A version of this question is often asked: how much money do you need to retire? Let's make a simple yet believable calculation.
The main expenses you incur are housing, transportation and healthcare. The prices change over time: transportation gets cheaper, housing depends on where you want to live (can find cheap options), but price of healthcare seems to be growing, and in fact much faster than the inflation rate. Which makes you wonder why do they define inflation rate as they do. So let's focus on healthcare. If you save money by putting it in the stock market, your wealth grows approximately as fast as the healthcare prices, so you can use the nominal value on your paycheck and add it up over the years you work. Specifically, you add up the amount you manage to save. And then you compare it to the amount Americans spend on healthcare today per person per lifetime (~300k$). This is how much you need to save. So saving up 1k$ a month, you need to work 25 years to provide for yourself and just yourself. Of course, that implies that you take advantage of all the retirement benefits of your work, insurance and social support. And also move to the place in US with the cheapest housing and living expenses. So we get the right ballpark. You're spending about 4 times more than that, so total per lifetime in US you will spend 1.5M$ per lifetime. That is just for an average job. Many people struggle to reach this number, and enter and endless circle of exploitation by companies.
Now another important question: when do you actually want to work those 25 years? Do you want to spend your 20ies and 30ies working and then spend your time with kids in the 40ies and 50ies? Would you rather party away the 20ies and see little of your kids in your 40ies? Would you prefer to work 40 years but not too hard or 25 years very hard, and then retire at 40? Would you not stop at 40 and keep working hard to earn a better, more comfortable living conditions, like many Americans do?
The main expenses you incur are housing, transportation and healthcare. The prices change over time: transportation gets cheaper, housing depends on where you want to live (can find cheap options), but price of healthcare seems to be growing, and in fact much faster than the inflation rate. Which makes you wonder why do they define inflation rate as they do. So let's focus on healthcare. If you save money by putting it in the stock market, your wealth grows approximately as fast as the healthcare prices, so you can use the nominal value on your paycheck and add it up over the years you work. Specifically, you add up the amount you manage to save. And then you compare it to the amount Americans spend on healthcare today per person per lifetime (~300k$). This is how much you need to save. So saving up 1k$ a month, you need to work 25 years to provide for yourself and just yourself. Of course, that implies that you take advantage of all the retirement benefits of your work, insurance and social support. And also move to the place in US with the cheapest housing and living expenses. So we get the right ballpark. You're spending about 4 times more than that, so total per lifetime in US you will spend 1.5M$ per lifetime. That is just for an average job. Many people struggle to reach this number, and enter and endless circle of exploitation by companies.
Now another important question: when do you actually want to work those 25 years? Do you want to spend your 20ies and 30ies working and then spend your time with kids in the 40ies and 50ies? Would you rather party away the 20ies and see little of your kids in your 40ies? Would you prefer to work 40 years but not too hard or 25 years very hard, and then retire at 40? Would you not stop at 40 and keep working hard to earn a better, more comfortable living conditions, like many Americans do?
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