Check this out! Gen Y's retirement: $2 million
So, apparently according to this article, Generation Y-ers need around $2M in Retirement! Seem impossible? It shouldn't, most of Generation Y (mostly those born in the 80's) are fully capable of saving at least $2M in retirement.
Perhaps my experience is limited, but almost everyone I know has financed a car, at one time or another. If you can finance a car, you can save $2M by the time you are 65; plain and simple.
Check out the math:
Lets say the average car payment in America is $350/month, although I have read that it is higher then that!
And you invest that $350 a month in an IRA or 401k making at least 10% annual return a year (reasonable estimate), in 40 or 35 years from age 25-65 or 30-65, respectively. On your 65th year you should have $2,213,427.85 or $1,328,823.32.
The idea is to save enough, so when you are in retirement you can pull out the growth (interest) on an annual basis and live off of that. For example, if you have $2M in the bank, and you earn 10% a year (on average) you can pull $200k a year out for living expenses.
Mind you these numbers are simple in that they don't include an employer match or inflation. My point is that it doesn't take much to re-set the trajectory of your financial plan.
Just something to think about...if you can afford a Tahoe or Camry payment you can afford retirement.