patrick.net

Dan8267 says

negative or at least dismal real returns over the next half century

Yes, thank you. These are many of the risks that I alluded to. You are very clever and I am sure you can navigate these perilous times.
Many of the easily influenced masses, not so much.
Dan8267 says

Baby Boomers who will have no one to sell them to as they retire and cash out of the stock market

Bag holders. Does anyone in the financial industry or the government genuinely give a fuck?
The stock options are exercised, the commission checks cashed, the pensions claimed. It will be someone else's fault.

"Keep in mind that contributions to a Roth IRA can be withdrawn for any reason at any time with no penalty or tax liability."

@Rent4Ever,

FYI, that's not entirely correct. U have to wait 5 years before u can withdraw principal, not the gain, without any penalty unless you're 59.5 or older.

9% return annually, that's not conservative... that's overly optimistic.

So take 5% increase. You still get 1,000,000 at age 68. All for saving approximately 417 dollars a month. Once you make that kind of saving a part of your life, you don't miss the money too much. Granted, for a lot of young people it's tough.

I think it would be really important to do if you are not going to college and are in the work force right away. Your salary might be lower than a college graduate over your lifetime, so it's best to start saving now because that's a real advantage. You might be better financially in the long run than a lot of college graduates.

Reality says

Tax-free money that you can not touch, and will stay tax-free only if the
politicians allow it. They are already talking about national sales tax now!

It will be nearly half a century before your daughter can touch the money.
What was the world like half a century ago? Gasoline was 20 cents a gallon. At
this rate (good luck counting on that), $3.5mil at that time will have the
purchasing power of $180k today.

---------------------------------------------
Wait a minute..... Yes, the investments in a Roth-IRA will grow tax free, but IIRC, since contributions are AFTER-TAX, they can be withdrawn w/o penalty down the road. You can only withdraw what you contributed, not on the profits those contributions generated....

The Roth-IRA is a no-brainer for a kid or young adult. Fill it with Dividend growth companies (KO, MCD, PM, WAG), re-invest or DRIP the dividends into purchasing more of the same, and you'll be amazed how much $$ will grow. Plus, if you are in a jam, and need to withdraw some $$ for an emergency, it can be done w/o penalty....It's like shooting fish in a barrel, I say....

FortWayne says

9% return annually, that's not conservative... that's overly optimistic.

Yeah, I nearly laughed the blue off my ass when I read that.

MsBennet says

Granted, for a lot of young people it's tough.

Not everybody is a DINK and/or yuppie professional, nor could nor would they be. Someone must be collecting the trash and mining coal, and the US ain't Europe. $400 a month is a lot of money. .

According to the Fed's CPI deflator (far from perfect, I know), thirty years ago, a 1980 dollar is worth about $2.78 today. Using the last 30 and extrapolating forward, $1M will be worth, say, $350k?

At age 68 you're lucky if you get 4 good years left. You'd have been much better off creating memories with $400/month while you were still hale and hearty. The life expectancy of somebody born in the past few years is 73, and that carries no guarantee that those last few years will consist of golfing, cruises, and sailing.

I love boats, and if I had a dollar for every classified that I read that said "I got this boat 10 years ago as a project for my retirement, but I can no longer sail for health reasons", I wouldn't need to save for my retirement.

I don't need a million bucks (or $350k in mid 21st Century money, really) to lay in a hospice.

When my pop hit his late 60s, he went from an energetic guy full of P&V to somebody who has to prop himself up on furniture to move around the house, gets shortness of breath just walking to the mailbox, and is on 6 different meds. Every day in my dad's Florida community, some person is being wheeled out in a stretcher, those who return from the hospital ain't running marathons or on the beach a la an American Express/UBS commercial.

Many people in their late 60s/early 70s are in assisted living, some are in hospices. Very few people in their 20s and 30s are.

thunderlips11 says

And 68?! You're lucky if you get 4 good years left. You'd have been much better
off creating memories with $400/month while you were still hale and hearty. The
life expectancy of somebody born in the past few years is 72, and that carries
no guarantee that those last few years will consist of golfing, cruises, and
sailing

Yup, that's why I mentioned earlier in the thread that while I believe that Roth IRA is a good tool to utilize, I would only contribute if it does not interfere with my natural lifestyle such as taking vacations. I will take vacations now while I am young and have energy than bank on uncertainty of being able to take them when I am 65+ and possibly in poorer health. Not to mention that at that time the vacation packages are likely to be significantly more expensive.