Quote:
Originally Posted by The Yen Man
Maybe not for the first 10 years, but that compounds pretty quickly. By year 20, you're contributing about $30K for the year. In year 30, you are contributing almost $80K for that one year.
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Ya, it certainly climbs pretty high, but we're also starting off with a relatively small amount here. It's also factoring in inflation at 3%, which means that the $80k years are more like $40k....which is a lot to sock away in your 30's for people but closer to possible when the mortgage and kids are gone.
The other factor here is that some people are going to come to a crushing realization at some point: they didn't save enough, early enough. There are only a few ways to rectify that. Save more money, work longer, get a better return, or retire on less money.
I've taken the "get a better return" out here. I based this on the historical performance of the market since 1900 and used the median value. So its pretty clear...either sock away some extra cash now, retire later or retire on less.