No. of Recommendations: 1
How about this:

$20,000 growing at 10%/year will reach $1.25M or so in 42 years.

IF YOU ASSUME:
1. that the future LONG TERM returns in the stock market will continue to be about the same as in the past...then 10% in an index mutual fund is do-able.

2. that 'retire-ment age' is 65 years of age... then age 23 is 42 years prior.

3. that 'saving' $20,000 by age 23 or 25 is do-able

THEN...
Starting with a person's FIRST paycheck...let's divert 1/2 of the SS and 1/2 of the income tax paid to an Index Mutual Fund, until that person has saved $20,000 OR has reached age 25.

There might even be a clause that allows continued contributions... and I suppose there would have to be some thought about college graduates and their age/benchmarks.

Upon reaching the 'benchmark', the wage earner (now earning more $$) would pay SS and income tax in the normal amount paid for 'being a member of society'.

This would allow individuals to have a 'nest egg' that potentially would grow to meet her/his future needs.

What do you think?
ralph
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