Wealth Accumulation

[Montecfo]

I instinctively knew about "The Nest Egg Principle" even before watching the movie "Lost in America". Heh heh heh...

Thanks for that. I think I referenced that some time ago . Now I (and you) know that at least one other person remembers.

 

[NW-Bound]

I linked the relevant clip from that movie in a post on another thread about running out of money, which was exactly what the couple in the movie did.

https://www.early-retirement.org/fo...ut-of-later-in-life-118814-2.html#post2968474

 

[PatrickA5]

Worked full time while attending night school. Took 7 looong years to graduate. It was a private (expensive) school, but my company paid for 75%. Lost that job during the oil bust of the mid-80s.

Got married in early 20's and between paying for college, unemployed, and basically living well above our means, we managed to have a negative net worth of around $30K by age 30. I was taking cash advances to make minimum credit card payments on other cards. Didn't own a house. Two extremely old and unreliable vehicles. And, a new child. Our late 20's and early 30's were the low financially. I thought about bankruptcy, but never pulled the trigger.

Both DW and I had good jobs through our 30's, 40's and (for her) 50's. Saved a lot in our 401ks/IRAs. DW did well with some stock grants when her company got bought out. We saved a lot and spent a lot - mainly on our 3 kids. It wasn't until this year that we got any kind of inheritance, which we'll probably end up giving to the kids over the next 5 years or so.

So, all-in-all, not too bad. Could have ended up with a lot more money than we have, but we didn't sacrifice too much during our working years either. Best financial moves were staying married and fortunately not losing our jobs through most of our working years.

 

[tryan]

I'm genuinely curious how a divorce could cost 80% of net worth, when I would think that it should top out around 50%+ costs.

Mine at 55 yo was a 60/40 split AFTER TAX (all assets real estate) ... 15% tax on long term gains meant it was basically 75/25 with no alimony after 23 years.

Can't make this stuff up!

 

[Cayman]

What about becoming a gold digger and acquiring wealth that way?

I'm not posting a link here, but brings to mind Kanye's Gold Digger.

She takes my money when I'm in need
Yeah, she's a triflin' friend indeed
Oh, she's a gold digger.... way over town... that digs on me.

 

[Koolau]

Mine at 55 yo was a 60/40 split AFTER TAX (all assets real estate) ... 15% tax on long term gains meant it was basically 75/25 with no alimony after 23 years.

Can't make this stuff up!

DId you have a female judge? I've heard that the judge is the single biggest factor in these things - but I've only heard it - not experienced it, thank goodness!

 

[monte1022]

[/B]

Yep, same thought same action. I have been keeping my eyes open for a different truck but not willing to pay the price for a new one. Used ones are way over inflated also. I now am looking at trucks with over 150K on them in hopes of finding me one that will last me another 4 to 5 years.

That frugal disease never gets better. Lol No medicine will cure it.

I recently had a dealer "work up" a trade for my 2012 Tundra DC SR5 140k miles to a 2021 Tacoma Sport 14k miles. They wanted my truck and 30k. I did not trade.

 

[tryan]

DId you have a female judge? I've heard that the judge is the single biggest factor in these things - but I've only heard it - not experienced it, thank goodness!

No ... had a fool for a lawyer. She had a female "bulldog" lawyer; I had the golden retriever puppy . Never got to the judge settled in arbitration

 

[HenryD]

I lost 50% of assets, paid her college tuition out of my half, and incurred an alimony liability of about 30% of prior joint NW. In my first month post-divorce, my NW was down 83%. Alimony was an annuity for her, unsecured debt for me. The proposed amount plus child support was more than 40% of my gross in my best year. Had to stretch the payments out to qualify for a mortgage.

We were living in a county with a lot of deadbeat dads. My lawyer told me that was a big factor in the attitude of the judges. I was self-employed at the time and I think they were upset that they couldn't garner wages. I never underpaid or was ever late.

 

[Koolau]

I lost 50% of assets, paid her college tuition out of my half, and incurred an alimony liability of about 30% of prior joint NW. In my first month post-divorce, my NW was down 83%. Alimony was an annuity for her, unsecured debt for me. The proposed amount plus child support was more than 40% of my gross in my best year. Had to stretch the payments out to qualify for a mortgage.

We were living in a county with a lot of deadbeat dads. My lawyer told me that was a big factor in the attitude of the judges. I was self-employed at the time and I think they were upset that they couldn't garner wages. I never underpaid or was ever late.

I'm so glad I've stayed married to my first (and only) love. Not only is it less stressful but much better for FIRE. Sorry you had such a rough divorce.

 

[HenryD]

I'm so glad I've stayed married to my first (and only) love. Not only is it less stressful but much better for FIRE. Sorry you had such a rough divorce.

Good for you! It took me two attempts to find the one. My ex is also doing much better spiritually now we are apart. I'm so much happier now. I like to think that stress reduction and diet improvement will add more years to my healthspan than the FIRE delay took away

 

[NW-Bound]

Out of 45 million retirement accounts at Fidelity, there are 378K 401k accounts and 307.6K IRA with a $1M+ balance.

The average account balance is $113.8K. Excluding younger people, among the boomers the average balance is nearly $500K.

It looks like people who know to save are doing reasonably well.

Source: https://finance.yahoo.com/news/more-americans-are-now-401k-millionaires-123138990.html

 

[LateToFIRE]

Out of 45 million retirement accounts at Fidelity, there are 378K 401k accounts and 307.6K IRA with a $1M+ balance.

The average account balance is $113.8K. Excluding younger people, among the boomers the average balance is nearly $500K.

It looks like people who know to save are doing reasonably well.

Source: https://finance.yahoo.com/news/more-americans-are-now-401k-millionaires-123138990.html

Isn't there a bit of selection bias at work in those numbers - it doesn't tell us much about those boomers who don't even have retirement accounts. Also, averages for this sort of stat tend to be skewed by large outliers - median would be more telling.

 

[NW-Bound]

Surely, I would like to see the median numbers too. And of course, there are people with no savings or retirement accounts at all.

The reported numbers do not look bad, considering that there are 157 million workers in the US and that Fidelity with 45 million accounts does not handle all the retirement accounts in the US.

If you have a 7-figure or high 6-figure account, feel assured that you are so unique.

 

[Car-Guy]

Out of 45 million retirement accounts at Fidelity, there are 378K 401k accounts and 307.6K IRA with a $1M+ balance.

The average account balance is $113.8K. Excluding younger people, among the boomers the average balance is nearly $500K.

It looks like people who know to save are doing reasonably well.

Source: https://finance.yahoo.com/news/more-americans-are-now-401k-millionaires-123138990.html

Actually, I'm surprised the numbers are so low. So a little over 1.5% of all their retirement accounts have a 1m+ balance. Just seems low.

 

[NW-Bound]

Actually, I'm surprised the numbers are so low. So a little over 1.5% of all their retirement accounts have a 1m+ balance. Just seems low.

Many have money outside their retirement accounts, or in their small businesses. Some may have money in real estate, etc... Not all work at megacorps or for the government.

I used to have more money outside of retirement accounts, but spent it down quite a bit while waiting for 59-1/2, and paying for private health insurance too. When you draw $100K/year, you drain it quickly.

 

[Car-Guy]

^^^^
I guess so... Needs to come up a lot to reach the ~7 to ~8% I keep reading about. (Depending on the articles)

 

[NW-Bound]

^^^^
I guess so... Needs to come up a lot to reach the ~7 to ~8% I keep reading about.

7 or 8% of the population with $1M?

If so, then they must be talking about net worth, which includes their homes. Many Californians get there with just their home.

 

[Car-Guy]

Probably true....

 

[Koolau]

Actually, I'm surprised the numbers are so low. So a little over 1.5% of all their retirement accounts have a 1m+ balance. Just seems low.

I would be curious how that compares to the other "big houses" like Vanguard. Because Megacorp stock has been on a tear, I would now be one of those over a mil in V. YMMV

 

[Car-Guy]

I would be curious how that compares to the other "big houses" like Vanguard. Because Megacorp stock has been on a tear,

I was wondering the same thing. I'm sure the info is "out there" but I'm not that curious.

 

[athena53]

DId you have a female judge? I've heard that the judge is the single biggest factor in these things - but I've only heard it - not experienced it, thank goodness!

My lawyer warned me that since male judges are used to seeing ex-husbands sucked dry by divorce, if I got a male judge he might jump at the chance to award alimony to my Ex. (Ex was a brilliant inorganic chemist but had lost a job he loved and never found another company that appreciated his genius and was unemployed the last 5 years of the marriage.)

Fortunately we negotiated a settlement that the court accepted. No alimony, no child support for me in return for allowing me to keep investments that were in my name. I've since read that that's unusual because it left me with sole responsibility and what if I resorted to taxpayer-supported programs if I ran out of money? Didn't happen and I know my Ex wouldn't have paid a cent.

We've gone a little OT with the divorce angle but it certainly has affected the finances of many of us. Fortunately in my case things steadily improved.

 

[Koolau]

I was wondering the same thing. I'm sure the info is "out there" but I'm not that curious.

Heh, heh, I was thinking the same thing. I'm curious - but just not curious enough to try to find the answer. Call me lazy and I won't object. (I call myself "unmotivated" - it has a nicer ring to it.)

Usually, someone here knows how to tease out the info if THEY are interested. That's part of what I love about this Forum. We have so many experts on so many subjects. Just about anything of interest is explored at one time or another.

 

[dunkelblau]

Surely, I would like to see the median numbers too. And of course, there are people with no savings or retirement accounts at all.

The reported numbers do not look bad, considering that there are 157 million workers in the US and that Fidelity with 45 million accounts does not handle all the retirement accounts in the US.

If you have a 7-figure or high 6-figure account, feel assured that you are so unique.

Those Fidelity numbers seem low, maybe because they're per-account and many households have multiple retirement accounts? The Fed 2019 SCF shows the mean is 255k vs the median of 65k among the 50.6% of families who have retirement accounts as of 2019. If you change the "Distribute by" from All families to Age of reference person, the mean for 55-64 is 408k vs a median of 134k among the 54.5% holding.

 

[jollystomper]

The reported numbers do not look bad, considering that there are 157 million workers in the US and that Fidelity with 45 million accounts does not handle all the retirement accounts in the US.

It might not take into account those (like me) with multiple retirement accounts at Fidelity. It is possible those 45 million accounts are from less than half that number of people.