How much do kids make coming out of college?

[CSdot]

Just saw this post on CNBC suggesting you should shoot for $3M by age 50 by merely investing $5k per month from age 22 - 50.

https://www.cnbc.com/2021/03/19/retire-by-50-how-much-you-need-to-invest-to-save-3-million-.html

I’m sorry, but are the NYC journalists at CNBC woefully out of touch, or just incredibly overpaid?

Nevermind, student loan payments, housing, living expenses, getting married and having a family, etc., do kids coming out of school now have incomes that can support putting away $5k per month or $60,000 per year. Presumably some of that would be after tax as 401(k)s and IRAs have limits.

What am I missing?

 

[njhowie]

I’m sorry, but are the NYC journalists at CNBC woefully out of touch, or just incredibly overpaid?

Both!

 

[RVplusDog]

My nephew made almost six figures out of college with a MS in chem, working for an oil company. I haven’t heard of any other college grads making close to that unless they’re lucky, good, AND connected enough to get into a high salary finance position. Sometimes certain sales positions can compensate them in healthy six figures, but again they’ll need the luck, skill, and connections. My experience & knowledge aren’t in the HCOL areas though.

 

[splitwdw]

Just saw this post on CNBC suggesting you should shoot for $3M by age 50 by merely investing $5k per month from age 22 - 50.

https://www.cnbc.com/2021/03/19/retire-by-50-how-much-you-need-to-invest-to-save-3-million-.html

I’m sorry, but are the NYC journalists at CNBC woefully out of touch, or just incredibly overpaid?

Nevermind, student loan payments, housing, living expenses, getting married and having a family, etc., do kids coming out of school now have incomes that can support putting away $5k per month or $60,000 per year. Presumably some of that would be after tax as 401(k)s and IRAs have limits.

What am I missing?

I looked at the video and it says "IF you want to have 3 million" not "CNBC suggesting you should shoot for $3M by age 50"

 

[Andre1969]

Wow. I'm 50 right now, about to turn 51 in about 2 weeks. And I don't even invest anywhere close to $5000 per month now! With my 401k, it's about $2000/mo, once you throw in the company match. I didn't even start contributing to a 401k until I was 27, and wasn't able to start putting in the federal max until I was probably 35 or 36.

Most recent college graduates I know aren't in a position to put away $5000 per month. One of them has about $20,000 in student loans, and works part time at Target making $15/hr. I forget what his major was...communications or something like that. I think he's 26.

Another one is around 27-28. I think he had some kind of psychology degree. He works two jobs, and one of them is driving a bus. I also know a few people, who are around graduation age...however, they never had the chance to go to college.

Now, I know the pool of people I'm picking from isn't exactly Harvard and Yale graduates, but I have a feeling this goal is out of reach, for most people. Still, I guess the exercise shows that it takes a lot of work, patience, risk tolerance, and a little luck, if you want to get a good pile of money saved up. And even then, when you think about it...$3M in 30 years, will probably be about $1.5M in today's dollars, thanks to inflation.

 

[CSdot]

As for the IF comment, doesn’t change the fact that the writer seems out of touch with reality considering this is on CNBC’s “retirement guide” page. We can play semantics, but assuming your reader’s ability to fund $5k month right out of college seems a lot like a fitness site saying IF you want to play in the NBA, do x, t and z, while assuming all readers are over 6’5”.

 

[tulak]

FireCalc says I’ll have an average of 4.3mil investing 60k/year for 28 years. For 3mil, invest 42k/year or 3.5k/month.

Still a high amount and probably not realistic for a college grad. I wasn’t going to read the article - I avoid CNBC since it’s mostly click-bait - but figured I should since I’m responding...

4% yearly growth assumption with constant savings. Why not assume that your rate of savings will increase over time? And it’s been expected that future growth rates will be less than in the past, but that’s been said for a while and it hasn’t happened yet.

So what did I learn: avoid reading CNBC articles. [emoji2]

 

[TheWizard]

That's a rather dim CNBC article, checko.
My first year engineering salary in 1973 was $13,200 per annum.
My final salary 40 years later was over 10x higher.

Retirement savings should be based on a gradually increasing percentage of one's income, which is expected to increase with both inflation and experience...

 

[jkern]

This is just a fluff piece with a hypothetical situation. How much to save to reach a goal. It has nothing to do with what college graduates actual make.

I'm familiar with multiple college grads (through daughter, step-daughter and friends kids) over the last 7 years or so. They have ranged from about $40K to $180K. The top was a friends daughter that graduated from Harvard Law School.

 

[momoftwo]

Pretty off base IMHO.

Our son with masters degree earned about 65K out of school about 10 yrs ago. No way could he have put 5K away each month.
Im happy he's turned into a self supporting, married, baby on the way, homeowner that has emergency funds, pension, roth IRA.
How much he saves monthly is not my business, nor am I concerned.

My first job out of college in dark ages 1978, was $12,400.
Retired 2019 at just short of 10 times.
I think if you start saving SOMETHING consistently at 25ish, you have a good chance of being OK.

 

[FLSUnFIRE]

This just in, if you are 22 and want to save $3M by age 23 just save $3M a year. I enjoy financial articles a lot but the amount of garbage click-bait articles are really annoying. I click through less and less. Not much journalism around anymore.

 

[Car-Guy]

What am I missing?

Maybe good reporting....

 

[Amethyst]

In '79, my salary was $7500.00. When I got my Federal internship in 1980, it was for the vast sum of just under $14,000.00 which I thought was a fortune, until I realized how little was left after taxes, pension, health insurance.
But I still managed to buy a savings bond every pay

Once I landed an overtime gig, I started saving my OT and was able to build a little stash. Started really saving when I broke down and shared an apartment. But it was thin times up to then.

P

My first job out of college in dark ages 1978, was $12,400.
Retired 2019 at just short of 10 times.
I think if you start saving SOMETHING consistently at 25ish, you have a good chance of being OK.

 

[MrsHaloFIRE]

this just in, if you are 22 and want to save $3m by age 23 just save $3m a year. I enjoy financial articles a lot but the amount of garbage click-bait articles are really annoying. I click through less and less. Not much journalism around anymore.

yes!!!! We have a winner!

 

[CSdot]

Maybe good reporting....

+1

 

[MarieIG]

Obviously, it depends.

An engineer is going to make more than a social worker.

I made an incredibly low salary out of college.

Also, had difficulty getting a job out of graduate school because, back then when I went to interviews they asked if I had a family and children. At that time I had five; and the expressions of shock and horror were something akin to me announcing that I had an active case of the bubonic plague. (My part-time employer also gave me a recommendation about how wonderful I was juggled a job, school, and five children. Useless.)

Eventually got a low paying job ($10 an hour paid as an independent contractor - which I really was NOT) by someone who didn't think to ask about my family, and had to scratch my way up from there. The "independent contractor" moniker was so that I had to pay my own SS; and did not get benefits.

My big "jump" in salary came three jobs later. The hiring partner did not ask about family and I had some experience by that time. Shortly after I was hired female one of my co-workers asked if I were married/ had children. I answered affirmatively (had six by that time) and she ran screaming through the office calling the partner at the top of his lungs "X" Do you know M has SIX children." He said no, I thought she was a kid, but l was already in and wasn't penalized . . .

 

[EastWest Gal]

When I was an intern, my salary for the year was $23K/yr, which was about $5.50/hr with 80 hour work weeks, which was not much over minimum wage. My salary as chief resident was $37K/yr. Starting salary in the practices in which I interviewed in 1988 was $40-65K. I took the $65K/yr job for many reasons beside salary. After 18 months I was partner and making low six figures. But with medical school loans, preterm labor putting me on a part time schedule for 4 months plus not working for the 8 weeks after my C-section, we were playing catch up. We did not save much for retirement until about 5 years into my first practice job. Then maxing out my 401k after that, plus adding to a taxable account regularly.

DH is a musician; the music jobs dried up the first couple of years after I was in practice, so he went back to college and finished his degree. We made an agreement that once we had kids, for awhile, we would be a one income family. DH has never stopped working on music projects, but has not monetized them very much.

The drags on savings are housing expenses, student loans, car expenses, raising a family expenses. I didn't bother reading the article. What was described made me realize it was a ridiculous article. They did not take in account investment income. Really stupid.

My dad's investment income quickly surpassed his salary after we finished college. Mine also surpassed my work income about 10 years ago. In the last two years, the portfolio gains are 2.5x what my salary was.

 

[CSdot]

I agree with those who say a lifetime of savings starts with what you can afford, then increases as you earn more. I found it easiest to increase my 401(k) contribution as I got my annual raise. Half of every raise would go to the 401(k), while the other 1/2 would go towards increasing my family's standard of living. This had the desired effect of increasing my savings, but in a way where I never felt I was depriving myself and never missed the money.

I left that job a number of years ago, but that account is now 7-figures, and the balance grows annually more than I use to make in a year.

 

[tfudtuckerpucker]

Three million dollars in 2021 is not the same as 3 three million dollars in 2051. The present value of that three million dollars might be around one million dollars today, depending on the inflation rate.

 

[copyright1997reloaded]

oh, we have a new game!

What was your starting salary many moons ago vs. the salary just pre-FIRE. In my case 11X plus some bonus/commission $. I'm still working (for fun), but now my base salary is a lot lower, only 3.5X my mega-corp salary from so long ago.

 

[TheWizard]

oh, we have a new game!

What was your starting salary many moons ago vs. the salary just pre-FIRE. In my case 11X plus some bonus/commission $. I'm still working (for fun), but now my base salary is a lot lower, only 3.5X my mega-corp salary from so long ago.

I assume you're joking a bit.
Main point is that over a 30+ year working career, your income typically increases significantly while the percentage of income available for long-term savings/investment also tends to inch upward most years.

But you likely knew all that...

 

[Time2]

oh, we have a new game!

What was your starting salary many moons ago vs. the salary just pre-FIRE. In my case 11X plus some bonus/commission $. I'm still working (for fun), but now my base salary is a lot lower, only 3.5X my mega-corp salary from so long ago.

The 40 years between 1973 and 2013, you need to increase your income 5.2 times to keep even with inflation.

 

[Amethyst]

Mine increased about 12X in 31 years. I was promoted seven times and was at the top of the pay scale, with no way to increase salary on my own (bonuses existed, but only as a small fraction of salary, and not guaranteed). In addition, my salary was frozen during the last 3 years of work.

I actually made more money, during my first 5 years of retirement, by working 2 days a week at my old salary, while collecting my pension. The bad thing was that I couldn't shelter any of it in a 401K, although I could put some in a traditional IRA.

Just saw this post on CNBC suggesting you should shoot for $3M by age 50 by merely investing $5k per month from age 22 - 50.

https://www.cnbc.com/2021/03/19/retire-by-50-how-much-you-need-to-invest-to-save-3-million-.html

I’m sorry, but are the NYC journalists at CNBC woefully out of touch, or just incredibly overpaid?

Nevermind, student loan payments, housing, living expenses, getting married and having a family, etc., do kids coming out of school now have incomes that can support putting away $5k per month or $60,000 per year. Presumably some of that would be after tax as 401(k)s and IRAs have limits.

What am I missing?

oh, we have a new game!

What was your starting salary many moons ago vs. the salary just pre-FIRE. In my case 11X plus some bonus/commission $. I'm still working (for fun), but now my base salary is a lot lower, only 3.5X my mega-corp salary from so long ago.