OUR LIFE IN 3D

The Home of Daddy's Day Dare! ~ I am just trying to stay above water

Tight-Wad Tuesdays ~ The Average Person Has This Much Saved in a 401(k) — How Do You Compare?

The Average American Has This Much Saved in a 401(k) — How Do You Compare?.

I know I haven’t done a Tight-Wad Tuesdays post in like, years, but Personal Finance is still dear to my heart. (I just prepared a year ending financial report card for my family New Years day ~I am such a nerd).

I ran across this easy to read article today (its has pictures!) by the Motley Fool on doing a report card on your 401K’s. And while it is a Thursday I still thought I might lob a Tight Wad post out to help educate, enrich or inform. …or bore

Of course, a big part of YOUR family’s financial report card isn’t savings per se, but also resources built up for your retirement programs sponsored by your employer and to some degree, your bank.

FREE MONEY!

That is what a 401K is, Free Money, if an employer matches your contributions, dollar for dollar. It is free money in YOUR pocket. (sorry, does anyone like the sound of that as much as I do?) Then you should ind some good or reliable mutual funds to invest your hard earned money in and watch that free money grow! It is one way to pad your nest egg as you head towards your days of not working any more.

vacation 2But 401k’s are not enough. As an ex-financial adviser I can tell you, you need more than money being saved in a 401k to live a standard of living you are used to in retirement. I mean a 401k contribution is what, 4% or 5% of your annual wages in most cases? Coupled with the employer’s match its maybe close 10% of what your check was last week. Is 10% of that paycheck what you want to live off of when you finally have the time to LIVE and travel and spoil your grandkids?

The Beverly Hills Housewives type wedding for your grands

The Beverly Hills Housewives type wedding for your grands

That’s where a few good DRIPs (Dividend Reinvestment Plans) can come in handy to add a lot of value and cash flow to your nest egg. Contributing to a DRIP account regularly in small amounts is a safe, slow and steady way to build wealth over time, with guaranteed growth through reinvested dividends.

dripWhen you retire simply chose to accept the quarterly dividends as cash payouts instead of reinvesting them. And if you begin funding a DRIP account when you are younger instead of older that quarterly dividend will be larger than that of what your employer generously gives you matching your 401K contribution right now.

So how do YOU want to live in your retirement?

vacation 3

Your 401K may not be enough. Check out this easy read by the Motley Fool and see how your 401K stacks up to those of your peers saving. Their graphs are broken down by ‘savings per age’ and ‘savings per income’ using simple Medians (average) and Mode (most common) illustrations.Fooltmf234x60_13001

All you have to do is know how much you and / or your household has it its 401k balances right now.

The Average American Has This Much Saved in a 401(k) — How Do You Compare?.

Do you know?

Do you trust that your balances will magically be enough?

MS-Nest Egg

If you have any questions or concerns or ideas about your savings plans, just ask. I don’t need to know how much, or where, or even get paid. (its just nice to know I got you seriously thinking about it) I just need to know your goals and how you feel about risk in your investments.

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6 thoughts on “Tight-Wad Tuesdays ~ The Average Person Has This Much Saved in a 401(k) — How Do You Compare?

  1. I’m so screwed Andy! LOL

    Used to be a financial planner? Why’d you stop?

    Diana xo

    • Yes, I wanted to get into the financial planning business as a way to get out of the 24/7 restaurant business. I really enjoyed the investing business as a hobby at that point. I went back to grad school to further my business acumen but when I made the jump to Morgan Stanley it was like 2002 and the markets were crashing. Morgan Stanley didn’t make their money doing trades back then but ‘managing’ money and my goal was to go ‘acquire new assets’. Well when the markets are tanking nobody wants to turn over their life savings to a brand new advisor, no matter how much charm I laid on them. I learned a lot about researching stocks and mutual funds and more of the complex business of Futures. So now I just try to peddle my knowledge or advice to anyone that will listen. Is there any questions I can help you with to start padding golden years Diana? Thanks for adding in here! I know its a dry subject…to some.. πŸ™‚

      • Too bad it didn’t work out for you Andy, but so generous of you to continue helping folks!

        I just need to start making a reasonable income before I think about investments. It may mean getting a regular job again and putting my little company on the back burner. πŸ˜€

  2. I used to be very good at saving, until I started to spend so much in videogames πŸ˜›

    “Nobody wants to turn over their life savings to a brand new advisor”, my impression is that those who do really well have contacts from other activities or social position, or just fool people around.

    If I ever get a small fortune, I will let you invest some πŸ™‚

  3. Loved this! Interesting read.

    • I am glad you like it! I have a series of about 3 posts on how to start a Drip and how to chose a good company to BNH. Did you see the $219,000 question in those posts? The question would be a great way to get your readers attention to invest. Keep up your good work!

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