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Comment by madengr | Hacker News Reader

The majority of the remaining 6/10 have inadequate retirement savings. I believe the average 401k balance of 45-50 YO is between $96k to $108k.

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I think we are roughly down from 40% of americans with a pension to 10%...the 401(k) was a experiment to replace pensions, of course when the pension disappeared wages never increased to supplement workers. Combined with The addition of student loans and healthcare cost increases, the 401(k) has pretty much been a failure, but they do make up the difference in pensions almost perfectly with about 30% of Americans at least having a 401(k) account.

Not disagreeing with you, but I don't actually know the answer to this question: what's the proportion of retirement savings that's in a 401k? I'd expect that someone with 108k in a 401k has a pretty substantial amount outside of it too, right?

Hah. You've gotta be rich to be poor.

Massive savings are unlikely in a government or other public role where you can get tremendous matching (14% on 6% investment) in 401k.

I would have been starving myself for a mediocre payoff in a few decades if I'd stayed in research. $40-odd-k with a $2000/mo take-home after insurance and taxes made it hard to save for a down payment in an area with a $250k median home price while trying to keep up my IRA. Not to mention you lose money every year because the state doesn't always grant COL increases.

I lived off of $20/mo 6Mbit DSL that I had to cancel for a month every half year and then renew so I didn't have to pay $60/mo, drove a 10 year old car, didn't own a smartphone, never took a vacation, and cooked all of my meals while shopping only at Costco and the local ethnic markets. It still cost $18,000 to afford a year of life.

Oh yeah, student loans. It's like forgetting you have cancer. After a while it becomes part of your identity.

108k at retirement is nothing. You can lose that in one trip to the hospital, one unlucky year in whatever overvalued market you invested in, a few years of predatory rent agreements or having to help raise your grandkids. To someone with the kind of wealth you're thinking of, that's like the $25/mo I send to my checking so my bank doesn't close the account.

Probably not. 45-50 YO are still to young to have pensions. The fact of having a 401k pretty much means no pension. Everyone I know with a traditional pension is 60+.

I’m lucky to come in on the tail end with a 401k and employer funded annuity, but any hires at my employer in the 21st century just have a 401k.

Right, I didn't assume pensions (tbh I'm young enough that defined-benefit pensions sound like a strange anachronism to me). I wasn't asking about retirement flows but rather retirement stock: I would have imagined that someone with that level of 401k savings would also have retirement savings that didn't live in a tax-advantaged account. My parents never had enough money to put in their 401k, and I've always maxed it out, so I don't have a good model of how partial-contribution decisions are made, but I would've thought that some level of liquid savings would (on average) come before locking up money in a 401k

> I would've thought that some level of liquid savings would (on average) come before locking up money in a 401k

This is correct. But most personal finance wisdom advises keeping no more than 6 months - 1 year of expenses in liquid savings. After that, funding your 401k to get the maximum company match, then your IRA and Roth IRA, and maxing out 401k, is preferred. If there's still money left over after that, it goes into post-tax investments.

> most personal finance wisdom advises keeping no more than 6 months - 1 year of expenses in liquid savings

I was unclear: by "liquid" I didn't mean in cash equivalents like an emergency fund. I just meant "not locked away until retirement, under threat of penalty" the way tax-advantaged retirement accts are.

At the very least, I'd expect that most people with a 401k have a ton of assets tied up in houses that are often to big for them after eg their children move out: downsizing and unlocking those assets is a pretty common sense move in the context of "not having enough saved for retirement".

I think the high level point I'm going for here is that I'm not sure that 401k balance is a good proxy for overall retirement savings, as implied by the comment I originally replied to. I don't have the data on this though

Problem is you can’t fund a 401k and traditional IRA at the same time. Then you can’t fund a Roth IRA if you make too much (and it’s only $3k/year anyway). The government has rigged it so they are getting a cut of your retirement savings, one way or the other.

You can fund a traditional IRA and 401k up to a certain MAGI.[2] If your spouse doesn't work, or their work doesn't offer a 401k, you can fund a traditional IRA for them as well. Roth IRA is $5.5k/year.[0] If your 401k plan allows in-plan conversions you can also do mega backdoor Roth IRA contributions up to something like $37k. [1]

0. https://www.nerdwallet.com/blog/investing/roth-ira-contribut...

1. https://thecollegeinvestor.com/17561/understanding-the-mega-...

2. https://www.quickanddirtytips.com/money-finance/retirement/c...

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