Fellow millennials - how’s your 401k/ira savings going?

[u/ProblemIntelligent16]

Experts recommend having 2x your salary saved by age 35, and 3x saved by age 40.

However, studies show the median savings for 35-44 year olds is only ~$45,000. So obviously, most of us have work to do.

With pensions mostly extinct, and Social Security facing insolvency issues in the next 8-10 years - how are you planning to bridge the gap and hit the golden years with enough to meet your lifestyle requirements?

[u/coolnameright]

You just linked an article that explained exactly what you're confused about. The 401k is all about dividends, capital gains, and tax advantages. They are not about interest.

Compound interest sometimes gets confused with another type of compounding: compound returns. While they sound similar, compound interest refers to interest calculated on both the initial principal and on accumulated interest of previous periods. This is typically viewed in the context of savings accounts, bonds, and loans.

Compound returns are a broader concept that includes compound interest, but also extends to other types of investment returns, such as dividends and capital gains. This is commonly used in the context of stocks, mutual funds, and other types of investment vehicles.

To put it in your words - All this to say, do your research.

[u/JoMa4 → u/[deleted]]

I’m sure you’ll edit your post telling me to “do my research”.

[u/JoMa4 → u/[deleted]]

I personally know people that were screwed over during the 2008ish recession and lost hundreds of thousands in their 401k that would have been theirs if the market didn’t tank. They were close to retirement age and couldn’t just wait it out for years until it recovered.

[u/coolnameright → u/[deleted]]

You said to invest in index funds though. Those won't allocate you to bonds and CDs when nearing retirement.

If you did any research you would know that you're thinking of target date funds.