Replies

What you say about saving a percentage of your income and then investing over the long term is true. We would only quibble on the 25%. Even saving 10% of your income (over a 40 year working career) and investing it should make you a millionaire by 60.

Saving 25% of your income for retirement would be fantastic of course but just too much of a stretch for most people who have mortgages to pay and kids to raise.

Not that saving a million in some 401k will guarantee you a comfortable requirement. The most you should take out of an IRA at retirement is about 4% a year. So a million dollars even would allow you to comfortably take out $40,000 the first year of retirement (with the theory that the remaining $960,000 will regain some of the original value over that year through investment choices).

Coupled with Social Security, most people can make that work but it will still be a retirement of clipping coupons and going to the matinee shows and early-bird specials, as opposed to the mythologized retirement of golfing all day and walking the sunny beaches in some tropical paradise.