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On Retirement Savings (sh.itjust.works)

submitted 1 year ago by akilou@sh.itjust.works to c/personalfinance@lemmy.ml

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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!

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[–] cabbagee@sopuli.xyz 14 points 1 year ago* (last edited 1 year ago) (7 children)

The FIRE way is 25x the salary you want to have in retirement. If you're in the US, make an account with the SSA to check your estimated social security benefits. Take the number with a large grain of salt.

Truth be told, it's all pretty bleak. I save and invest 50% of my income but when I do the numbers for retirement I'll still be retiring ~65. Personally I'm a skeptic and don't factor in social security, though. The depressing reality is if you're saving for retirement then you're already better off than most.

[–] exploding_whale@lemmy.ml 3 points 1 year ago

FIRE is based on 25x expenses, not income. The difference is particularly important for FIRE folks since they tend to save a much greater portion of their income rather than spending it.

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