JayB Posted March 9, 2006 Share Posted March 9, 2006 The savings rate only includes the percent of savings from disposable (after tax) income. Because 401ks are the vehicle of retirement savings these days I suspect the savings rate is a bit higher, but not much. that said, 401ks are woefully underfunded, the average balance is around $2,000 and for 50 year olds it's around a whopping $80k. Good luck with that. Many folks look to their house as their retirement savings account and mortgage up to their eyeballs. Not a good idea. Nope. A house is an asset like anything else. I think that recent rates of return have convinced everyone that home values only go up, but most people who believe that have never looked at the data, and have a very hard time differentiating between real and nominal returns. Robert Schiller has compiled one of the best - and only - long term data sets that account for inflation, house quality, etc - and it hardly supports the proposition that pouring all of your money into this single asset class and leveraging yourself to the hilt is a surefire path to a secure retirement. It was hard to go wrong in the interval between 96 and the present, but there's certainly no guarantee that this this will always be the case. Quote Link to comment Share on other sites More sharing options...
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