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Sunday, October 5, 2014

USA Average #401k Balance By Age & $ #stockmarket



The 401k does a woeful job in replacing a pension. Furthermore, only about 31% of the labor force participates in a 401k due to lack of access or a lack of foresight. But we must make do with what we have, which is why we’ve provided some 401k savings guidelines in order to motivate you to save more for retirement.

Below is a 401k retirement savings chart that first appeared in the post, “Can I Contribute To A 401k An An IRA“. Before I explain the assumptions behind the chart, please take a look to see whether you think the amounts are too high or too low and why. There should be plenty of opinions because everybody has different life circumstances. The initial feedback is negative for folks up to age 35, and much more agreeable for folks over 35.





The chart assumes a number of things:

* The chart is more forward looking instead of backward looking since 401k contribution limits were lower in the past.

* You start full-time employment at age 22 after college or vocational school.

* You join a company that provides a 401k.

* You contribute $8,000 to your 401k after the first year.

* From the second year onward you contribute the maximum amount to your 401k of $17,500.

* The Low End column calculates what you could potentially have in your 401k after so many years with a constant $17,500 a year contribution, zero company match, and no growth.

* The High End column calculates similar levels of contributions, but includes anywhere from 5-10% growth compounded over the next 43 years. Numbers have been rounded up to make the numbers easier to remember. There still is no company match.

* The chart can be used as a guide for your total savings amounts, including your IRA, Roth IRA, and after-tax savings.

* The chart is for one person, but can also be used as a guide for a married couple if one spouse decides to no longer work.

* There is no average by age because the largest 401k administrators generally only throw out what number: the average 401k balance across all their user accounts. My chart is the suggested balances by age for a healthy retirement not dependent on others.

LET’S DISCUSS THE 401k ASSUMPTIONS

Based on my chart, we can make an assumption that the majority of us will all retire as millionaires by the age of 65. This might sound absurd given less than 3% of the American population are millionaires. But we are different from the rest of the country because we’re reading an article on 401k savings and we likely leverage technology to manage our finances – Personal Capital being the most obvious choice.

If you are 22 years old and reading this post today, the numbers shouldn’t look too daunting because a million dollars in 43 years will probably have one third the purchasing power as it has today thanks to inflation. The biggest challenge of a 22 year old is to not develop wanderlust too early and maintain discipline in saving as aggressively and consistently as possible.

If you are a 50 year old reading this post today, then your support for my 401k savings assumptions will depend on whether you are within the Low / High range or whether you are below the Low range. If you are below the Low range, then it is likely you think the chart is unobtainable for most Americans. Valid excuses such as going to graduate school, being unemployed for a year, not finding a job with a 401k plan, paying for your child’s college tuition, and medical emergencies all serve to disrupt the assumptions in this chart. Life happens to us all. But if you are to be completely honest with yourself, you know you could have probably saved more if you absolutely had to.

Finally, let’s assume you are 65 years old and no longer want to save. You realize the median life expectancy is 80 years old for men and 82 years old for women. It’s time to start spending your money because you don’t want your reckless kids to spend your fortune! There’s a good chance you won’t even live until 80 because you’ve spent a lifetime eating bacon and not working out thanks to your job. But to be conservative, take the the Low and High amounts in the chart, divide the number by 17 and you get $43,705 – $205,800 a year to spend for the rest of your life.

If you add on the maximum Social Security benefits one can take for the year of $31,704, you’re living a pretty good life with $75,409 – $237,504 a year. The numbers are aggressive because maximum contribution amounts were lower in the past. But humor me anyway as this is just an exercise of what could be. Remember, I haven’t included any company match or growth over the years so hopefully that will appease any naysayer.

LET’S COMPARE THE 401k ASSUMPTIONS TO REALITY

Every source available says that Americans are not saving enough for retirement. Vanguard recently reported the average 401k balance at year end 2013 reached a record high of $101,650. Not bad, but still much lower than my chart’s guidance of $218,000 to $350,000 for the Low and High End for a 35 year old (the average age of an American).

Meanwhile, other reports show the median retirement account balance is $3,000 for all working-age households and $12,000 for near-retirement households. Supposedly two-thirds of working households age 55-64 with at least one earner have retirement savings less than one times their annual income. Given the median household income is roughly $52,000, that’s not a good sign.

Finally, more than 38 million working-age households (45 percent) do not own any retirement account assets, whether in an employer-sponsored 401k type plan or an IRA. Hopefully these households are diligently saving their money in after-tax accounts and not solely depending on Social Security.

Suffice it to say that we’ve got a retirement problem on our hand.

WHAT ARE THE SOLUTIONS?

It’s tricky to prescribe blanket solutions given everybody faces different circumstances. But the below solutions should at least help:

1) Start saving early and often. As you can see from the High End column, compounding really does do wonders when there is a positive annual return. Even with no compounding, you will end up with 14X – 63X more than the median household. As soon as you can uncomfortably start maxing out your 401k, go for it. If your monthly savings doesn’t hurt a little bit, you aren’t saving enough.

2) Remind yourself that nobody will save you. If the retirement age for withdrawal is not lifted or the Social Security tax is not raised, Social Security can only pay about 72% of scheduled benefits starting in 2035 through 2087. It’s better to get in the mindset of completely writing off Social Security to motivate yourself to save more for retirement.

3) Ask yourself whether you really want to work forever. Extending work life is one way to solve the retirement gap. But sometimes you might get laid off, or nobody wants to hire you. Do you really want to be beholden to a job for money when you’re over 65 years old? Every single dollar you save now is one dollar you’re saving for retirement.

4) Develop alternative income streams. Besides withdrawing from your retirement funds and collecting Social Security, think about developing other sources of income to support your lifestyle. Other sources of income can be in the form of creating an after tax dividend portfolio, building a CD ladder, or investing in peer-to-peer lending to name a few.

5) Stay on top of your finances. The more you can track your finances, the better you will be able to grow your net worth. The clients who I speak to who need the most help with their finances have never bothered to calculate their net worth or track their cash flow. Practice the habit of knowing exactly how much you have in each account, your average total monthly expenses, and your average total monthly income to start. Sticking to a consistent process over time does wonders.

CONCLUSION – TAKE ACTION!

Now that you’ve seen how much you can potentially save in your lifetime, what’s stopping you?

Join Personal Capital and run your 401k through our free 401k Fee Analyzer. To do so, simply:

1) Log onto the Personal Capital Dashboard.

2) Go to the Investing tab on the top right.

3) Click the 401k Fee Analyzer to see the results of how much you’re paying in fees.

4) Adjust your contribution, employer match, fee percentages, and return estimates to calculate what you’ll have by your target retirement age

Written By: Daily Capital e-mail distribution list to get all the latest posts sent right into your inbox.

Tuesday, September 9, 2014

Apple Watch will cost $349 and be available early next year. Full details #rt #iWatch #AppleEvent




Apple Watch will cost $349 and be available early next year. Full details #rt #iWatch #AppleEvent

Monday, September 8, 2014

Shares of Marriott International (NYSE: $MAR) have received a consensus rating of “Buy” taret 85



Shares of Marriott International (NYSE:MAR) have received a consensus rating of “Buy” from the twenty-three analysts that are covering the company, StockRatingsNetwork reports. Nine analysts have rated the stock with a hold recommendation and ten have issued a buy recommendation on the company. The average 12-month target price among brokerages that have issued ratings on the stock in the last year is $66.85.

A number of research firms have recently commented on MAR. Analysts at JPMorgan Chase & Co. raised their price target on shares of Marriott International from $74.00 to $84.00 in a research note on Thursday. They now have an “overweight” rating on the stock. Separately, analysts at Raymond James reiterated an “outperform” rating on shares of Marriott International in a research note on Thursday, July 31st. They now have a $72.00 price target on the stock, up previously from $65.00. Finally, analysts at Zacks reiterated a “neutral” rating on shares of Marriott International in a research note on Thursday, July 31st. They now have a $69.00 price target on the stock.

Shares of Marriott International (NYSE:MAR) opened at 70.83 on Friday. Marriott International has a one year low of $40.74 and a one year high of $70.98. The stock’s 50-day moving average is $67.04 and its 200-day moving average is $60.6. The company has a market cap of $20.581 billion and a price-to-earnings ratio of 31.79.

Marriott International (NYSE:MAR) last announced its earnings results on Tuesday, July 29th. The company reported $0.71 earnings per share for the quarter, beating the analysts’ consensus estimate of $0.67 by $0.04. The company had revenue of $3.48 billion for the quarter, compared to the consensus estimate of $3.53 million. During the same quarter last year, the company posted $0.57 earnings per share. Marriott International’s revenue was up 6.8% compared to the same quarter last year. Analysts expect that Marriott International will post $2.50 EPS for the current fiscal year.

The company also recently announced a quarterly dividend, which is scheduled for Friday, September 26th. Shareholders of record on Thursday, August 21st will be paid a dividend of $0.20 per share. This represents a $0.80 annualized dividend and a dividend yield of 1.13%. The ex-dividend date is Tuesday, August 19th.

Marriott International, Inc is a diversified hospitality company. It is a lodging company with more than 3,700 properties in 73 countries and territories

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