The Good And The Bad

As of September 30, 2017, how much money did Americans have in their (401)k accounts? Cue Final Jeopardy Music…what is $5.3 trillion?

Same date, what was the median balance in those 401(k) accounts? The median is the value in the middle of the distribution and is not the same as the mean, or average. The answer is $24,713.

That last fact is disturbing. Most financial advisors recommend withdrawing 3-4% of your retirement account each year while in retirement. That figure is calculated so it is not likely a person will outlive their money. Three to four percent of $24,713 is $741-$989 a year. Do you know anyone who can live on that?

Yes, I realize that many people have assets outside of their 401(k). Still, the truth is many Americans don’t plan. You know the old saying, no one plans to fail they just fail to plan.

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2 thoughts on “The Good And The Bad

  1. In elementary school, I was read the story of the grasshopper and the ant. Over the past fifteen years at least, we the people have been told that Social Security will not be available. If folks have not taken heed, that is on them.

    I once thought of leaving my job; the company brought in a financial planner who explained that to make up what my company’s pension will provide, I would have to have $2.5-3 million in the bank, not to mention the 401K benefits. I have decided to stay.

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    1. In theory letting people have more control over their retirement is a good thing. In reality it hasn’t really worked that way because people seem unwilling/unable to save and they have no idea how to invest.

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