Don't be average

[Onward]

It's a good thing everybody loves their j*bs.

Study: Average 401(k) Participant Can’t Retire Until Age 73 - Focus on Funds - Barrons.com

 

[FinanceDude]

Good thing I don't HAVE a 401K............

 

[RockMonkey]

They might conclude the same thing if they only looked at my 401K contribution, since it's less than half of my total monthly retirement savings. I wonder how many of their participants are also contributing to a Roth or traditional IRA, or to taxable savings accounts? Surely the outlook would be at least marginally rosier, no?

My company has a very generous 401k match, but limits my selection of investments such that I find it unappealing to contribute non-matched funds. Instead I contribute to a Roth and a taxable account, where my returns have been much higher than my 401k returns. I would wager many of the study participants who are paying attention to their retirement accounts are in the same boat.

 

[lyndontravis]

If given the chance I would choose to be a businessman than to be an employee. They say that even how hard working you are as an employee, you will never get rich, but not on the case of a businessman.

 

[Alan]

They might conclude the same thing if they only looked at my 401K contribution, since it's less than half of my total monthly retirement savings. I wonder how many of their participants are also contributing to a Roth or traditional IRA, or to taxable savings accounts? Surely the outlook would be at least marginally rosier, no?

They usually fail to take this into account. Many folks move jobs and roll their pensions and /or 401ks into IRA's, plus other reasons they build up IRA accounts and other savings in excess of their 401k. When we ER'ed our IRA money and other savings was 4 times higher than my 401k - partly because DW had a cash balance pension and a 401k and a SEP-IRA which were all rolled to IRA's when she ESR'ed 5 years ago at age 50.

 

[SunsetSail]

They might conclude the same thing if they only looked at my 401K contribution, since it's less than half of my total monthly retirement savings. I wonder how many of their participants are also contributing to a Roth or traditional IRA, or to taxable savings accounts? Surely the outlook would be at least marginally rosier, no?

My company has a very generous 401k match, but limits my selection of investments such that I find it unappealing to contribute non-matched funds. Instead I contribute to a Roth and a taxable account, where my returns have been much higher than my 401k returns. I would wager many of the study participants who are paying attention to their retirement accounts are in the same boat.

I thought the same thing but for a different reason. I am statutorily limited to a 6% contribution as a highly compensated employee (their definition, not mine) in a top hat plan. They would conclude that I am poorly prepared for retirement. Never mind that I save approximately 50% of my income.

 

[foxfirev5]

I guess they are trying to make the point that a great majority of people are not saving enough for retirement. However I don't see much value in the statistics that are trying to prove the point. Each person has a different situation regarding the amount invested/saved and the amount required in retirement. A person making $40k/year may need 100% of their preretirement income. Another person making $140 / year and saving over 50% of their income may actually need a far less percentage in retirement.

 

[LOL!]

The study really restricted itself to looking at 401(k) plans. Oh well.

I imagine a poll on this forum would show that 401(k) assets of the near-retirement employed amounted to less than one-third of their retirement assets on average.

 

[kumquat]

OK, I want to be average so I have to find a job for the next 12 years. Anybody here hiring?

 

[haha]

If given the chance I would choose to be a businessman than to be an employee. They say that even how hard working you are as an employee, you will never get rich, but not on the case of a businessman.

"They" my say this, but "they" would be wrong in many instances. I know plenty of software employees who are rich by tougher standards than we usually have on this board. Wall street? Self employed hedge fund managers do extremely well, but plenty of bank and brokerage and fund employees also do very well. How about executives who are drowning in options and bonuses, no matter how good or bad they may be?


Ha

 

[Danmar]

"They" my say this, but "they" would be wrong in many instances. I know plenty of software employees who are rich by tougher standards than we usually have on this board. Wall street? Self employed hedge fund managers do extremely well, but plenty of bank and brokerage and fund employees also do very well. How about executives who are drowning in options and bonuses, no matter how good or bad they may be?


Ha

I agree. Senior execs generally do very well.

 

[Jay_Gatsby]

I agree. Senior execs generally do very well.

Being in the right place at the right time has a great deal more to do with such "accidental" success than actual talent. In many cases, by the time an organization is demanding top-notch talent, the easy money will have already been made. Just look at many folks who joined Oracle when it first started - they needed the jobs, while Larry was looking for talent who would work for peanuts.

 

[myself]

I agree with a lot of the others. I'm only putting into 401K up to match. Aside from that we're funding Roth IRAs.
If we ever max the Roths out, we'll probably open a regular brokerage account since we already have an account with Fidelity.