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Comment by randomdata | Hacker News Reader

Yes, that's right. Assuming a typical lifespan, they will have 20 years left in ~40 years. Assuming a 2% inflation rate, $3 million in 40 years is equivalent to ~$600,000 today. A 60 year old holding $600,000 today does not seem like that high of a bar.

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> A 60 year old holding $600,000 today does not seem like that high of a bar.

Gen Z isn't 60 years old today. They don't have 600k, and for them, it is a high bar.

That's right. They have ~40 years left to acquire $3 million before they have 20 years left, assuming the typical human lifespan. Which, adjusted for inflation, is the same as someone who saved $600,000 over the past 40 years.

So, like, not so many people, and even less going forward?

https://fortune.com/recommends/banking/57-percent-of-america...

That article is misleading clickbait. Per the US government (BLS), the median household has ~$1,000 per month left over after all ordinary expenses. That is, after car payments on their BMWs, healthcare, iPhones, etc.

The median American can afford to save considerable money but they tend to spend it on lifestyle flexes instead.

I am not sure what emergency savings has to do with retirement savings. Retirement savings are often not very liquid, so they wouldn't be available to use in an emergency, typically.

And certainly some people never did manage to save $600,000 over the past 40 years, but it remains that the bar does not seem that high. Even the lowest bar will not be met by some people, but that doesn't mean the bar is high.

You think those without $1000 emergency savings have retirement savings, but they just aren't liquid enough?

In any case, if you want the categories separated, here you are:

In 2019, about half of American households had no savings in retirement accounts, according to the Survey of Consumer Finances (SCF). These accounts include individual retirement accounts; Keogh accounts; certain employer-sponsored accounts, such as 401(k), 403(b), thrift savings accounts; and pensions.

https://usafacts.org/data-projects/retirement-savings

> about half of American households had no savings in retirement accounts

We're looking at those who have 20 years left, not those who could have 60 years left. Naturally one could avoid saving anything for 39 years and then plop down a $600,000 lump sum in the final second and you would be in the exact same place as someone who slowly amassed $600,000 over the span of 40 years, so half of the population having nothing saved doesn't tell us anything.

Bringing us back to the actual topic: Of those who have 20 years left, how much do they have saved?

>Naturally one could avoid saving anything for 39 years and then plop down a $600,000 lump sum in the final second and you would be in the exact same place as someone who slowly amassed $600,000 over the span of 40 years

Sure, they could for example win the Powerball.

The other thing with the previous comment is that it only looks at registered retirement accounts. What about savings that can be used for retirement, but aren't registered as such? How much is found there?

He means the article is saying they will need $3 million in today's dollars to retire

The needs of retirement should scale with inflation, so that means you also need $3 million today (in today's dollars) – which is rather high. $600,000 is not too far off what is the minimum recommended amount of saving to retire for 20 years on today, so it seems they simply adjusted that figure for inflation and then forgot that the income used to build up those savings also goes up with inflation.

$600,000 for 20 years is 30K per year. They'd get by on those for the next 20 years if they were to retire today?

> $600,000 for 20 years is 30K per month

I do believe that would be 30k per year.

Yes, fixed.

$30K per month, even 40 years from now based on 2% inflation, is equivalent to $13k per month today. You'd have to try really hard to not get by on that.

I assume you mean $30k per year. The recommended is more like $700,000, and that factors in your pension, but we're just using approximate figures here. Still, $30k per day today is quite doable for a retiree. What are you going to spend your money on, exactly? You've already purchased everything you need by that point in life, so you're just in maintenance mode.

For starters, that's the "point in life" where most medical emergencies arrive.

That's true. As a non-American I forget that you have to worry about such things. The $3 million is in line with what I would expect will be needed in 40 years, sans healthcare costs. It is, adjusted for inflation, in line with what is recommended today where healthcare is provided to all. So, it seems it seems that figure assumes that US healthcare will be 'free' in 40 years?

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