I can't stand 401k conversations. Reality check
people. Sure, it is nice to know that when you are
sixty, or even sixty-five, that your 401k nest egg is
going to be worth a whopping $1.5 or less for
Well when you take that fat egg out in 2036, you get
taxed accordingly on that $1.5 million. I wonder if
taxes will be more or less in the year 2036? I will bet
that they will be higher. So, it is 2036 and you have just
got taxed on your $1.5 million, so not let us assume
you have around 700k. Not bad! Or is this a delusion
Did you ever consider future inflation adjustments
into the entire 401k scheme? No, because you were too
busy looking at those happy elders on the cover of the
401k brochure who are millionaires. And you are going
to do the same. But you forget about the tax on that
$1.5 millions, so you really have 700k. Not such a
millionaire after all.
Now, 700k still sounds like a lot of money, because
today, you can buy a 1000 square foot salt-box house
in shoddy Sacramento (on the other side of the tracks)
with leaky pipes and broken toilet. And a loaf of
bread is only $2.99 and a gallon of gas is $3.10 a
Okay, back into the time machine and it is now 2036. And
you have that 700K. And that 700k home in shoddy
Sacramento on the other side of the tracks (still has
that damn broken toilet and leaky pipes), is now worth
a huge and outrageous amount of 1.8 million! Wow!
But a loaf of bread is $9.50, a gallon of gas (if you
can still get some) is $15.90 a gallon, and a
round-trip plane ticket from San Francisco to New York
is $2,100.00 (and that is on JetBlue) and a pack of
smokes is $13.99 -- you started smoking because you
thought you were going to be a millionaire living the
high-life at ripe old 60 or 65, but in fact, you are
basically forced into a 30 foot trailer in New
Orleans, on the other side of the tracks, and you are
eating hotdogs for dinner until you teeth fall out.
I am 35. And I remember 25 years ago, when I was 10, a
candybar was 25 cents. It is now over $1.00.
Last edited by Laszlo; 04-19-2006 at 11:26 AM.