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A 25-year-old who starts saving $50 a month would have $72,000 at 65, almost twice as much as someone who starts saving $100 a month at 45. http://on.wsj.com/Siu45R

When did you start saving for retirement?
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36 comments
 
"I hate these graphs," said a 41-year-old dude.
 
What I want to know is where this person found an investment with 8% return.
 
What would $72,000 be worth at age 65? That is not a lot to retire on.
 
That's exactly what I was thinking +wayne clark.  Not to mention, tons of people have had their retirement savings wiped out over the past few economic sh*tshows.
 
Why save when the politicians will figure out some reason they have to take it from you & give it to someone else! They just can't spending...
 
The question is, how are unemployed 25 year olds living with their parents going to come up with 50 bucks a month? 
 
If you're only saving $50/month for retirement, you are going to be in trouble and a dependant of the federal government. 
 
With declinning wages how can many save much more than $50 especially if your feeding children. Food inflation is a big deal fir most people.
 
As soon as you start working.  Because you never know that the wages in the future.  Live within your means.
 
Ah yes, because past investment performance determines future investment performance. Right?
 
I rolled 7 k into company 401k in 1991, its now at 750 K. Maxed out match but also hit a few 4 baggers in smba . devil bush actually wanted people to have a choice with social security, I guess most folks are to dumb left up to their decisions,
 
I preach this all the time to my tax clients. time is your best friend when you're young, and your worst enemy the closer you get to retirement
 
I don't need to save; uncle Sam has my back. When I reach 97 I will be eligible for social security. It will be 52 dollars a month. thanks can kickers
 
+Ben Bucher its a self managed brokerage account. Instead of your 401 k going to vanguard sp500, fidelity Magellan , etc. You can put into a 401 k brokerage account. Buy whatever you want outside of options futures etc gives person more choice of investments. You can do well like I did or lose your jazz!
 
I am aware that I will be broke/poverty level for my life. It does not matter how much you save...... something always breaks. 
 
+wayne clark this graph just demos the power of saving not stating $72,000 would be ideal to retire on 
 
I had an idea last week. Save 50 dollars a week for 1 year. And buy a plane ticket out of here.
 
+david greifzu commrad Dave please pay your exit tax before you leave, +Leah Griffith Leah, you are living in the heartland of dear leaders utopia, please look for a job, they are everywhere so abundant , otherwise just apply for some student aid or foods stamps, hope mom and dad still have home.just in case so sad , my young children have to deal with this mess
 
If a 25 year old saves $500 a month every month for the next forty years with a 6% annual return each year, that person is a millionaire by 65. But that's a wildly optimistic scenario in an era of largely stagnant or falling wages, rising headline inflation, and equities markets that are two steps back, one step forward. Throw in a kid of two and life's bumps in the road, and the median wage earner is unlikely to contribute consistently at this level, if they were ever able to reach it to begin with.

That $72,000 could easily be consumed by one medical problem. My generation is going to be completely screwed in retirement. 
 
Can't afford to save for retirement. Every penny I make goes out the door at the beginning of the next month. I'm lucky to make my bills. I haven't had any form of entertainment for a year now. Got rid of DirecTV and home phone just to make sure that I can have electricity and what did they do? Raise the rates. Depression IS Real. 
 
Seriously. Where are you gonna get an 8% return every single year for 40 years?
 
This is probably more true for money managers who will make the savings "work".
 
+Gorsht Puterman  Since the 50s, the S&P 500 has historically averaged around that figure. But an average is just that, an average, some years will do better than the average, others worse, sometimes by substantial margins on both enda. 

The 50s were the best decade in terms of annual returns on the S&P. As the years pass, performance metrics from these times are no longer informative for current investors - those who invested in those decades are dying or dead. With each passing day, a larger proportion of the current investor class has only the "lost decade" of the 2000s as its only investment decade. There is almost no chance a typical buy and hold investor 35 or younger will see an average 8% year over year return in something vanilla like the S&P. Too many years of poor performance have gone by and there is no cause to believe a real, inflation adjusted boom is in our future.
 
Savers...bah...screwing with aggregate demand...
 
More important than continuing to rely blindly on a traditional stock-and-bond approach to investing for retirement (which have provided investors with a rude awakening in the last decade or so), investors have to really take charge of their portfolios and learn about alternative investments as well. The world is not just made up of stocks, bonds, and cash, as Wall Street would like you to believe. There are a lot of other options out there. More important than a 25 or 45-year-old saving $X a month until retirement is allocating the $X into quality investments based on a risk-adjusted basis. Investors, wake up from your Wall-Street-induced slumber!
 
Marketing investments are complicated for the average person and some in the financial world. Its like a gamble. What happens if you retire in a year that the market crashes. That is why its important to have a difined benefit pension. Now wallstreet takea our money and invest in these complicated instruments that they dont fully understand and we are the losers and they get paid millions either way. Its criminal, or should be but the system is rigged in their favor.
 
If you are saving in US dollar, it is useless, but if you are saving in gold, for sure it is useful, gold price doesn't change against the goods price
 
+Rendra pramudya, I agree that gold is a good alternative, but it's just one alternative. There are many; and even when you invest in gold, you want to do so at an attractive price and not blindly. 
 
One question: Is the average earning rate 8% actually the result of adding the ever-present gains of few mighty investors with meager gains or losses of small people? Is it really applicable to any investor?
 
Everyone can save a little from someplace in their budget, the problem is people in my generation haven't respected the importance of it. Living paycheck to paycheck without an emergency fund, relying on credit cards to live beyond your means, is no way to live. 
 
+Hurol Aslan, they actually used a 5% annual return, which is the 8% they assumed as the long-term average annual return of the US stock market, minus 3% for inflation. Aside from the fact that this assumption incorrectly assumes that stocks are the only and best asset class, there is another serious flaw in it. They are ignoring the risk of an investor failing to achieve the stated goal due to market risk. Just look at what happened during the last decade to a lot of stock investors. They had to postpone their retirement and other financial goals due to extreme market volatility. It is a known historical fact (which traditional planners never mention) that stocks have had historical drawdowns of over 50% during multiple occasions. If an investor is caught in a down or sideways market as a result of large market drop, the returns won't be 8% a year.

Now, I don't disagree with the importance of saving. That part is crucial; but investors need to educate themselves by thinking outside the box when it comes to investing and different asset classes.
 
I think you are not considering Inflation and devaluation. 
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