For most Americans retirement depends on compound interest. Most of us don't have pensions to rely upon and you really can't retire upon whatever amount you put away in your 401k--you need those dollars to grow faster than the rate of inflation for a couple of decades.Then, you may perhaps have enough to retire when you reach your mid 60s.
The last decade has been anemic, with stock returns barely keeping pace with inflation. This is a real problem for people in their mid 40s, like me. Those who are a decade older enjoyed most of the boom time in the 1990s and had enough money to enjoy those gravy years; most of my age peers were just starting out and didn't have enough put away to enjoy those 20% years.
Those who are now in their 30s have plenty of years ahead of them and frankly would be better off just slugging that 15% into their 401k during a stagnant stock market. Time is on their side.
But, investors like me are running out of years for compound interest to even have a shot at doing some magic. People may be working, and they may be earning. But, I don't think many have really done the retirement math--this is a problem that we won't be able to outrun.
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