Unless healthcare costs come under control few are retiring early.  Every time early retirement comes up with our peers that could do it they are too scared of healthcare costs to do it. 

Why i put in with the gubmemt. 100% coverage and the retirees I know say it's great.

[Okie State 3814]

I am a late late 20's millenial. I saved basically nothing from 22-26 besides some 401k, traveled a bunch, paid off minimal student loans, got my Masters degree at night, got married, saved a little bit for a down payment and bought a house. Since then we have been working hard to save, my company matches 7% in 401k and we max it out and put about 10% more into our investment account. Just had our first kid and we decided to do the single income thing... which was rough. Went from making mid $200s combined to a lot less.
I hope to retire by 55 or the day my eventual youngest child goes to college, whichever comes later. If we stick to our savings plan we should make it, but if the market goes way south, or we have an unforeseen financial difficultly, it won't happen. 
I'm going to be real interested in what the long term macro-economic impact is of millenials having dual incomes in the vast majority of cases which is leading to much much fewer kids, if any at all. As a new millenial father, I would recommend to a LOT of my younger friends that they have no business having kids. It isn't going to fit their life and make them happier. 

Is your last statement specific to your friends? Or meant for Millennials in general?

[SuingToGetAMessageBoard? 3861]

23 minutes ago, 52-80 said:

The only financial planning regret I have is not buying a house sooner. 

I keep my house sooner living out back.  He mostly mows and fixes me drinks.  You have to pay them regular wages though.  No buying.

[HoustonFrog 368]

9 minutes ago, Okie State said:

33 minutes ago, HoustonFrog said:

I am a late late 20's millenial. I saved basically nothing from 22-26 besides some 401k, traveled a bunch, paid off minimal student loans, got my Masters degree at night, got married, saved a little bit for a down payment and bought a house. Since then we have been working hard to save, my company matches 7% in 401k and we max it out and put about 10% more into our investment account. Just had our first kid and we decided to do the single income thing... which was rough. Went from making mid $200s combined to a lot less.
I hope to retire by 55 or the day my eventual youngest child goes to college, whichever comes later. If we stick to our savings plan we should make it, but if the market goes way south, or we have an unforeseen financial difficultly, it won't happen. 
I'm going to be real interested in what the long term macro-economic impact is of millenials having dual incomes in the vast majority of cases which is leading to much much fewer kids, if any at all. As a new millenial father, I would recommend to a LOT of my younger friends that they have no business having kids. It isn't going to fit their life and make them happier. 

Is your last statement specific to your friends? Or meant for Millennials in general?

I guess it's hard to say. I am surrounded by other millenials at my work, a lot younger than me and still single. For about 50% of them I would recommend they don't consider having kids... the way they live their lives and have priorities would never fit with a kid. I've always been an "old soul" and knew I wanted kids and enjoy staying home being a homebody. And even for me the transition has been really hard. 

Going for a 30 minute run or watching a sporting event becomes a task equivalent to moving mountains, much less going out to eat and socializing. 

Edited July 20, 2018 by HoustonFrog

[Anastasis 23463]

4 minutes ago, HoustonFrog said:

 Going for a 30 minute run or watching a sporting event becomes a task equivalent to moving mountains, much less going out to eat and socializing. 

You need to have another in close time.  Give them a few more years, and they will entertain themselves. 

[MissingInAction 25012]

Plus, kids are absolute cock goblins. 

I'm in my mid 40s and only about 15% of my circle of friends ,which is vast, has spawned. Luckily the browns breed like rabbits to pick up our slack.

[HoustonFrog 368]

2 minutes ago, Anastasis said:

You need to have another in close time.  Give them a few more years, and they will entertain themselves. 

That's the active plan. 

[Okie State 3814]

I guess it's hard to say. I am surrounded by other millenials at my work, a lot younger than me and still single. For about 50% of them I would recommend they don't consider having kids... the way they live their lives and have priorities would never fit with a kid. I've always been an "old soul" and knew I wanted kids and enjoy staying home being a homebody. And even for me the transition has been really hard. 
Going for a 30 minute run or watching a sporting event becomes a task equivalent to moving mountains, much less going out to eat and socializing. 

I think most people's priorities change when they get older. Kids aren't for everyone obviously, but I'm not sure I'd agree with your reasoning as to why they shouldn't consider having them. Sacrifices are made, but it's worth it...at least to me. To each their own though.

[HoustonFrog 368]

1 minute ago, Okie State said:

 

 

I think most people's priorities change when they get older. Kids aren't for everyone obviously, but I'm not sure I'd agree with your reasoning as to why they shouldn't consider having them. Sacrifices are made, but it's worth it...at least to me. To each their own though.

 

Yep, no doubt people change as they get older and it's hard to say for each person. We have a few friends in 30s who have made the decision to not have kids and it makes a lot of sense for them. They enjoy living glamorous lives with dual incomes and plenty of cash and time. I see those same priorities in a lot of my younger millenial friends. 

[Aqua Buddha 14582]

I always laugh at divorced dudes who get remarried to some younger woman and have kids in their 40's and 50's.  They'll be 70 years old with Johnny still on the books.

[Okie State 3814]

 

 

Yep, no doubt people change as they get older and it's hard to say for each person. We have a few friends in 30s who have made the decision to not have kids and it makes a lot of sense for them. They enjoy living glamorous lives with dual incomes and plenty of cash and time. I see those same priorities in a lot of my younger millenial friends. 

 

Yeah, I get it to an extent. Unfortunately, that trend is unsustainable as the poors will continue to reproduce regardless.

[luke duke 6412]

I have maxed out my 401k since I started working 15+ years ago. My company has had some match but at this point I don't even remember what it is.  I basically take as much tax deferral as I can.  Max out dependent day care, health care savings account...  Bottom line:  decrease your taxable income as much as possible and find a way to live off the rest of your paycheck and keep saving more on top of that.

You may want to google RMDs (Required Minimum Distributions). It may behoove you to mix in a Roth IRA and/or a taxable account into your portfolio.

[RD3 64]

11 minutes ago, luke duke said:

You may want to google RMDs (Required Minimum Distributions). It may behoove you to mix in a Roth IRA and/or a taxable account into your portfolio.

 

We make too much for the Roth IRA but I'll google the RMDs...  

[TxEx99 31]

I kinda understand why people love traditional IRAs but man I'm hoping to be in a way different tax bracket when I'm older and have converted and still contributing to my ROTHs.  A little more pain now for that sweet tax free later is just too tempting.  

Is anyone else working for a company without a 401k?  Semi-self employed.  Technically I work for my dad which means there no match, no 401k period, and I can't even start a SEP because it's not my company.  Being single and childless helps but every dime of retirement is what I've saved.  It can be hard but anyone can make it work with some discipline.  Weekly auto investments are the only way to go.  In and out of your account before you even realize.

[luke duke 6412]

We make too much for the Roth IRA but I'll google the RMDs...  

 

Google “Backdoor Roth” while you’re at it.

 

[Aqua Buddha 14582]

32 minutes ago, luke duke said:

 

Google “Backdoor Roth” while you’re at it.

 

I googled your mom's back door last night.

[luke duke 6412]

I googled your mom's back door last night.

I’m sorry.

[North Austin 10]

50 minutes ago, TxEx99 said:

I kinda understand why people love traditional IRAs but man I'm hoping to be in a way different tax bracket when I'm older and have converted and still contributing to my ROTHs.  A little more pain now for that sweet tax free later is just too tempting.  

Is anyone else working for a company without a 401k?  Semi-self employed.  Technically I work for my dad which means there no match, no 401k period, and I can't even start a SEP because it's not my company.  Being single and childless helps but every dime of retirement is what I've saved.  It can be hard but anyone can make it work with some discipline.  Weekly auto investments are the only way to go.  In and out of your account before you even realize.

Have you considered operating as an independent contractor?  Seems like the most reasonable solution to your problem since it would be your own company. 

[TexArcher 37767]

1 hour ago, RD3 said:

We make too much for the Roth IRA but I'll google the RMDs...  

Talk to your HR about setting up a Roth 401k.  No income limits.  Worth a shot...

[Brew 3049]

3 hours ago, Anastasis said:

You need to have another in close time.  Give them a few more years, and they will entertain themselves. 

Amen, we went 2.5 years apart which basically kept us in a diaper phase for 5 straight years but then it's done. Once they hit about 7 and 4 it became easy street. We put them in the same sports so they have practice together, play on the same teams most years, somewhat like each other and keep each other occupied, etc. Now we're getting to the stage where the older one can help the younger one with homework and in a couple more years she can drive the younger one to everything also if she wants us to buy a car. Cars, graduation, college, etc. all stack up together too. There will be no "oops" baby coming late in life (assuming the statistics hold) and at 45 or so they are out of the house.

Then it will be time to trade the wife in for a newer model, give away half my shit, and have some sort of awesome mid life crisis. 

[Anastasis 23463]

Amen, we went 2.5 years apart which basically kept us in a diaper phase for 5 straight years but then it's done.

Yeah, until that third little accident happens. We had the second out of diapers and within a few days the pee stick of truth reared it’s head. At all good, he’s actually my favorite.

[Richter 2256]

On 7/18/2018 at 1:51 PM, Armybrat said:

I retired at 52 in 1997, the wife at 59.

Due to health issues, didn't think I'd get to enjoy it this long. But hey, just shoot me. 

You're the original millennial.

[TxEx99 31]

2 hours ago, North Austin said:

Have you considered operating as an independent contractor?  Seems like the most reasonable solution to your problem since it would be your own company. 

I've thought about making myself an LLC and then funneling everything through there rather than distributing to myself via a K-1.  Certainly something to think about and talk to an accountant about.

[NotActuallyALonghorn 4975]

2 hours ago, TexArcher said:

Talk to your HR about setting up a Roth 401k.  No income limits.  Worth a shot...

Yeah, I was gonna say we have the option of contributing to both traditional 401k and Roth 401k at my job.

[Twizzler 161]

The older I get, the bigger 'number' my wife and i think we need. 

I'm thinking actually retiring is going to be a hard choice/feel very risky.

[Pato del Muerto 52485]

7 hours ago, Anastasis said:

You need to have another in close time.  Give them a few more years, and they will entertain themselves. 

I had 2 at the same damn time. Now when I’m home, all I am is a referee. 

[Telegraph_it 3357]

When you guys say you max out your 401k do you mean saving $18.5k a year or max to get the match?

I hear so many people say they max out their 401k but I think are they really saving 15-25% of their income in 401k?

[Celery Man 20931]

I feel like a lot of people say "max my 401k" and mean "get the entire employer match".  But that's not how I read it above.  Of course, "I've maxed my 401k since I started working" is a pretty good humblebrag/js1's criticism of the bragginess there would be valid.  If you've put 18.5k of your own money into your 401k since the beginning of your working career, that's awesome but even if you're aggressive very difficult if you don't start off with a high salary.

[Okie State 3814]

I do not currently max out at the $18.5K, but it's close. With the employer contributions I'm at around $30K-$35K/year. That's probably a lot to some people and peanuts to others. I feel pretty good about where I'm at, but am far from Surly 1% range.

 

I do know people my age who max out at $18.5K, but they have a higher combined income with their spouse than I do. We're pretty much saving as much as realistically possible for us. Once the kids are out of daycare, we can save more.

 

 

[Telegraph_it 3357]

The only way I could max mine out is put my bonus in the 401k. I know quite a few people at work who do that and then forget to change their % back for the next paycheck. 

[luke duke 6412]

When you guys say you max out your 401k do you mean saving $18.5k a year or max to get the match?

I hear so many people say they max out their 401k but I think are they really saving 15-25% of their income in 401k?

$18.5k

[Okie State 3814]

I feel like a lot of people say "max my 401k" and mean "get the entire employer match".  But that's not how I read it above.  Of course, "I've maxed my 401k since I started working" is a pretty good humblebrag/js1's criticism of the bragginess there would be valid.  If you've put 18.5k of your own money into your 401k since the beginning of your working career, that's awesome but even if you're aggressive very difficult if you don't start off with a high salary.

I'm pretty sure our company used to have a max contribution of 30% of your salary so maxing out a 401k wouldn't even be possible at the typical starting salaries. Not sure if they still cap that or not.

 

[Amobie 58]

6 hours ago, TxEx99 said:

I've thought about making myself an LLC and then funneling everything through there rather than distributing to myself via a K-1.  Certainly something to think about and talk to an accountant about.

That's how i've operated for about a decade and it definitely has advantages.  You can write off a lot of business expenses that way. 

[TxEx99 31]

1 minute ago, Amobie said:

That's how i've operated for about a decade and it definitely has advantages.  You can write off a lot of business expenses that way. 

Good to know.  I may have to sit down with an accountant soon and discuss how that would work for me.  

[North Austin 10]

40 minutes ago, Okie State said:

I do not currently max out at the $18.5K, but it's close. With the employer contributions I'm at around $30K-$35K/year. That's probably a lot to some people and peanuts to others. I feel pretty good about where I'm at, but am far from Surly 1% range.

 

I do know people my age who max out at $18.5K, but they have a higher combined income with their spouse than I do. We're pretty much saving as much as realistically possible for us. Once the kids are out of daycare, we can save more.

 

 

Yeah you can kiss that idea goodbye.  Maybe after they graduate from college.