Here's How Much Money You Should Have Saved At Every Age

Bub

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http://finance.yahoo.com/news/heres-much-money-saved-every-141702355.html

When it comes to savings, Americans are falling short. Nearly 70% of adults have less than $1,000 in their savings accounts .

Retirement funds are looking equally bleak. In fact, about half of US families have zero retirement account savings .

"Particularly the younger generation likes to think, 'I'll save more when I'm making more.' But whether you're making $50,000 a year or $200,000 a year, we all have challenges saving," says Kimmie Greene, money expert at Intuit and spokeswoman for Mint.com.

"Because oftentimes what happens is, when people make more," she says, "they end up spending more."

The sooner you start saving — for retirement or any other major purchases you hope will be in your future — the better. After all, time is on your side when you're young, thanks to the power of compound interest.

While the amount you need in savings is highly personal, and specific dollar amounts can be arbitrary, Greene offers a simple formula to help you figure out if you're setting aside enough money.

In your 20s: Aim to save 25% of your overall gross pay, Greene tells CNBC. "That 25% is the combination of 401(k) withholdings, matching funds from your employer and any cash savings that you have," she notes. "It can also include debt repayment.

"Just make sure your lifestyle expenses don't exceed 75% of your gross income."

By age 30: Have the equivalent of your annual salary saved, Greene says. If you earn $50,000 a year, aim to have $50,000 in savings when you hit 30.

Again, this includes any retirement account contributions, matching funds from your company, cash savings, or money you have invested elsewhere, in index funds or robo-advisers.

By age 35: Have twice your annual salary saved.

By age 40: Have three times your annual salary saved.

By age 45: Have four times your annual salary saved.

By age 50: Have five times your annual salary saved.

By age 55: Have six times your annual salary saved.

By age 60: Have seven times your annual salary saved.

By age 65: Have eight times your annual salary saved.

Greene's timeline is similar to the one recommended by retirement-plan provider Fidelity Investments, which says a good rule of thumb is to have the equivalent of your salary saved by age 30 and to have 10 times your final salary in savings if you want to retire by age 67.

"While this can sound super daunting today, if you're putting that money to work starting in your 20s, it's not as difficult as it sounds," says Greene.

She also notes that "life is anything but linear," and it's impossible to follow this formula to a tee. You may have to adjust accordingly and save more or less in any given year, depending on major life events, such as having a kid or buying a home.

With retirement contributions I'm not as terrible as I thought. Still wish my liquid savings was better.
 

bimmer4life

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Depressing thread is depressing

Although I personally would aim to have even more in savings by retirement. I feel making 100k per year and only having 800k to live off of by retirement isn't enough in today's world.


Exactly. 800k with people now living into their late 80s and 90s. That 800k could go quick. I imagine I need double that. Sadly I am not on track FML.
 

Bub

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if you're doing anything, you're doing okay. We had a thread last year some time with a disturbing amount of "fuck it, i'm going to be working until i die so why save for retirement" posts

I feel like we discuss money a lot on here and I enjoy that.
"I just wish my supermodel wife made more than $150k a year and I knew what to do with all this money I have" -TCG
 

importcrew

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Have these fucks heard of student loans or kids? I spend like 1,600 per month between daycare and student loans!

My sister was paying about $1200/month in daycare alone a few years back. Enough for a mortgage. Luckily for her, the kids are old enough to all be in school now. Lol. I'm lucky enough that my wife has a business and works from home. So no daycare for us.
 

jason05gt

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Exactly. 800k with people now living into their late 80s and 90s. That 800k could go quick. I imagine I need double that. Sadly I am not on track FML.



It depends how the money is invested and how you have your money working for you. You could easily live off a combo of social security and $800K in the market making 7%.

Also at retirement your expenses should be much lower than they are now. Mortgages, expenses from kids, college should all be a thing of the past.
 

FESTER665

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I started my first 401K when I was 22. Didn't know what the hell I was doing with it at the time but now almost 10 years down the road, it def paid off...

I have one as well and need to get back into it. I had it for 8 years at the last job, but since that place closed it's just been sitting there with no contributions. It's been going up, just very slowly.

Need to contact Merrill Lynch and see what I can do one of these days.
 
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