Originally Posted by
MickintheHam
I hear this all the time. I politely say bunk. The problem is not making enough money. The problem is spending too much or spending it and not investing it. Anyone with the discipline to save 10% of their Gross Income can retire very nicely and at a young enough age to really enjoy it. Sometimes it means delayed gratification. Sometimes is means a smaller house or driving an older vehicle. The fact is, you may not be able to work into old age. Everyone needs a contingency plan for what they would do if they could no longer work. As individuals, we spend way too much money and invest too little.
The example I always use is if you put $5000 initially into an IRA invested into a S&P 500 fund and add as little as $2500 a year for 30 years, assuming the avg returns of the last 62 years, you would have about $550,000. That coupled with Social Security would yield about $52,000 per year to live and still leave a handsome nest egg for your heirs. Continue investing after 30 years and you would be living a nice life.
Contrary to your assertion the millennnials in this country have the best opportunity of any of us to grasp their own futures without hoping for a bunch of free stuff from the Government. Less than half of them are smart enough to make that choice. View the initial contribution the way you would a down payment on a house. Matter of fact, before buying a house come up with the $5k for the IRA. It is more important than buying a house. Is $2500 a year too much to save? How much do people save for a vacation?
Those that have a 401(k) plan with an employer contribution can have a much larger retirement benefit or take less risk in your investment choices. And not to get on my soap box too much, I would add a message to the Teachers in the Commonwealth's Retirement plan, your Union (KEA), lobbyists and their sponsor candidates, are selling your future down the river. Money in a state funded pension plan is much less secure than money in an IRA or 401(k). In addition the IRA money belongs to you and your heirs.