How much do you need to live on in retirement? besides, if I become a Democrat, Uncle Sam will take care of me, right?
Don't forget by placing associates into 401k plan their wealth can also be controlled. Plan terms and conditions can be changed at will. Just a thought. Akuma
In 2011, the average *single* American would need a minimum of 5 million liquid cash, to retire "comfortably at age 65. And that's only if he had no existing debt. This is assuming he would live to 85 years of age. This would equate to a mere $250k per year to live on. How one person with zero debt live on such a paltry amount? With the price of gas, food and utilities, he would barely be able to survive! He would really need to have closer to $10,000,000 in cash at retirement age to have even a fighting chance to survive.
Can you enlighten us on how a rich person can shelter/hide assets with 401K? Let's say I have $1MM cash and $5MM worth of property, so how the hell 401K to which you can not contribute more than $15K/year will help me shelter this? I am DYING to read your response.
well this is just a foolish statement from the get-go. the average person does not need 250k / year to live comfortably, i would daresay it must be closer to the average income per capita they'd need to get by ($47,400). now when you factor in the social security benefits that cover about half of that, you need to make 23kish to get by. so retiring at 65 and living to 85 would be 20 years at 23kish which would be about 460k of total money. but you don't actually need all 460k because you do get interest income if you have the money invested in say the 10 year treasury. i haven't had a math class in a while so i cannot be precise but i'd say the average person would need closer to 300k to spend about 50k/year from 65-85 years old. so if that average person with 211k at age 55 can put 10k / year in they are good to go at 65.
The point is that people that stuck with dollar cost averaging into this market doubled their money in during the worst decade in history for stocks. 66% percent of the gain came from individual contributions and employer matched contributions and 34% of the gain came from capital gains. By 2021 - that balance will probably be over $800k. Whereas the folks that panicked, went to cash, and never got back in, probably ruined their hopes of ever retiring comfortably.
create an LLC that holds the capital and "purchase" shares for holding in your 401 - it's done more often than you might expect.