retirement money

[myrdale]

I've been an avid Ramsey listener for quite a while. A few things he says:
3. 7 Out of 10 Luxury cars are leased, the drivers will never own them.
4. Over half of retired folks are still carrying a mortgage.

For #3, a quick search and it looks like your numbers are good. This blew my mind.

For #4, the numbers I found are slightly lower at 44%. I don't know if this tells the whole story though. If you retire with $2M in the bank, and you're mortgage payment is reasonable, I am not sure there is a problem. Its just not specific enough of a stat for me.

[james.hendrickson]

I'm just still blown away by how poor the situation is for most people.

[Fishindude77]

I feel like many people save into a 401k. They just do the match. And when asked they would never consider hitting the maximum.

Even if they are contributing to a 401k, a large percentage are blowing everything else they take in and don't have any financial cushion. It's very common to see 401k's cashed out early, despite the taxes and penalties when an emergency comes up.

Also, there are still a lot of work places out there that do not offer a 401k or many benefits at all. A good example is the residential and light commercial construction market which employs millions. Many of these 10-99 employees are treated as independent subcontractors to get around buying workmens comp insurance, etc. and they are responsible for their own insurance, taxes, etc. You see quite a bit of this in the Ag sector and service businesses as well. A good many of them don't even pay their income taxes, they just take the money, live in a cash economy and hide. Ask about this next time you have your house roofed or hire someone to trim trees or do yard work.

[disneysteve]

3. 7 Out of 10 Luxury cars are leased, the drivers will never own them.

Exactly. The higher the sticker price the higher the percentage that are leased. I used to be a little envious of people driving high end cars like BMW or Mercedes or Lexus or whatever until I learned this.

My old partner got a new BMW every couple of years. Leased of course. He was paying more every month than my mortgage payment and never had anything to show for it. Now I’m all but retired at 58 and he’s still working at 62 and probably won’t ever be able to retire.

I don’t envy luxury car drivers anymore. I’d rather have my paid for Camry for 12-15 years and a nice 7-figure portfolio.

[disneysteve]

Even if they are contributing to a 401k, a large percentage are blowing everything else they take in and don't have any financial cushion.

Our CFP has said that he often has clients come in and when they sit down to review their portfolio, it is 100% their 401k and that’s it. No other financial assets beside their home. He loved when he met with us and we had a diverse portfolio of taxable, tax-deferred, and tax-free accounts. It gives him so much more to work with when it comes to planning a withdrawal strategy, tax efficiency, managing MAGI, etc.

[LivingAlmostLarge]

I read that over 60% of luxury cars are leased. But over all only 30% of cars are leased. I shake my head over how many people lease their cars. I thought it was like 1 in 3 which is the overall number.

I also see a lot of people who have only 401k and nothing else. I don't get how they don't save any money outside of 401k.