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Comment by ams6110 | Hacker News Reader

If you save 10% of your income from your early 20s to 65 you should be quite well set, presuming your expenses drop after retirement (kids are supporting themselves, house is paid off or you downsize to a lower cost smaller residence). If you can save a little more than 10% even better.

Problem is most people don't really think about it until they're in their mid 30s at earliest. When you are in your 20s or early 30s and have young kids so many things seem like more important priorities. And most people in their 20s can't even really conceptualize retirement. It seems impossibly far away, time-wise. But missing that first 15 years has a huge impact on the total compounding potential. If you start saving at 35 you have to save a lot more.

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It's amusing to me that people in the tech community think they will get to work that long.

Look around your office. Do you see anyone over 40? No? Are you saving enough to retire at 40? Then what do you think is going to happen?

EDIT: I will point out that this comment has fluctuated quite a bit between +2 and -2. So, clearly some very different experiences, which is good to hear. Perhaps not as dire as it looks.

By this logic, there must be millions of unemployable past-40 software engineers out on the streets. Or maybe the simpler explanation: Our industry has been growing exponentially for two decades and the cohorts that are past 40 are small compared to the ones that came later.

Further, the "look around your office" result varies wildly from office to office. Looking around your average SV startup will skew to gullible, er, I mean risk-tolerant mid-20s engineers. My office is more than half composed of experienced engineers in their mid 30s and up who know their market rate.

Well, not millions. The unemployment rate for software engineers is nearly double for 55+ year olds compared to younger workers [0]. Still, I guess at "only" 9.6% it's not so bad.

http://www.computerworld.com/article/2512708/it-industry/rec...

Since those stats aren't for software engineers, it would be enlightening if there was a breakout of the IT workers who couldn't find jobs to see how much of the more-affected population was some variation of manager or pseudo-manager, as those roles tend to skew older and are also the roles that (anecdotally at least) I saw less hiring of. When I think back to the people I'd worked with who had trouble finding their next gigs during the recession, 100% of them were some variation of PM, scrum master, and so on. Almost universally their resumes/LinkedIn profiles had very vague descriptions of what it was they did for the 5+ years leading up to the recession. There may be a lesson in that as well.

Those figures count just a subset of the U-3 unemployment rate, which is itself a subset of the true (U-6) unemployment rate. Anyone counted as long-term unemployed is omitted from those counts.

I see many people over 40. I have co-workers with children my age.

Perhaps if you move, you'll find a more respectful and receptive environment for those who are seasoned.

Look around your office. Do you see anyone over 40? No?

Yes. A couple people on my team now, most of management (including our immediate supervisor, who just recently moved up from being a normal team member), whoever's in the cubes I saw those black "40" balloons on, the people who first built some of the corporate systems (well, the ones who haven't retired yet), etc.

Tech is a growing field. How big was it in 1995, compared to today? That's a decent approximation of what ratio of over 40 / under 40 you'd expect, assuming career changes aren't common enough to mess up the numbers too badly.

Things are a lot better in the real world, but I hear the Valley is pretty much Logan's Run. Which, if you get the reference, means you're probably too old to work in Silicon Valley.

I'm 40. My test engineer and lead developer are older than me. My director and VP are older. My team has two developers and one web designer who are younger than me.

But, this is a large enterprise software company on the East Coast.

54 here. Will work until drop dead.

> Look around your office. Do you see anyone over 40? No?

I don't see many people under 40 in my office.

Of course, even though my job is tech, the industry isn't (and it's even farther from being a silicon valley startup.)

In my worgroup of 7 engineers in your successful high-tech company, there's on employee younger than 40.

  Look around your office. Do you see anyone over 40?

Perhaps a more useful perspective is:

Look at the "careers" or "about us" pages for the tech company of your choice -- look for the group pictures of smiling faces. How many people do you see over age 40?

It cracks me up when such companies boast about how "diverse" they are, then show a group photo that is 70+% male. 80%+ white and asian, and 90% below age 40.

Yes I do.

I have a couple of 80 year olds in my office, do they count as two 40 year olds?

And most people in their 20s can't even really conceptualize retirement. It seems impossibly far away, time-wise. But missing that first 15 years has a huge impact on the total compounding potential.

30 year treasuries are currently yielding 3%. You could get 4% in a less tax favored safe investment. Inflation is between 1 and 2%.

Let's see what that does for that cash saved in your 20s. Suppose you earn a quarter as much in your 20s as in your 40s (most have a higher salary growth ratio than that). Then figure on 20 years of 4% growth, or 2.5% after inflation. 2.5% compounded for 20 years is 64%. So your savings in your 20s ultimately add only 2/5 as much as your savings in your 40s. It's not nothing, but it's hardly the essential key to retirement to start early. You'll be fine starting at 40.

And 10% is nowhere near enough. That's essentially hoping that Paul Ryan doesn't get to undercut Social Security because that's what you're going to be living on. You need to save about 30% of pre-tax pay and invest carefully from age 21. Or 35% if you start soon after age 35. That's to retire in your early sixties. You also have to pay taxes, so figure on 40% or so of your paycheck for take home pay.

Do you know anyone doing that? We're going to have a crisis on our hands, I predict.

You don't save for retirement with treasuries in your 20s. You put it in index funds.

"You could get 4% in a less tax favored safe investment."

And hope you're investing at the right times:

http://www.nytimes.com/interactive/2011/01/02/business/20110...

You don't hope. You invest continuously throughout your working life and smooth out some, but not all, of those bumps. More importantly, though, you hope you retire at the right times (large market losses early in retirement are dangerous). But you work around that by building in flexibility into your retirement draw - in a bad year, you cut back and spend a bit less.

> More importantly, though, you hope you retire at the right times

Hope has nothing to do with it, 10 or 15 years before you plan to retire you start liquidating equities and going into bonds and treasuries. If the market is at a low point you hold off on equities until the market rises again.

If you go much under 50% equities, you substantially reduce the percentage of your wealth you can draw on for living expenses.

For more: https://pressroom.vanguard.com/nonindexed/2013.10.23_A_more_...

How do you know that "the market is at a low point"?. And more importantly, how do you know that the "market will rise again" ?

I think he means you determine if "the market is at a low point" by comparing to the recent past. For instance, today, I can tell the market is at a high point. It might be a good time to rebalance from stocks to bonds today if that's something I'm looking to do.

That the market will rise again has held in the past in the U.S., so it's not so unreasonable to suspect it will in the future.

If the stock market crashes and never recovers we are all fucked. Buy guns and bullets in that case.

Over 30 year timelines? No you don't have to worry about timing the market.

This is not quite right, as I see it. If you save 10% of your income, you need to work 51 years to get to a safe amount of money for retirement (25x your annual expenses). If you start at 20, that puts you at 71 years old.

Note: This math assumes you're going to earn ~5% in the invested savings each year (after inflation), and that you can withdraw 4% of your invested sum each year in retirement.

You're not going to earn 5% after inflation. Maybe 2.5%. But retiring at 71, you can withdraw a lot more than 4% per annum, also. Maybe try a new set of assumptions.

Merely keeping up with inflation has been tough since about 2007.

US inflation adjusted short term bonds and notes have occasionally carried zero and even negative interest rates over the past decade.

The annualized returns for the past decade (which includes the 2nd worst recession in American history) in the S&P500 was 6.95%. I'm not sure where you're getting this 2.5% figure?

And given this 2.5% figure, how can you suddenly withdraw MORE money than 4%? If you can't earn 4% reliably, withdrawing over 4% puts you at risk of running out of money unless you know at what age you will die (unlikely).

That's a very pessimistic view of the economy. Why do you expect the future to be so much worse than the past? The S&P 500 has averaged 7%/year (after inflation) over the past 80+ years.

Current 30 year bond rates and the performance of stocks in the 21st century are significantly less lucrative than in previous decades.

The end of exponential population growth as the Earth has already filled beyond its carrying capacity predictably eliminates all sources of growth except productivity growth. Previous generations could depend on a population and resource extraction growth boost of 2-5% per year, but that will pull back to negative drag as population of first world peoples shrinks and affordable oil production drags. That 7% growth is now equivalent to 2% in the conditions today's people will retire into.

> Current 30 year bond rates and the performance of stocks in the 21st century are significantly less lucrative than in previous decades.

I'm just eyeballing this, but after adjusting for inflation neither recent stock nor bond yields look out of the ordinary, historically speaking.

There are always reasons to expect growth to go down, and other reasons to expect it to go up. It isn't clear to me why cherrypicking solely from the former group is supposed to be convincing.

i am in my mid 20s. I never got enough money to pay all of my monthly food and rent. So no, i did not saved before. And i am still not saving.

Retirement and all is great, but living for another day trump it. This is the life of most of people my age.

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