Personal Finance on Sidechat | To all my people in their 20s how are you guys planning for retirement. I just calculated I’d need 10 million at 65 to retire with todays equivalent of 10k a month. Just how 😭

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Personal Finance 3w

To all my people in their 20s how are you guys planning for retirement. I just calculated I’d need 10 million at 65 to retire with todays equivalent of 10k a month. Just how 😭

Anonymous 3w

Spend minimum, invest the rest, no planning needed

😉

Anonymous 2w

#3’s plan is a good one. Always put 6% into your 401(k) if your employer has matching. Put aside another 10% of the rest of your paycheck. (I personally prefer a pretax 401(k) contribution instead of an after tax Roth contribution, but that’s just me.). periodically add an addition 1% as you your annual salary increases grow. The thought here is that you won’t really even miss the additional one percent from your take-home pay.

Anonymous 3w

10k a month? Tf you need 10k a month for? I spend 20k in a year without budgeting

Anonymous 2w

My goal is $5,000,000 estimating that I only take out 2% a year ($100,000 per year). I’m in my early 20s

Anonymous 2w

Gotta remember inflation and compounding interest. Your highest years are gonna be right before you retire, 10k / month isn’t too too wild 50 years from now. Between now and then you’re gonna earn a ton that’ll keep growing. If you double your money every 20 years, same is true in reverse. You’re looking at closer to 2k per month right now. Which is still aggressive, though you did want 10mil.

Anonymous

#1 3w

If you do the math I would need to save over 10k a month to hit the 10 million goal tho, so your strategy doesn’t really work seeing as I’m not making over 10k a month at 25

Anonymous

#1 3w

Dollar cost averaging and responsible living. What.

Anonymous

OP 3w

Why do you need 10k/month in retirement if you’re not even making 10k/month now and you’re alive

Anonymous

#2 3w

You naturally DCA by having income. You make money every year, invest it every year. No planning involved

Anonymous

#1 3w

Because I live with my parents right now so I don’t pay rent but I pay utilities and other stuff. And I live in a HCOL area so when I live on my own it’ll be around 10k

Anonymous

OP 3w

Literally where? I live in a luxury apartment in Manhattan and I spend maybe 5k/month. And if you can’t make enough to afford a lifestyle maybe you need to step down the lifestyle to make your budget make sense. Also good change you still want to live in the same type of high density HCOL environment when you’re 70 anyways

Anonymous

#1 3w

But I assume you live alone? You don’t think once you have a family or get older you’ll accumulate more expenses that’ll be close to 10k?

Anonymous

OP 3w

Sure when you’re 45 and have income you’ll have higher expenses. But when you’re retired and kids are moved out and independent, you realistically don’t want the hassle of living in a 3-5 bedroom home on your own, super high energy high density hcol environment, etc. You’re not going out and having crazy entertainment expenses because lowkey you dgaf and have done enough of that, etc

Anonymous

#1 3w

So What do you think is a good monthly income goal for retirement?

Anonymous

OP 3w

Like I said, my philosophy is save everything you can, and whatever you end up with, so be it, because you did everything you could anyways. A goal is only as good as the plan that you follow for it

Anonymous

#1 3w

OP is completely disregarding compound interest I think.

Anonymous

#1 3w

Yeah but you have no goal, a plan with no destination sounds like a good way to end up with a bad surprise

Anonymous

#2 3w

No i just used a rate of return of 3%. Bc the market is projected to return less than the current average, so more like 6-7% and inflation has been around 3% forever now. So real return if 3%

Anonymous

OP 3w

That’s why I’m asking people in their 20s who will get the lower returns instead of the current 8-10%

Anonymous

OP 3w

If I save everything I can and still end up with a bad surprise, then what more could I have done anyways. But sure idk goal is retire with 1bn net worth, we’ll see how close I get 🤷‍♂️

Anonymous

OP 3w

Also the 10 million is in 2065 dollars, it’s the equivalent of about 3 million today

Anonymous

#3 3w

Anyways my goal is an equivalent of a fund that can support me on 50k-75k a year for 30 years with a substantial health savings account and home. Right now I put 12% towards my Roth 401k and get a 6% match. I also get a 10% bonus each year and put 6% of that towards retirement for the match. Spending 20k a year I’m able to invest everything else. Not using retirement accounts for the rest bc I want to be able to liquidate and buy a home in the next 3 years when I feel ready.

Anonymous

#3 3w

When I say equivalent I mean after 30-40 years of inflation

Anonymous

#3 3w

20k a year? Where do you live?

Anonymous

#4 2w

How much are you saving right now to reach that goal

Anonymous

OP 2w

Nothing, tryna find a job rn

Anonymous

#6 2w

2K per month as in that’s what I should be saving rn?

Anonymous

OP 2w

That was the super aggressive back of the napkin math. It doesn’t account for raises or increased income over your lifetime. Assuming your salary will triple over your lifetime, you can probably half that amount without too much concern. (Again these are all rough estimates ask chat gpt for a better approximation)

Anonymous

OP 2w

Kentucky and I split rent so I’m down to 750-850 a month on housing + electric + wifi. Housing is gonna be the biggest differentiator between saving a lot and a little