logo
‘$1M? That's it? No, thank you': Ramit Sethi challenges the retirement advice most Americans follow

‘$1M? That's it? No, thank you': Ramit Sethi challenges the retirement advice most Americans follow

Yahoo07-02-2025

It's the advice you hear passed around like a family recipe: Work hard, save consistently, and one day you'll retire comfortably. But what if this so-called tried-and-true advice is far from a recipe for success and more like a blueprint for disappointment?
Ramit Sethi, bestselling author of I Will Teach You to be Rich and Money For Couples, didn't hold back as he reflected on what he considers the worst financial advice he has ever received.
A near-record number of Americans are grappling with $1,000 car payments and many drivers can't keep up. Here are 3 ways to stay ahead
5 ways to boost your net worth now — easily up your money game without altering your day-to-day life
Cost-of-living in America is still out of control — use these 3 'real assets' to protect your wealth today
'Get a job at an industrial company and work there for 40 years so that I can retire with $1M in the bank,' he told Moneywise. 'I was like $1 million? That's it? No, thank you!'
The old axiom about saving $1 million for retirement hasn't changed much.
Today, many Americans think they'll need $1.46 million to retire comfortably, according to a Mutual Life study. But Sethi rejects any such advice.
Sethi says the issue isn't just oversimplified math but the mindset it fosters: grinding away for decades only to scrape by on a fixed budget in retirement.
For one thing, he argues that by focusing solely on saving and not spending money meaningfully, people miss out on living a rich life. He thinks it's too long to wait till retirement, especially when the average age of retirement is creeping up, standing at 61, up from 57 in the 1990s, according to a 2022 Gallup poll.
When many Americans finally do retire, their visions of their golden years — leisure, frequent travel, and freedom from the constraints of a 9-to-5 — clash with financial reality. According to the Federal Reserve, households headed by those aged 45-54 have an average retirement account balance of $313,000, far from what's needed for a secure and fulfilling retirement.
This disconnect is why Sethi encourages people to rethink their financial approach, shifting the focus from reaching milestones to developing a strategy that builds wealth over time.
Read more: Rich, young Americans are ditching the stormy stock market — here are the alternative assets they're banking on instead
While a $1-million retirement goal might seem out of reach, there are steps you can take to build a stronger financial future. One approach Sethi encourages is harnessing the power of compound interest
'The power of compounding is something that is truly hard to understand until you see it over and over again,' Sethi explains.
Compound interest works by allowing your money to grow not just on your initial contribution, but on the accumulated interest as well – creating a snowball effect over time. For example: A 35-year old investing $300 per month with a 6% annual return would have $301,355 by the age of 65. But if that same person started earlier, at age 25, investing the same amount every month, they'd end up with hundreds of thousands more: $597,337, nearly double.
Even though the late investor only contributed $36,000 less in total, they lost out on the exponential growth that comes with compounding over decades.
However, it's not just about starting early. Maximizing contributions to tax-advantaged accounts like 401(k) or IRAs, taking full advantage of employer matching programs and diversifying your investments can boost your retirement savings. Taking full advantage of employer matching programs is practically 'free money' that can supercharge your savings.
Don't minimize the value of budgeting , which can free up more cash to invest.
With consistent effort, thoughtful planning, and focus on long-term growth, building the retirement of your dreams is well within reach.
I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 5 of the easiest ways you can catch up (and fast)
'Savers are losers': Robert Kiyosaki warned that millions of 401(k)s and IRAs will be 'toast' — here's his advice for older Americans who want to protect their wealth
Suze Orman: If you think you're ready to retire, think again — 4 critical money moves to avoid a financial crisis in retirement
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Elon Musk Took A $113 Billion Hit Over Trump's DOGE Mission: Calls It 'Worth It'
Elon Musk Took A $113 Billion Hit Over Trump's DOGE Mission: Calls It 'Worth It'

Yahoo

time20 minutes ago

  • Yahoo

Elon Musk Took A $113 Billion Hit Over Trump's DOGE Mission: Calls It 'Worth It'

A fan page of Vice President JD Vance asked Americans on social media whether they would thank Elon Musk after the Tesla Inc. (NASDAQ:TSLA) CEO reportedly lost $113 billion while leading government efficiency efforts. Musk responded Tuesday with a simple 'Worth it' on X. What Happened: The fanpage wrote: 'Elon Musk lost 25% of his fortune, approximately $113 billion, while leading efforts to streamline the U.S. government. Are you willing to give Elon Musk a heartfelt 'thank you'? A. Hell yes B. No.' Bloomberg and Forbes data confirm Musk's net worth dropped approximately $113-121 billion during his 2025 Department of Government Efficiency (DOGE) role. Tesla's stock price suffered as investors questioned Musk's divided attention between his companies and government work. Trending: Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — The wealth decline stems from multiple factors beyond Musk's political involvement. Market competition and potential Trump administration tariffs have pressured Tesla's valuation. Tesla stock represents Musk's primary wealth source, making the company's performance critical to his net worth. Why It Matters: The exchange comes amid escalating tensions between President Donald Trump and Musk. Trump has privately called Musk a 'big-time drug addict' in conversations with allies, according to The Washington Post. The feud intensified after Musk criticized Trump's budget legislation and suggested impeachment, while Trump threatened to cancel federal contracts with Musk's companies. The dispute has implications for Musk's SpaceX and Tesla operations, particularly regarding federal contracts. Trump withdrew NASA administrator nominee Jared Isaacman, Musk's preferred candidate, further straining relations between the billionaire and the administration. Read Next: Are you rich? Here's what Americans think you need to be considered wealthy. These five entrepreneurs are worth $223 billion – they all believe in one platform that offers a 7-9% target yield with monthly dividends Photo courtesy: Joshua Sukoff / Up Next: Transform your trading with Benzinga Edge's one-of-a-kind market trade ideas and tools. Click now to access unique insights that can set you ahead in today's competitive market. Get the latest stock analysis from Benzinga? This article Elon Musk Took A $113 Billion Hit Over Trump's DOGE Mission: Calls It 'Worth It' originally appeared on

Analyst who nailed Tesla's crash issues stark warning
Analyst who nailed Tesla's crash issues stark warning

Yahoo

timean hour ago

  • Yahoo

Analyst who nailed Tesla's crash issues stark warning

Analyst who nailed Tesla's crash issues stark warning originally appeared on TheStreet. Veteran crypto investor Tuur Demeester, known for his insightful macro analysis and prescient investment calls, has issued another warning regarding profound structural changes unfolding within the global financial system. Tuur Demeester called the decline in TSLA stock well in advance in 2022, telling investors to swap the TSLA stock for BTC, five months later and TSLA lost 53% of its value against BTC, so he was right to go contrarian. In a detailed post published on X on June 11, Demeester speculated that we are witnessing a seismic shift away from the dilution and debasement characteristic of fiat-based capital, toward forms of scarce, work-based value, such as Bitcoin. To support his thesis, Demeester included a chart juxtaposing Bitcoin's price against a leading bond market index. This metric continues to trend upward, reflecting the rising opportunity costs associated with holding currencies disconnected from hard work and scarcity. Demeester's warning parallels the decline of the dollar. At the time of writing, on June 11, the U.S. Dollar Index (DXY) hit multi-month lows of 98.6, with investor faith in the fiat money supply waning amid ongoing inflation and escalating debt levels. Demeester's framing is that assets such as Bitcoin, scarce, decentralized and unencumbered by political risks of debasement, continue to rise up in the face of traditional debt-based financial instruments. This devaluation, compounded by structural tax-policy changes that disproportionately benefit the wealthiest Americans, especially as coined by Australian economist Justin Wolfers, is reminding people that fiat currencies are increasingly a question mark. Interestingly, US Treasury Scott Bessent proposed today that stablecoins can lock the dollar dominance as a counter to dollar devaluation. Analyst who nailed Tesla's crash issues stark warning first appeared on TheStreet on Jun 11, 2025 This story was originally reported by TheStreet on Jun 11, 2025, where it first appeared. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

Social Security cost-of-living adjustment may be 2.5% in 2026, new estimate shows
Social Security cost-of-living adjustment may be 2.5% in 2026, new estimate shows

Yahoo

timean hour ago

  • Yahoo

Social Security cost-of-living adjustment may be 2.5% in 2026, new estimate shows

The cost-of-living adjustment for Social Security could be 2.5% in 2026, based on the latest inflation data, new estimates show. That's up from last month's estimate of 2.4%, said Mary Johnson, an independent Social Security and Medicare policy analyst who forecasts 2026 COLA using monthly inflation data. A 2.5% increase would be the same gain beneficiaries received this year, but there's still time for the 2026 estimate to rise because the full impacts of President Donald Trump's tariffs are still unknown. "This estimate may rise with four more months of data still to come in before the 2026 COLA will be announced in October," Johnson said. Even though May inflation remained tame, most economists predict Trump's tariffs will raise inflation, which in turn, boosts the COLA. "Another month goes by with little evidence of tariffs, but the longer-term inflation challenge they pose remains," said Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management. Ken Kim, senior economist at KPMG, sees inflation peaking above 4% annually in the fall. That would be sharply higher than the 2.4% annual increase in the May consumer price index, a measure of average changes in goods and services costs. The average monthly Social Security check in May reached a record high $1,948.17. Based on that, a 2.5% increase would raise the monthly benefit by about $40.70. Roughly 75 million Americans, or about a fifth of the population, receive Social Security benefits. COLA is an annual adjustment to benefits meant to keep beneficiaries' purchasing power from being eroded by inflation. The final COLA for the following year is typically announced in October by the Social Security Administration. COLA is based on the percentage increase in the consumer price index for Urban Wage Earners and Clerical Workers from July through September of the last year as compared to the same three months of the current year. CPI-W tracks the overall inflation rate but can differ slightly. In May, annual CPI-W rose 2.2%, compared with the 2.4% rise in overall consumer prices. Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at mjlee@ and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning. This article originally appeared on USA TODAY: Social Security COLA may be 2.5% in 2026, but tariffs could lift it

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into the world of global news and events? Download our app today from your preferred app store and start exploring.
app-storeplay-store