CAREY C from NC posted over 3 years ago:

"This group’s median total assets is $2 million, but their median retirement savings is just $625,000." I assume the 625 is in retirement accounts. This is kind of ridiculous. I don't know about you, but my retirement savings are indistinguishable from my total assets. Mine are comparatively low because of contribution limits when I was working. Now, I will use assets from whatever source for retirement spending.

BARRY J from TX posted over 3 years ago:

Carey, a possible reason for the discrepancy between retirement savings and total assets is that total assets probably includes some assets that do not normally fall under the rubric of retirement savings – residence, other real estate, trust funds in the names of others, etc. For example, I do not count the market value of my residence as retirement savings since I do not intend to sell it. I also do not count mortgages I have paid off to assist other family members (or the liens to ensure they will repay me if they sell the property, a guardrail to protect their homes from temptations). Congratulations on maxing your 401(k). Don’t let the present day limits blur your focus on the long term. By the Rule of 72s, an estimated 7%-8% compounding rate means your current retirement saving will DOUBLE every 8-10 years. As the article says, the worst thing anyone can do is not start saving and investing as early as they can. Deconstructing the data in the article, this means that the mean (not average) retiree with $625,000 only had to save, invest, and accumulate about $80,000 30 years ago --- and leave it alone -- to let compounding do its magic -- to have $625,000 today. That means 87% of the wealth came from investing, not working. Remember “mean” is the middle amount. So, 67%-80% of retirees are below this mean because they did not save AND remain invested long term. Some of us poor folks paid attention when we read the “Three Little Pigs.” Words to the wise. That you are willing to question the data and are willing to do the math are two very good signs you will be successful. Net: stick 10-15% of today’s income it in the market, bet on the “don’t pass” line, and let it ride. Best of luck, Carey.

ROBERT F from VA posted over 3 years ago:

Hi Barry. Just wanted to clarify terminology. "Mean" isn't "the middle amount", "Median" is. "Mean" is "average." The article used the "median" as a measure of central tendency. Recalling my intro. statistics, the various measures of central tendency usually reported are: Mean = arithmetic average (sum all values in the set and divide by the number of values) Median = the middle value when a data set is ordered from least to greatest Mode = the value that occurs most often You indicated that "67%-80% of retirees are below this mean." I don't see the source for this statement in the article. If values are normally distributed, mean, median, and mode are equivalent, and 50% of any population would be expected to score at or below the mean, while 50% would be expected to score at or above the mean. However, distributions may be skewed, and in that case this wouldn't hold true. When discussing a median value, you can say that 50% of data points (retirees) have a value smaller or equal to the median, and 50% of data points have a value higher or equal to the median. Hope this helps!