Originally Posted by MichaelB
The most important investment returns for a 30 year old will not result from his or her current portfolio but from regular and continued additions over then next 20 years.
Well yes for the 30 somethings TODAY, but that was not the case for many of the 60 somethings on the board.
I entered the workforce full time in 1999. I'm only 13.5 years into the 20 year run here but, but so far most people my have age gotten average bank interest and stock market returns of ~2% during their working years. If I contribute $16.5k 401k + $5k IRA into retirement accounts and get ~2% returns, my average returns will exceed my contributions once those accounts have grown to $1M. Given today's contribution limits and ~2% returns, it looks like it is going to take me till my early 50s to get to $1M into my retirement accounts.
On the other hand if I had entered into a 1979-1999 like economy where ~15% average stock market returns were common, my returns would exceed my contributions once the accounts grew to $150k. My bank interest would also be returning ~9% on average instead of ~0.9%. I'd also be likely to have a modest pension and retiree health benefits in my career path so I wouldn't need to have as large a nest egg.
I think the OP is thinking its not going to be as easy for our generation to retire early as the one before us. He is likely correct. I for one am not too worried about it. I've averaged healthy (for this economy) 1% annual raises over the last 5 years while college tuition has continued to go up ~7% a year. Since I have a 6 year old ($250-500k tuition?) and 1 year old ($350-700k tuition?), I figure I'll just win one big lotto jackpot (from one of the two lottery tickets I buy every year) and that should leave enough left over to cover early retirement too.