Average Retirement Savings by Age 40 -Time to Get Serious

This video discusses the average retirement savings by age 40 - three different ways. First the average savings among "savers" - people who actively put money aside for their future. Next I add in "non savers" to show you where you stand among ALL 40 year olds (hint 81% of Americans never save for retirement). Finally I show you where you SHOULD BE if you want to retire in great comfort.

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Disclaimer: this video is for educational and entertainment purposes only and is not meant to be a substitute for legal, accounting, tax, or professional advice. If you have any specific questions about any legal, accounting, tax or other professional service matter you should consult the appropriate professional services provider.

[SurpriseMeJT]

At 40, (2 years ago) I had 220k and he's right, I stayed at home for well into my 30's. I still paid some rent and travelled. I don't regret it one bit, because my retirement is pretty much taken care of. Owning property and being in frivolous relationships can be a real waste of money. Now I can almost tell any future employer to get lost, or negotiate for a better salary.

[ehderguyyashootadeerorno]

1) Your kids can take out student loans, you cant take out retirement loans. 2) second home, maybe your retirement is more important than a second home. 3) new car, if your retirement is that far behind you should buy a beater and save. Be smart with your money, and save as much as you can young.

[dr.zshealthnetwork]

great video!! hope to see the next video on how to catch up soon.

[george-nggj]

40yo with 1M cash/liquid investments, 1M retirement and a paid off $700K home. Still not feeling like I’m saving enough.

[samspraguefinanceformula]

Nice breakdown. Start early for that compound interest

[thorpower]

At 40 I was only had 800 hundred in my savings lol now that have 70k and my assets have skyrocketed, got rid of the poor mindset, looking to put that 70k back to work.

[mikeyfoofoo]

Thanks for the practical breakdown. I try and tell my new full-time employees the value of saving for retirement even if they start small. So many articles and videos set expectations as if everyone is a trust fund kid. I think it's off-putting for some people that need to get on it. Getting serious (at any age) is a great way of putting it. -- On another note can you break down how a defined benefit like a pension plan fits in to your retirement calculus?

[stuartclubb]

"have to pay for the second home".
"have to buy a new car."
"or someone that had a big trust fund"
LOL. Good ones

Americans clearly don't have money for retirement because they don't save for retirement.

Over 15 years (age 25 to 40), (at 8%) you need put $9750 a year, or ~$375 a paycheck (if you're paid every two weeks) into a 401k to hit that $290K number. A lot of 401k's involve a 3% match and received advice is to put 15% of gross away to retirement, so if you put in 15% and your company puts in 3%, you need to make more than around $54K a year to make that happen. If you are single and make $54K a year, you're probably in the 22% federal tax bracket, and maybe the 8% rate if you live in California for a marginal tax rate of 30%. That means when you put ~$300 a paycheck and your employer puts in ~$60, you'll only really see a drop in your takehome paycheck of $210. Sure, that's real money, but here's the kicker.

$9360 a year to your 401k for 15 years at 8% = $283K.

Now the fun part: You keep doing that until you're 60 and decide "screw it, I'm done" and end up with $1.75M so you take about $80K to $100K a year (remember you only made $54K when working and now you don't need to save for retirement) and bridge to 65 to get medicare and probably wait until you're 70 to take a nice fat social security check as well. Might even quit earlier because you can.

Or don't.

[legitKwit]

Have your kids early so your an empty nester in your early to mid 40’s. You still have a lot of energy left to work and save. I didn’t realize it at the time but it was a great economic move. I didn’t get serious about retirement saving until around the age of 35. I’m 46 now and the kids are 21 and 19 and on their way. I’m saving 50-60% of my income now. Drive a 10 year old Subaru and live a very modest lifestyle. I shop at good will and clip coupons.

[nickfarness]

My wife and I are both 40, have a combined total of $530, 000 saved for retirement. We contribute $2700 a month combined in our 401k and max out 1 Roth IRA. Every time we get a raise we up the accounts. My parents live off of just social security and I don’t want that to be us! We would like to retire at 60. Think this will be possible?

[etheldingleberry]

Sometimes he says “four-year-old” and other times “forty-year-old.” Very confusing.

[travisg]

Uneducated 40 year old, time to get serious on my casino game! Only way to reach retirement if you don't have a college degree. I'm working towards it! Under 40, i half-assed my effort to win at blackjack and allowed the casino to take my money, even though nearly every visit I could've walked away with a win, but stayed too long or I let other people at the table working for the casinos benefit to take it. About 70 percent of players who sit at the table are working for casinos benefit with their game play.

[straywolf]

And then the stock market tanks....and good-bye 401K