this post was submitted on 14 Oct 2023
50 points (96.3% liked)

Personal Finance

3819 readers
1 users here now

Learn about budgeting, saving, getting out of debt, credit, investing, and retirement planning. Join our community, read the PF Wiki, and get on top of your finances!

Note: This community is not region centric, so if you are posting anything specific to a certain region, kindly specify that in the title (something like [USA], [EU], [AUS] etc.)

founded 1 year ago
MODERATORS
WandererLagomorph799@lemmy.ml
nieceandtows@programming.dev
nieceandtows@lemmy.ml
50
On Retirement Savings (sh.itjust.works)
submitted 1 year ago by akilou@sh.itjust.works to c/personalfinance@lemmy.ml
26 comments fedilink hide all child comments
 

I'm almost 40 and according to the wisdom found everywhere on the internet, I don't have enough saved for retirement. Which worries me because I've been saving for as long as I've had a proper job with access to a retirement vehicle. But also because the internet wisdom doesn't make sense or sound feasible.

According to what I've read, you're supposed to have:

  • 1x your income when you're 30
  • 3x your income when you're 40
  • 6x at 50
  • 8x at 60
  • 10x when you retire

I'm almost 40 and I have just barely over 1x saved. So it feels like I'm 10 years behind. However, my income has grown substantially over the course of my 30s, more than doubling. So accounting for growth in income, I do have almost 3x my salary in my late 20s. But similarly, the above advice could be interpreted as needing 6x the income you had when you were 30 by they time you're 40. And by that metric, I'm doing even worse!

you are viewing a single comment's thread
view the rest of the comments
[–] sugar_in_your_tea@sh.itjust.works 1 points 1 year ago

You can't do 4% withdrawals forever, especially not inflation adjusted. That number is intended to have a 95% chance of success in a 30 year retirement. If that fits your situation, then it's a good number to use.

I personally use about 3.5% because I want some longevity insurance. My mom's parents lived into their 90s, so a 30 year retirement is cutting it a bit close, and I want the option to retire early.