Plenty of them who are working in tech in bayarea. Most companies offer atleast 5k to 9k 401k match and its too dumb to pass that on.
Too many people cash out when changing companies. That’s crazy since there’s taxes plus 10% penalty. I always roll to my IRA, so I can manage from a single account.
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Millenials who have maxed out 401k for 5 years. So probably less than 1/3 (since 2/3 have not been working that long). Really high appreciation and other special cases also possible, but low %.
I don’t do 401k because my company doesn’t offer a match.
What? Time for Ms. Harriet to find a new employer…
I doubt many startups match. They want to conserve the cash. Plus, startups are mostly young people who wouldn’t value it much. I’m sure a majority of people under 30 would value free food over 401k match.
even with no match, you reduce your tax liabiliy today. In high tax brackets, that’s like 50%
I have an IRA account for that.
Deductible IRA has low income limits. How do you afford the bay area?
Just kidding, I don’t believe the bay area income hype. But if the choice is $5k tax sheltering vs. $23k, I choose $23k ($11k vs. $47k for married). Self employed would be nice… SEP-IRA $54k limit!!!
I don’t contribute that much to the IRA. The idea of not being able to touch large sums of money unless I reach retirement or face a penalty doesn’t sit well with me.
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If you need to deploy your capital quickly to real estate, that’s really the best excuse not to 401k. However, you can also get a flexible custodian (for extra $$) that will allow you to hold real estate in 401k.
There are ways to get 401k money out before retirement, but they don’t always pencil out (IRS Code §72(t)(1), roth conversion ladder, etc.)
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Having kids leads to drinking…
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Drinking leads to having kids. Plus it makes parenthood tolerable.
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“ Calculating based on what survey respondents said about their total savings to date, Apartment List estimates that only 21 percent of San Francisco millennials will able to afford a down payment on a home within the next five years.
It gets worse: That percentage declines to seven percent if buyers want to put down 20 percent instead of 10 percent. But it bounces up a bit to 25 percent if potential buyers’ student loan debt were removed from the equation.”
So student loan debt isn’t the biggest problem. You’d never guess that from all the discussion of it.
Student debt average is $30k. Nationally homes average $300k. Getting the down payment is a bigger issue than student debt. Especially in the BA where you need $200k min for a down payment. My guess is boomer parents are providing most of the money for down payments… leaving others behind. Only 2% of housing stock sells annually. Those with the cash will buy. Others will be left behind.
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