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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.


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.

Tight-Wad Tuesday’s ~ What a surprise!

I was trying to think of some cheery way to start off a personal financial post for this Tight-Wad Tuesdays but my cold put up a wall of accessing warm-n-fuzzy land.

But THEN I got a little gift in the (e)mail from an new,blogger that made my day, Gull at The Magfiqueway. Check out the surprise: http://themagfiqueway.wordpress.com/2013/02/05/reader-appreciation-award-i-feel-blessed/ . She ‘smiles’ through her writing, is very likeable, open to everyone and a bit of a fashionista. OK, a BIG fashionista! Drop by and say Hello.

I’ve enjoyed this blogging world from meeting many new and interesting people. I’ve said this before. But it really tickles me when I can connect with someone from around the world; someone from a far-eign land, maybe different culture, different life yet we can still find things to make each other smile. Too cool! The world is a smaller place now and filled with great, interesting people that one ought to know, like you; and Ms. Gull! Thanks WordPress.

So did you guess what the $219,000 stood for? I was afraid it was too ambiguous but then outta nowhere Kelly (One Fit Momma), up in Canada, nabbed it. I mean she defined the answer word for word. It turns out she spent some time in the financial industry too, illustrating again that there is way more to a book then just the cover. Great job Kelly!

So, yes $291,000 is what you and your spouse will need just to eat in your retirement. 2 people x 3 meals a day x 20 years x 365 days / year x $5.00 / meal. Just to eat? What about other things in your retirement like utilities, medical, along with the things you’ve earned the right to do like travel and spoil those cute grand kids? How much will that take over time? And at tomorrow’s costs?

So does this make you think a little bit? Do you have a plan? Are you ready to make a plan?

The good news is that younger readers have lots of time to prepare.  If you are close to my age, you better have a plan in place.

How do you want to live your golden years?

Have you ever thought about this? On a budget or a lifestyle that you worked hard to earn? And people are living longer every year!

The good news is I am here to offer some suggestions to help you get started. It’s what I do, er, did. You can thank me later. There are several, easy, almost painless ways to build wealth for your style of living. It is up to you to commit to them.

But wait!

People say, I’m scared; I don’t know anything about investing, I’m afraid I’ll make a mistake; I don’t know where to start, I don’t have any money to get started. I’m not that smart.

If you know that $10 in sales is better than $7 you are equipped to do this. If you can divide $1.56 into $43.80 you have the technical know how to make a fortune (Dividend Yield). I think, if you are smart enough to write a coherent blog and disciplined enough to do it on a regular basis you will be fine. If you know how to do a little research online and have confidence in yourself you can do great things!

MS-Nest Egg

Simple plans to build for a comfy retirement nest egg:

  • 401k’s: simply this is free money. If you have one at work, enroll and put at least the % of your wages that your employer will match. FREE MONEY. Make a good salary or live below your means? Put another % or two in.  Over time this can be your best ally for a jet set retirement. But, a 401K (free money), by itself, is not all the answer. $219,000? Travel? Grand kids? You’ll need more!

Here and here are a couple of posts that discuss how your 401K can perform like the Dream Team. If you have funds in a 401K you want them to perform like LeBron, not Randy Moss. If you  have 15 minutes you can have yourself an All-Star team in your 401K

  • Dividend Reinvestment Plans (DRiPS): Simple, slow, painless, investing on auto pilot, where you don’t need a lot of $$ to get started and dividends build up over time and snowball into a great sums of money along with a comfy quarterly dividend in retirement.


DRIPS, I believe, are the easiest way to accumulate wealth. Again, the younger the better. We have several plans we are in now, so I am not just preaching. I have gone over them in detail in previous Tight Wad Tuesday posts here and here and ending up here. Any questions, I am here to help!

  • Regular contributions to an IRA at your bank or other financial institution. The key here is low cost investing and fees. If you have to pay more than 1.5% commission you are paying too much. DRIPS are far better at low cost investing.
  • Join an Investment Club: Invest with your friends! Google investment clubs in your area where people like yourself get together and learn about stocks and investing. Club’s often invest a little bit of money to get their feet wet but you can take those experiences, plus leverage everyone else’s research in the club, to make very qualified decisions on your own.Bivo-friends

You can invest a little bit of money with the club but put your new found knowledge to work for you at home. Investment clubs can be fun, you don’t necessarily need to be a nerd to join one. Don’t look at me! Simply joining others interested in being smart with their money and watching it grew a little (a lot). I ran an investment club in the 90’s with the likes of Air Force pilots, grad students and future Senators! We do look kinda nerdy, don’t we?


Does any of this make sense? Would you like to learn more?

Investing doesn’t have to be complicated with pyramid schemes or selling futures. Simple investing strategies include ‘Follow the Leader(s) (i.e. Wal-Mart, Apple), Dogs of the Dow or Value investing, and Dividend Investing where your risk and returns are minimized by regular quarterly dividends. These are easy steps that make sense, easy to research and follow. And whether you prefer to do some research on line or with the help of an investment club these strategies can work for you. I have a few links in my TWT header to get you started.


The catch? First you have to know what kind of investor you are?

Does investing make you lose sleep at night or do you feel confident in your good choices? What is your timetable before you need to access your savings? As you get older you typically move from an aggressive to somewhat conservative stance, not wishing to lose the empire that you built. Understanding what kind of risk you are willing to accept should be a place to start.

If you are interested, next Tuesday I will offer an Investor Risk survey used by Charles Schwab associates to map out what kind of investor you are. A  short few, simple questions will reveal what type of Warren Buffett you are deep down inside.

It’s your life. You are educated, have the initiative, and the good research skills to be good at this.

Don’t you deserve some $15.00 meals in your retirement, instead of $5.00 meals? Don’t you deserve to travel to see all those other great places and meet interesting people, like Gull and Kelly, from around the world when you finally have the time?

I think you deserve it. You just have to start somewhere / sometime.


Congratulations again Kelly and thanks to Gull for a wonderful Tuesday surprise!

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