Everyone can still be screwed at the same time you're OK. Unless you're implying you're just average median dude.
Some experiments can be run in a spreadsheet. I assumed 40 years of work (optimistic) and google reports a median personal income of 32140/yr and average savings rate of 3.2%. Shadowstats reports an average inflation rate around 5%, thats sounds about right. The S+P 500 total return over the last half century has been 7% but it oscillates insanely from -5 to +17 percent per decade. I think it very unrealistic to assume the 50s or 90s will ever happen again, but whatever, I feel optimistic this morning. I modeled in a 1% annual decline in income, which is lower than actual but sounds vaguely realistic.
My spreadsheet model shows an inflation adjusted retirement nest egg of $51K for joe 6 pack median middle class dude assuming its never dipped into for medical, educational, or unemployment issues for J6P or his kids or parents (in other words almost everyone will not have the money). I'm also assuming smooth economic growth (LOL) for best compounding results.
It still affects you as most investment advisors assume 0% inflation, 10% rates of economic growth, etc. In a world of poverty for almost everyone, that sounds rather optimistic.
Some other interesting experiments... 15% annual growth rate still only gets joe 6 pack to about 10% of your goal.
Joe6Pack at 1% annual wage increase (which is totally unrealistic in era of long term decline) and 15% annual economic growth rate (LOL) and triple the median savings rate at 10% of gross income being saved for 40 years and no unemployment, medical issues, or educational costs for J6P or his parents or kids (LOL) is still only about 1/3 of your goal.
Sorry, but some of your assumptions seem ridiculous.
Nobody I know experiences nominal wage declines, even of 1%. For reference, the average annual raise is a full 3%. [1]
As for 5% inflation, everyone knows Shadowstats is incredibly bogus and pushing a clear agenda without any grounding in realistic CPIs. [2] [3] For the past few years we've been experiencing almost 0% inflation, though I use 3% for my models (to be conservative).
I'm not implying that someone with average income will retire with millions, I just took issue with the idea that somehow "everyone" is going to end up penniless. 50% of people fall above median income and a substantial portion of us can reasonably expect to have retirement savings readily available.
He's probably referring to the average American, and someone with a predicted savings in the mid seven figures is certainly not among that demographic.
I was having in mind europe's imminent pension fund tragedy a few years down the road. Even if americans don't have statewide retirement funds, when a crisis erupts, pensions are one of the first things that does get cut. These costs, and also healthcare will eventually be shared by everyone.
This has already happened in europe's southern bankrupt economies
Obviously the solution is to not depend on pensions (which I don't think most young Americans are planning on anyways). It's awfully hard to lose your own savings though.
Basically, "everyone" is hyperbole. Obviously many people can retire fine, if you live within your means and consistently save.
