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Comment by gnicholas | Hacker News Reader

> Most have less than $20,000 but some have much more. The average account balance is $67,891

It is amazing that the median is under $20k and the average is nearly $70k. This means there are some folks with very large retirement savings that are pulling the average up a lot. Considering this only includes folks up to age 32, this is really surprising. How much do these savers have socked away?

Even when I worked in a big law firm, I didn't put that much in my retirement account because I was mostly saving to be able to buy a house (in the Bay Area). I can't imagine who these millennials are that have so much in a retirement account — presumably they also live in expensive areas if they are able to earn so much?

Edit: Glad to see all the responses, including from folks who have healthy retirement accounts. It would be great if you could share where you live and whether you have bought or are planning to buy a home.

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> I can't imagine who these millennials are that have so much in a retirement account — presumably they also live in expensive areas if they are able to earn so much?

Keep in mind ridiculous house prices are only in a handful of cities. The rest of the country exists and is doing just fine, thank you very much.

I live in Houston and made $75k right out of school as an IT consultant. I lived in the cheapest apartment I could find in my favorite Houston neighborhood -- a place with a lot of art and nightlife. Despite it being a happening place, it only cost $700/mo in 2012.

I was a big fan of the finance blogger Mr. Money Mustache and lived cheaply, on about $30k/yr. The rest of my salary went towards paying off my relatively low school debt, then I funneled it all to my Roth IRA, 401(k), and ESPP. After maxing that out, I bought taxable investments too.

My goal was to retire in my mid-30s after making an average developer salary. From 2012-2015, my net worth went from -$30k to $150k. It's still rising, but not as quickly because my fiance doesn't have the same crazy ideas about money that I do.

I bought a 3-bedroom townhouse in a nice neighborhood right near downtown. I can easily afford it and I'm not even making 6 figures yet.

Good reminder about home prices around the country — my perspective is certainly skewed by my background in biglaw, where top salaries only exist in expensive markets. In tech, things are different — especially for those who can work remotely.

Not sure about the US but in Europe most of the cities where good jobs are have daft house prices.

I'm assuming those are IB, Consulting grads at top undergrad business schools along with top undergrad engineers from the top 20. All three are raking in 100k+ starting at 22. Some of us also have parents who live close enough to major cities so saving on 1-2k a month on rent. There's a massive split in the millennial. There's a 0.1% who have parents rich enough that nothing matters, the 9.9% who are snapping up the competitive professional jobs and the 90% who are just trying to survive and start a career.

It was 10 years ago that I was 32, but at that point in time I had over $100K easily in my 401K. By the time I divorced three years ago, I had over $200K in there.

After the divorce, I have about $20K left after having to split it with my ex-wife, who had saved a grand total of $2.00 during our marriage.

I don't really have a point, except that some people are very good at saving, even from a young age, and some people will never save a penny. The key is starting young. As soon as you are able to contribute anything, even 1%, you get the advantage of compounding interest over time, which is the key.

Out of curiosity, where did you live? Did you buy a home?

San Diego, and yes, bought a home in 2006 (smart move!) before we got married. The mortgage, deed, title, everything was in my name only, as my ex-wife (girlfriend at the time) had shitty credit, and zero savings. The house was deeply underwater the entire marriage, up until we split in 2016, when it would maaaaybe break even money if I sold it. I was renting a tiny studio apartment at the time, while still paying the mortgage, plus child and spousal support. I decided to try to stay in the house, since I didn't have the $3000-$5000 it takes for security deposits to rent, and I was hoping that if I could hold onto it, the value would increase to a point where I might come out with some money. I can't afford it at all, but so far I have been able to piece together payments before going into foreclosure, so I guess that's a win.

The thing about divorce that I didn't realize is that making the decision to get divorced in the first place is the easiest and least painful of many choices you will need to make as a result.

How does that math work out? Why didn't you get at least half of it? Did you get full ownership of the house or something?

I’m surprised he ended up with anything. Divorces can be financially brutal on men. Even more so if kids are involved :(

I hear that online, but from what I read is that you just split half of your community property. Where's the disconnect?

Also, in my state you don't split assets people had before going into the marriage. Maybe that's just here though.

Those all applied in my case, and I simplified my original statement too much (I lost more than half because that's where I had saved funds that I had to use in the divorce to "offset" the other party's interest). My apologies.

I guess the point I am trying to make is that I don't know if everyone realizes that if you are the only one in the household saving away for the future, that those savings are not "yours" if the marriage ends, even if your ex-spouse was absolutely frivolous with money, they will get half of anything you saved, and speaking from experience, that feeling absolutely sucks and was one that I am still trying to recover from years later.

I'm scared. I'm a big saver and it's always been my goal to retire early, but I'm constantly having to push my fiancee not to throw away money frivolously.

She also makes far less than me because she wants to work in a field where she makes a difference. She could make twice as much, but she chooses not to. We're not going to have kids, and we split chores equally.

It seems messed up that the relationship is going to put me in worse state financially by subsidizing my partner, and on top of that the laws are structured to give her more money (even though she's fully capable of making more herself).

I love her a great deal and our relationship is otherwise healthy, but I'm scared for a hypothetical situation where things go south. Expect the best, prepare for the worst, right?

Yikes.

I did the homemaker thing. The ex was career military, we had special needs kids and I had serious health problems. It was the right thing to do, but I am still trying to get on my feet financially post divorce.

We had a 1950s style marriage where he was the breadwinner. I come from a much more financially savvy and financially conservative family than he did. His idea of what to do with a pay raise: Finance more debt!

I found it completely crazy making.

I never want to be financially dependent on a man again. At some point, I decided the best thing I could do to make a damn difference in the world would be to leave behind my Pink Collar Ghetto aspirations and do any damn thing I want with my life instead of continuing to care about the world while the world doesn't give a flying fuck about me and my bills.

I sometimes wish I could talk some sense into other women. If you need to express some need to care, get a pet.

(No offense intended. I am trying to be sympathetic.)

No offense taken! Divorce is a shit sandwich, no matter which end you are on.

If I may ask, were attorneys involved on either side in your case? I suspect that is the main differentiator between my experience and others that I have talked with that were able to settle on a sane number with their ex.

My ex-wife and I did the homemaker thing too. A lot of my peer group did. I don't think it works these days. No offense intended, but just like you never hope to be financially dependent on a man, I hope to never have a woman that is financially dependent on me again.

were attorneys involved?

No, we had a DIY divorce.

I'm actually a rather skilled negotiator in some sense, though I don't usually say so because I think that gives people a completely different idea than what I really mean. I mean more like diplomat or like the guy in the movie The Negotiator. [1]

We kept lawyers out of it and that meant there was more pie to go around because we weren't giving tens of thousands of dollars to lawyers. That made it easier for both of us to give a little here and there.

My divorce was surprisingly amicable, more so than my marriage. We agreed ahead of time that we were not going to leave either party in a shithole of financial mess. (I sometimes joke that if we hated each other and wanted to make each other miserable, we could have just stayed together. :-P)

I have been to his house once post divorce and met his new wife. His life seems to be pretty okay these days.

[1] https://www.imdb.com/title/tt0120768/

Yeah, I was pretty skilled too, and we had it all agreed to, and then the night before the appearance she decided she wanted $20K for my unvested RSUs and $5K for a house with no community property value because we had used some money from an inheritance she got to replace the AC two years before we split. That's when the attorneys got called, and the rest is history.

Your story sounds like most I have heard where no lawyers got involved. Hell hath no fury like a partner scorned (with a retainer).

Glad to hear that you made it out without exercising Mutually Assured Destruction. :)

Look, I'm bitter and angry about my situation, so take this with a grain of salt...

I feel like the incompatibility we had in regards to savings, financial discipline, etc., should have been a much bigger red flag to me. If you are having these sorts of doubts, I would think long and hard before making the commitment that goes along with marriage. If you do get married, and it doesn't work out, just make sure you divorce before the 10 year mark, or you will have no set end to spousal support. If you divorce before 10 years, you will normally pay spousal support for half the length of the marriage (about 4 years in my case). If you have kids, all bets are off and you will likely be on the hook for spousal, child support,(plus half of medical expenses, extra-curricular activities, and child care costs while your ex-spouse works - this is on top of monthly child support), you will be required to maintain health insurance for the children, you may get your wages garnished, you may get Smith-Ostler riders for 12% of any bonus or unexpected income towards more child support, legal fees, therapist fees (very easy to have a therapy order in place for children and/or the parent(s)), etc.

That said, anything you have saved before marriage is yours to keep if you divorce, so there's that aspect to keep in mind.

You don't need to marry, right? I mean, what is your reason to do so? In your case, I don't see a whole lot of pros and a number of cons.

In the US, there's a ton of variation between states.

Related reading: http://realworlddivorce.com

Thanks for posting this, it's incredibly informative and interesting. If you look at "Scenario 1: Professional Wife and Slacker Husband" in the California section, you'll see a situation very similar to the one I am in, just that the dollar amounts involved are lower, (I earn around $125K, invested about $10K into ex-wife's part time business), the child were both from one parent, and the genders are swapped. In my case the monthly combined spousal and child support that Dissomaster spit out was $3,300.

It's almost three years out, and I still feel hopeless about being able to salvage my life financially.

Sorry, I was sort of vague here. Basically, I had to give $105,000 (half) of the 401K to my ex-wife, I had to pay her out for potential values of my stock options and RSU's (have fun valuing those!), I had Smith-Ostler riders attached to any bonus income, I had three more years of spousal support ($1800 per month), legal fees to pay, etc. I used the 401K to pay these things, so technically, I did get half, I just had to immediately use it to pay it all to my ex-wife.

Yes, I kept the house, which was my separate property with a community property interest, since it was purchased in my name only before we were married. I cannot afford the house, so I am trying to play the foreclosure avoidance game and give my kids a nice place to live that provides them with some continuity.

I also had $1700 in child support (this is two kids, with a 60/40 custody share) that I offered to give her more money in the settlement if she would agree to $1400 instead. She agreed to that, and then before that judgment had even been processed, had me back in court to get $1700 per month, which she did, since the court will use whatever Disso-Master spits out. She owns her own business, and of course her personal and business accounts are mingled, so there is no way to pinpoint what she actually makes, but it was at least $3,500 per month part time when we were married.

But none of that matters if you earned a lot more than your spouse. Divorce is no joke, especially if you are the high earner in the relationship. A lot of people are under the assumption that if you split custody, you don't pay support or the support is a nominal amount. This is absolutely not the case. The court (in CA, at least) looks to maintain the children's standard of living DURING THE MARRIAGE until the child is 18 or emancipated. This is the case even if your divorce left you in very different circumstances.

That's just child support, which is only one of the many costs associated with divorce.

(I want to make it clear that I have no problem with paying _reasonable_ child support, but I'm sorry, the current child support calculations can leave you with an egregious amount of support payments)

That last part seems highly illogical given the elimination of many of the cost of living reducing factors of having a functional single household with multiple individuals living there.

If you are expecting logic to rule in this domain, you're in for some disappointment.

Edit: I'll give you a concrete example - let's say my ex-wife decides to marry the systems engineer she is dating, who is also a high-earner. In that case, she can sue for more child support because it will move her up a tax bracket.

> Edit: I'll give you a concrete example - let's say my ex-wife decides to marry the systems engineer she is dating, who is also a high-earner. In that case, she can sue for more child support because it will move her up a tax bracket.

This is just incredible. What a naive legal system!

Divorce entitles you to immediate liquidity on illiquid assets? That’s crazy. I’d understand 50% on vesting. Unicorn employees tend to have more than twice as much illiquid stock as they have cash.

How it works (unless you settle for some amount, which I did, which ended up biting me in the ass when our stock took a 30% haircut, but I digress...) is that there is a community property interest in all assets earned during the marriage, regardless of future vesting schedule. It's all based on when the options were granted, when they vest, how long you worked there, etc.

If you have RSUs, you get to go through the fun process of either giving some value to these RSUs and paying off the other party's community interest in that valuation, or you can try to argue that RSUs have a zero dollars value until granted. Good luck with RSUs and stock options either way, as it can become a complicated mess of laws and formulas.

You can set it up different ways, but you will definitely have to get a QDRO for splitting up any retirement accounts into two new accounts.

You can try to do the same thing with stocks, where you pay when you vest or sell, or sell on behalf of the other party, but in my case, and I suspect many others, I wanted the cleanest break possible and I settled on a payout amount simply to reduce the amount of communication with my ex-wife that would be necessary to pull this off.

>The court (in CA, at least) looks to maintain the children's standard of living DURING THE MARRIAGE until the child is 18 or emancipated.

Why? Standard of livings can be preposterous and dependent on previous economic status (which might not be the same post divorce -- and in many cases it isn't).

The court doesn't care for the millions of kids who fall on standard of living without a divorce (or even while having been had out of wedlock), or who start and end on a low standard of living to begin with. Why should it care for the "same standard of living" in the case of divorce?

A decent standard of living (housing, food, etc) yes. But "maintain" the pre-divorce standard of living is BS.

Take a look at the site that was posted in some of the comments[0]. A choice quote:

"Should the guy have to pay that much as a result of a casual encounter? Wagner says emphatically yes: "The child had nothing to say about being born or the wisdom of a one-night stand. That child should be supported exactly as if those parties had married and stayed married forever." Is he worried about an incentive structure where a one-night stand is more lucrative than going to college and working? "A judge would slap you silly if you pointed out that a plaintiff would be earning more from child support than from attending college and working," Wagner says. "Put yourself in the diaper of the child. Public policy says that he or she has a human right to be raised in the lifestyle of the two parents. If you don't like that philosophy get the hell out of California." Wagner explains that the current law came about because "California was ranked 45th in nation in late 1980s in the amount of child support obtainable. The legislature was astounded and created the current system. It is public policy that California will always be ranked among the top 5 states [in potential profits from child support]."

[0]http://www.realworlddivorce.com

>"A judge would slap you silly if you pointed out that a plaintiff would be earning more from child support than from attending college and working," Wagner says.

They might "slap you silly", but they would still be wrong. And not everybody "attends college" or works cushy enough jobs...

You have to consider that you are an outlier. I think the problem with most millennials is that they don't have jobs that can afford them to save anything or are constantly in between jobs where by the time you find something you have to pay off additional accumulated debt.

I honestly doubt I am that far off an outlier based on this being HN...

Edit: To be clear, I mean that I suspect that there are a number of high-earning individuals on this forum that have assets like property, retirement accounts, stock options, RSUs, bonuses, etc., and that many in my situation would be paying similar amounts.

Keep in mind that I am talking about divorces involving lawyers on each side. I have no doubt that others make out much better if they have a sane ex-spouse that just wants to move on with their life.

> After the divorce, I have about $20K left after having to split it with my ex-wife, who had saved a grand total of $2.00 during our marriage.

Wow, that is brutal. I'm guessing common law state? Even then, shouldn't you have 50%? Was it attorney expenses?

Please see my response above, I wasn't clear in my original post, my apologies.

Well, another obvious takeaway is that even if you're "very good at saving" a divorce can still wipe it all up... or an illness or accident, and several other such emergencies...

True, true. I mention divorce since marriage is a risky behavior which leads to terminal conditions in more than 50% of the cases contracted. ;)

Engineer graduates from a Big Ten school can make a solid salary and have a very nice cost of living if they stay in the midwest. If you and your spouse bring in a combined >$150k a year and buy a house that costs <$400k, you can have a good amount saved away by the time you are 32 (10 years of working).

I think you're right. About half my social circle is friends from work (other millennial in the high tech sector) and for the most part they are doing fine. Took a few years to knock out student loans but folks are saving well and buying houses now. The other half are those who had other degrees / no college and probably don't have a job that provides a 401k and I wouldn't be surprised if a majority don't know what an IRA is.

Me and my long time girl friend have been really fortunate, no student loans and high paying jobs for the first 5 years out college. Our retirement portfolios are in a pretty good place right now.

Seems that at all levels of American society inequality is rampant.

The average/median salary for millenials is between $25-40k (the statistics I see vary significantly). I imagine that this article is basically a proxy for the poor wages millenials typically have.

I'm a young millenial in a low cost city in Texas with a retirement account balance over the average by quite a bit. If you have the money to max your accounts every year, its very easy. And I've already bought and sold a house while I maxed out my accounts.

It's interesting to see how folks can live in other areas. Because retirement accounts have so many restrictions, people who anticipate spending $1M-$2M on a house in the next 10 years pretty much ignore them. Of course, these homes (at least ones near Palo Alto) are themselves a good investment, and carry tax benefits similar to (but smaller than) retirement accounts.

Hearing the stories here makes me want to leave!

I turn 25 in several weeks and my net worth just crossed $150k a month back. I currently make just shy of $80k in Minneapolis.

The biggest recommendations I can give for trying to save more money:

Make yourself work a bit – sock away more than what you would deem “comfortable” and live off the rest. You’ll be forced to really think about what’s worth spending on.

Get a roommate. I save probably $3,000 a year from this alone, and a big plus is that I get along just fine with him.

Spend frivolously on things that really let you have fun or relax – to a point. I like Mexican food, a good gym membership, and quality groceries. I don’t worry about what I spent on these items because I spend next-to-nothing elsewhere.

Start young. I opened my Roth when I was 17 and have maxed it out each year, in addition to maxing our my work retirement accounts the last few years.

Not necessarily. Those statistics would imply that there is a huge number with little to no savings at all which is what the article speaks to. Medians will move towards zero more quickly than means when as more zeros are added to the data set.

A 32 year old has been working for about 10 years. S&P500 has been growing at 10.5% with dividends reinvested for the last 10 years. That means about $3500/yr in 401k contributions would get you to the average account balance. Take into account employer matches and that's honestly not as much as you expect it to be. Traditional wisdom is to put away 10% and employers have started to implement the auto-incrementing auto-enrollment features into their 401k plans that Richard Thaler has been promoting for the last several years.

All good points. My only comment would be that the average age of the people in the study was not 32. That was the maximum age.

Keep in mind compound growth. Over the last 5 years, S&P 500 is up almost 100%.

But don't forget that past performance is not a predictor of future results. It may crash 50% in a month. Don't take growth for granted.

I think GP was making the point that the retirement account balance may be largely due to the recent run-up. You're right of course that it can (and will) go down in the future!

Of course, but that isn't related to the current discussion

My wife's situation may serve as a useful example. She started with her current university employer about 3.5 years ago. In that time, her balance there has grown from zero to about $90k. This is from 401a/403b contributions and employer-matching based on a $125-150k salary and substantial market gains. She even used one of the Vanguard retirement funds targeted at millenial investors.

We're actually gen x and have other retirement assets I'm ignoring here. But, this account illustrates real world performance that any number of tech workers could have reproduced in the same short time period. Not only that, but many are at an age where they could have been making contributions for 10-15 years now, rather than just 3-4...

I save at least 15% of my salary and I live in a moderately priced city(Minneapolis). For me the biggest reasons for having a large 401K is starting early, the employer match, the S&P 500 performing well and the lowish cost of living, and of course a solid salary.

Roughly $700K between my wife (ex-bond-trader) and me. We are a couple years past 32 but had about $600K then, at which age I'd already quit my Google job and she'd quit her finance job.

I'm probably pretty unusual, but I'm 25, living in a high cost of living city (Boston), and have right around 200k saved right now between retirement and taxable accounts. Started at -15k out of college. High salaries around here definitely help, as does being relatively careful with money (though I don't limit myself much). I do plan to buy a house in 5-10 years, most likely in a lower cost of living area, ideally in cash.

Is Zuckerberg a millenial?

He's now 34, though the study was released earlier this year and carried out sometime before then. But it would be very unlikely that he would have been one of the respondents in the study :)

Edit: apparently based of census data from 2014, so yeah he could be in there!

So over 85% of millenials saved less than $20,000 for retirement?

I had saved up $100k at 23yrs old while living and working in Detroit and I started working at 19yrs old. Tons of folks in SF today with over a million saved at 32yrs old.

The majority of workers under 32 have not worked through a bear market yet, let alone lost a significant chunk of savings to one.

In in the UK my pension deposit is 24.5% of my pre tax salary that said this isn’t money I can touch for an emergency.

That's always been my objection to pension arrangements in the UK. It's a cushy deal between the Government and financial institutions to lock-away money for 30+ years, and then tax the contributor when he becomes eligible to access it.

Pensions should be tax-exempt at withdrawal, or else be accessible. Otherwise what's the incentive, other than when pre-tax contributions are possible?

I agree, luckily I'm not a British citizen but as there is a tax agreement between the 2 countries I can move all my pension contributions outside of the UK without any tax.

The pension tax deduction is also pretty poor and for every pound you earn above 100K you are losing your allowance which also infuriates me.

They may also have employers that match generously, probably uncool companies that actually have to pay people to compensate for their relative lack of hipness.

1:1 matching is almost unheard of now but was normal twenty years ago.

Contemporary jobs provide for "unlimited" (translation: uncompensated) vacation time...no 401k matching...sometimes even a huge copay for health insurance.

Or they have trust funds, inheritances, profited from dead parents home sales, etc.

>> It is amazing that the median is under $20k and the average is nearly $70k. This means there are some folks with very large retirement savings that are pulling the average up a lot.

I am 30 and I have about $140k in 401k.

EDIT: Why the downvotes? I'm just affirming with a datapoint. There is an extreme inequality in America and I'm willingly acknowledging that.

I didn't downvote, but assume it's because one datapoint is not meaningful, and it comes across as immodest.

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