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Message to my Kids

Dear Kids, 

Experts recommend you save 10% of your income each year for retirement. Do you? This is just the beginning.  Make sure you put the money into a 401K plan, the only way you can build a substantial nest egg.  For me, I would need $500,000 in savings just to pay my property tax with the 1% interest, if I invested in a bank savings account.  Put your money where you can't get at it.  Not banks. "Banks shaft you in two ways, high interest when you borrow and minuscule interest when you save."

Only 39% of Americans can meet a $1000 emergency.  Can you?  If you cannot, you are in dire straits. About 80% of Americans live paycheck to paycheck.  Is you, then ditto.  Have a two month minimum, hopefully eight month financial cushion. Actually, much more if you're in your forties.

About 38% of Millennials believe $200,000 is enough for retirement.  Do you?  Of course, this is ridiculous.  You need at least $1,000,000 just to begin thinking about retirement.  At this rate, taking the required distribution, you will have about $50,000 per year for about 20 years - including taxes*. This plus Social Security will give you a reasonable retirement, but nothing close to comfortable. (Never a new car, little travel, and really no extras.) Also, the one million is in today's dollars. 

* Yes, even your social security incurs taxes, plus tax-deferred investments.  Also, you pay for medicare from your social security.  You also need a supplementary plan, ~$500/mo. 

Save baby, save. 

Life is like a Polaroid picture.  When I was must younger, we were all impressed with the Polaroid camera. They produced a picture in about one minute.  Miraculous. Compared with a week using the traditional photo processing methods, this was light speed.  When you reach retirement, you will think your entire life happened in one about minute. It will seem to have happened that fast.  Keep track of your achievements, as these are the records you even lived. 
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