As you navigate through life, it’s likely your goals will change and evolve, both personally and financially. But, no matter what stage of life you’re in, one thing will always remain the same: You’re never too young — or too old — to save money.
You won’t find any hard and fast rules regarding exactly how many dollars you should save based on your years on the planet. But using your age (or a nearby range) can be a helpful guidepost when calculating an estimate of how much money you should save for various life events. Just remember: Don’t get discouraged if you need to hit pause or fall behind. You can always get back on track.
Aiming for an ideal amount to set aside (or verifying that your super-saver tendencies have you on track) can help you better prepare for whatever the future holds, such as:
1. Emergencies (like a natural disaster or unforeseen medical troubles)
2. A comfortable retirement
3. Pursuing your dreams (a new house, your child’s college education)
4. Prioritizing your goals
Whether you’re fresh out of school, well into your career, or forging your own path through life, it’s never too late to get started saving or to check to see if you’re heading in the right direction.
So, how much money should you have saved?
First things first: There isn’t a one-size-fits-all number. It’s important to keep in mind that savings — and savings goals — are subjective to your lifestyle. That includes everything from your income and the way you like to shop, to where you live, if you have a car, if you’re raising kids, pay rent or have a mortgage, and more. Everyone has their own magic number. It just takes a little bit of math and insight to figure out yours. That’s why we consolidated several tools and benchmarks for you in this guide to help you get started.
Because so many factors come into play, don’t be discouraged if your savings account doesn’t look like the examples provided. The numbers are based on national average and median income and spending data — and may not reflect your lifestyle!
Everyone is different, but if you’re wondering, “How much should I be saving for my lifestyle?” let the following savings by age benchmarks and tools act as a guide to help take some of the guesswork out.
Savings for Emergencies by Decade
Fast Answer:
- An emergency savings account should ideally hold three to six months’ worth of expenses in easy-to-access cash.
- To keep your emergency savings accessible, consider an online savings account (not a CD or investment account).
- Use our emergency savings account calculator to see how much you should save per month to reach your personal emergency fund goal.
It’s inevitable: Life throws you financial curveballs.
That’s when your emergency fund can save the day.
An emergency fund is cash you set aside in a savings account only for unexpected expenses. If your dog swallows a chew toy and needs a trip to the vet, for example, or your car breaks down and needs a new transmission, the funds in your emergency account can pay for those just-in-case moments.
According to Bankrate, only 39% of Americans have enough cash on hand to cover a $1,000 emergency. If you haven’t started building your cushion yet, there’s no better time than the present.
Ideal Emergency Fund by Age
Your emergency fund should contain 3 to 6 months’ worth of expenses. Considering that the average 25 to 34 year old spends $4,705 each month…
| By Age... | Ideal Savings Balance* |
|---|---|
| 30 | $14,115 to $28,230 |
| 40 | $17,799 to $35,599 |
| 50 | $18,846 to $37,693 |
| 60 | $16,554 to $33,108 |
| 70 | $14,067 to $28,134 |
| 80 | $10,794 to $21,588 |
*The amount you should save will vary, based upon your monthly expenses.
The ideal size of your emergency fund will likely fluctuate throughout your life based upon your monthly expenses. Rule of thumb? Aim to have at least three to six months’ worth of expenses set aside.
According to the 2018 Consumer Expenditure Survey, the average 25- to 34-year-old spends $4,705 each month on both essential and nonessential expenses (including rent or mortgage, insurance payments, auto financing, and more), so the average 30-year-old should have between $14,115 to $28,230 tucked away in accessible savings.
Keep in mind these numbers are based on national averages from the U.S. Bureau of Labor Statistics and may not resonate with your lifestyle, as everyone’s situation is different. If you rent an apartment, don’t have children, and don’t drive a car, your emergency fund can likely stand to be a lot lower than someone with a mortgage, children in school, and monthly car insurance payments, for example.
The best way to figure out an emergency fund goal that makes sense for you is to track your own spending for a few months to see how much you actually need month-to-month. Another method for mapping out an emergency fund goal that’s more specific to your unique financial situation is to plug your numbers into our emergency savings account calculator. You’ll even get an estimate of how long it will take to reach your goal based on how much you put away each month.
Where you keep your money is also important. An emergency savings account should be kept in a deposit account that earns interest and is liquid (like our Online Savings Account), instead of a certificate of deposit (CD) or an investment account.
Why? It’s simple. Your emergency savings needs to be accessible.
With most CDs, you may have to wait until its maturity date to pull money out. Or, if you withdraw it early, you may have to pay a penalty. Drawing money out of an investment account could also trigger tax consequences, plus it usually takes several days before the cash hits your bank account.
Keeping your emergency fund in a savings account that earns a competitive interest rate means you don’t have to jump through any extra hoops to get cash when you need it. Plus, your money will earn interest at a competitive rate — meaning it’s growing all the time.
Expert Tip: Three to six months’ worth of expenses can feel like an overwhelming savings starting point, especially if you’re living on a tight budget. Remember it’s perfectly okay to start with a smaller savings goal, whether it’s one month of expenses, a $1,000, or even $100. Any little bit you can put away will add up! Then, use our calculator to find out how much you need to save to reach your ultimate goal.
Retirement Savings in Your 30s and Beyond
Fast Answer:
- A general rule of thumb is to have one times your income saved by age 30, twice your income by 35, three times by 40, and so on.
- Aim to save 15% of your salary for retirement — or start with a percentage that’s manageable for your budget and increase by 1% each year until you reach 15%
- User our retirement savings planner to see how you compare to other retirement savers.
When it comes to saving for retirement, the early bird gets the worm. The sooner you start saving, the longer you have to take advantage of the power of compound interest, which is the interest you earn on your original principal and any accumulated interest.
According to this survey, 64% of Americans could potentially retire broke because they lag behind on saving. Like we mentioned earlier, a general rule of thumb is to have one times your income saved by age 30, two times by age 35, three times by 40, and so on.
Let’s consider an example using data from the U.S. Census Bureau. According to 2018 data, the median household income is $61,937 (though this varies state-by-state). Based off this number, a 50-year-old should have a retirement savings account of about $310,000, if you stick to that plan.
Ideal Savings for Retirement by Age
The amount you should save for retirement is based upon your age and your income. For example, it is recommended that a household earning the U.S. median of $61,937 save the following:
| By Age... | You Should Have Saved... | Which Translates to... |
|---|---|---|
| 30 | 1x your income | $61,937 |
| 40 | 3x your income | $185,811 |
| 50 | 5x your income | $309,685 |
| 60 | 7x your income | $433,559 |
| 70 | 9x your income | $557,433 |
| 80 | 11x your income | $681,307 |
Remember, these numbers are examples based on estimated household earnings. When using this pattern, the amount you should save for your own retirement will vary based on a few things:
- your income
- your planned retirement age
- the kind of lifestyle you want to have in retirement
In other words, if you want to retire at age 62 and travel the world, you might need a bigger retirement account than if you plan to retire at 70. Plugging the numbers into a retirement calculator, like Bankrate’s, can give you an idea of whether you’re on pace with your savings progress.
In a perfect world, starting in your 20s and until retirement, you would put aside 10% to 15% per paycheck in your 401(k), 403(b), or a similar tax-advantaged retirement account, like an IRA.
But you may be starting a new career, paying back student loans, or have other financial obligations and aren’t able to save 15% of your salary all at once. If that is the case, start with a percentage you’re comfortable with and increase your savings rate gradually by 1% each year until you reach the 15% mark. If you’re getting a 1% annual raise at the same time, you won’t even miss the extra money from your paychecks.
If you are currently paying back loans or other debts, don’t panic. If you have room to save for retirement at the same time, that’s great — aim to put away what you can while sticking to your loan repayment schedule. Once you’ve paid off a debt (like a car loan, student payments, credit card debt, etc.) consider transferring that monthly payment amount toward retirement instead.
Expert Tip: You can turbocharge a 401(k) by saving enough to qualify for your employer’s full match (if one is available). For example, if you set aside 5% of your annual paycheck in your 401(k) and your employer matches 100% of your contributions up to 5%, the annual contribution to your retirement fund will be 10% of your yearly salary. Employer-sponsored retirement programs differ, so check with your employer for eligibility.
If other financial constraints keep you from saving until later in life, consider taking advantage of what’s called a “catch-up contribution.” Some plans let you to make an extra yearly contribution to your tax-advantaged retirement account once you hit age 50. (The amount allowed is determined by the IRS)
When saving for retirement, automate monthly transfers from your checking account to a savings account or an IRA (if it makes sense tax-wise) for a hassle-free way to watch your retirement savings grow. And remember to check in on your savings (ideally, at least once a year) to see how your efforts are paying off.
Finally, don’t forget about Social Security, which you may qualify for starting at age 62. These monthly payments, as well as another retirement account, like an Individual Retirement Account (or IRA), can be used to supplement your retirement savings.
Saving for Future You: Family, Fun, and More
Fast Answer:
- The costs for larger life expenses, like new homes, cars, weddings, children, etc. vary.
- Research the average cost of these expenses and use our savings goal calculator to help set your savings goals and plans.
- Prioritize your savings when aiming to save for multiple large expenses at once.
As you make progress saving for (not so fun) emergencies and retirement (the end goal), you’ll probably have other goals in the interim that’ll require saving up cash to accomplish.
Maybe you’re renting now and want to become a homeowner — which means you’ll need cash for a down payment and closing costs. Or you’re in a serious relationship and would like to put a ring on it. Or maybe there’s a baby in a baby carriage on the horizon. You’ll want to start saving for college (and lots and lots of diapers).
And that’s not all. You might one day hope to refurnish your living room, upgrade to a more spacious vehicle, or splurge on your dream vacation — Saint-Tropez, anyone?
Of course, saving for these items will vary. But looking at the average cost of each expense can give you an idea of how much you need to set aside.
Savings for Celebrations, Cars, Kids, and More
| If You're Saving For... | Plan to Save... |
|---|---|
| A vacation | $1,979/person |
| New furniture | $8,176 |
| A car | $20,000 to $55,000 |
| Down payment for a home | $15,930 to $63,720 |
| A wedding | $33,931 |
| College for your kids | $35,160 to $203,600 |
Expert Tip: The amounts above are based on averages, meaning the actual amount you’ll need to save will probably differ, depending on the circumstances. For example, the cost for a two-week vacation in Hawaii will be drastically different than a weekend getaway to your local state park.
Also some, like saving for furniture or a vacation, may be short-term financial goals. But others — a down payment on a house, a wedding, or college, for example — might take a little longer. When you’ve got so many goals, it’s understandable if you don’t know where to start.
Prioritizing can help.
Say you want to get married in the next two years and purchase a home three years after that. You can afford to save $1,500 a month towards both items. In this instance, you might sock away $1,000 each month for the wedding and $500 for the down payment on a house. After you say, “I do,” you can redirect that $1,000 over to your home savings fund.
The buckets tool in our Online Savings Account can help you organize your savings goals into separate digital envelopes, eliminating the need to open multiple savings accounts for your various savings priorities.
Expert Tip: Prioritizing keeps you from stressing over not saving enough for all the things you want to do with your money. And if you’ve got a plan for saving toward multiple goals, it reduces the chance that something slips through the cracks.
Remember that when you’re saving money, any little bit counts. If you aren’t able to put away larger chunks of cash at a time, like $500 or $100 or even $50, that doesn’t mean saving is out of the question. By using microsaving strategies (or stashing away small amounts of money, usually less than $2 at a time), you can consistently add to your savings without the pressure of putting big amounts away all at once.
One last piece of advice? No matter your age, put your savings on autopilot, whether it’s for retirement, a road-trip, or a new home. By automatically diverting a portion of your paycheck, initiating recurring transfers into your respective savings accounts, or using the Surprise Savings booster in our Online Savings Account to help you microsave, you can ease some of the stress of reaching your goals. Plus, when you set it and forget it, spending your cash becomes much less tempting.
When mapping out your financial future, age may act as your savings compass. Let it point you in the right direction, but don’t panic if your path is different from everyone else’s. It’s never too soon or too late to start saving, and with defined goals and a plan, you can get your savings on track.
One savings account, multiple savings goals. Customize and organize all your financial priorities with our Online Savings Account.
Comment on this article
Comments
D M. on November 24, 2019 at 4:04pm
Where do people work to meet all if these savings and retirement goals? Shit, I'd have to save my entire salary. Age 37 now. Age 35 I did have about $30,000 that got used on our newly purchased home (electrical roof, etc.) Only about 20k fir retirement as kost of my 20s I only made about 25k a year. Most of that was set aside while I was out if countrybin the Army making some extra cash. So... how does one "catch up" when closing in on age 40? I would be saving an additional 500 bucks a month, but paying my wife's student loans off instead.
KJ G. on February 24, 2020 at 7:57pm
In response to DM, the key is to start EARLY, and start adult life by making your savings your first expense paid of every month. If your income can't cover savings when you leave the nest...it's not time to leave the nest yet. Or, get enough roommates to cover the difference. I did not have a high income when I started working, and I still earn under $100K/year, but I'm on track for retirement. Not having student loans helped more than I can say.
Ally on March 2, 2020 at 2:14pm
Thanks for the comment, KJ. Keep up the great work.
virginia t. on March 8, 2020 at 2:45pm
I found as a almost 70 y/0 woman, divorced, single to consider the amount I should be saving at age 70. I've saved more than that already, and I'm happy to know that I'm in a pretty good place financially. Time really does fly! I'd like to thank you ALLY for the info re: age appropriate savings... as it really got my attention,!!!
Tom on March 12, 2020 at 4:43pm
This is backwards! 80 percent of people are just trying to survive this virus and the financial situation it has caused them.
CRL on March 12, 2020 at 9:10pm
Wow, 14,000 + emergency fund for those of us in our 30s. With our student loan debt ,to say the least, sounds like we have to eat rice and beans every day for umpteen years to get there while our taxes are sucked dry without any guarantee we’ll ever see our social security. Unrealistic overall, and I’m blessed to have stable income . Depressing , unattainable numbers and goals. Your effort is appreciated but reality has to be; and should be addressed.
Ally on March 13, 2020 at 7:39pm
We love hearing this, Virginia! Thank you for the comment. 😊
Clueless W. on March 29, 2020 at 10:49am
It is not easy to get by in this world, I think a large majority can relate to that. High paying quality jobs are few and far between. Living costs are astronomical and only getting worse. The job market is plentiful but with medicore to low quality jobs with company's who could care less about you. This is life and the adversity we face everyday and need to overcome. It's what you do with your life, your ambition and passion to better yourself and succeed that determines your future. You need to set goals get out there and push yourself. Don't settle for any job go above what you think you can and aim higher for yourself. Research career paths, study fields that pay well and don't require degrees or formal educations. There are many jobs in technical field, construction and trades that pay well above the national average. Stop feeling sorry for yourself and making excuses, or saying you can't do it or it's impossible. The key to saving is discipline. It doesn't matter when
M on April 1, 2020 at 7:27pm
Must be for the top 5% rich people
D. on May 9, 2020 at 1:27pm
Thanks for the article, I found this to be a very helpful breakdown.
Ally on May 9, 2020 at 1:33pm
We’re happy to hear this. Thanks for reading.
Toni G. on May 14, 2020 at 4:01pm
Thank you for this article, it is very informative and an eye opener. I have to say, discipline plays a big roll on starting a life of saving money. And, yes! Saving money is a life goal, if you want to get there. Getting rid of all the excuses and additional expenses that you don’t need will help you get there. I’m a single mother of 2, and have been saving since I was 19. It is hard in this economy but it is also possible!!
Ally on May 26, 2020 at 3:54pm
Thanks for sharing, Toni. 😊
Alex on June 2, 2020 at 7:31pm
How on earth is the average 25-34 year old spending $4,705 a MONTH? That comes out to spending $56,460 a year. Not *making* that much per year, just spending! That blows my mind. I'm 35 and I only make around 48k a year before taxes. And naturally after taxes, health insurance, and retirement contributions, I take home way less than that. If I spent anywhere close to $4,705 a month, I'd be drowning in debt.
Ryan on June 15, 2020 at 9:08pm
Maybe I'm thinking wrong, but it seems to me that the value of money and savings is irrelevant. Assets/stocks are the most important aspect when it comes to saving and retirement. Cash is nothing if its not being put to use.
NormalGuy on June 18, 2020 at 1:12pm
It's unfortunate to see many people saying that these baselines are unrealistic, there seems to be a problem with the financial/ career education in the United States. People are taught, just go to college and you'll get great jobs, it's just not true. For the people who pick the right degree and start making good money, most those people don't know how to be responsible with their money. Through self education and a very inquisitive nature I gained proper knowledge to pay my bills, deal with student loans, and save, all at the age of 21. I'm not some special case or one of those 21 year olds who make millions, I just educated myself and in my opinion that's all that people need to navigate the murky world of finances. At 21 I have already exceeded the "by 30" category and I lead a very happy life (in a very expensive cost of living area), I'm not here to brag, I'm here to give people hope. It's possible, we can all do it.
Bat V. on June 25, 2020 at 5:08am
I took personal loans for total amount of 300 000 i “spend” all the money I’ll file for bankruptcy by age of 36 I’ll be all clean with fresh cash in pocket have to love American credit sistem.
kumar on July 2, 2020 at 12:20pm
The analysis does not take into consideration of the savings/equity in the primary home.
E on July 6, 2020 at 2:27pm
I agree with Alex. There's no way people in that age bracket are spending over 4 grand a month. Please explain how you came to that conclusion?
ruben r. on July 13, 2020 at 11:19am
58
Yvonne L. on July 19, 2020 at 7:16am
NetBank account $63,720
Caitlen on August 2, 2020 at 12:18am
I’m 30 and don’t make 4,000 a month, so I’m definitely not saving that amount! Even with my boyfriend’s income we both don’t make that amount and rent is higher near Chicago. I’d need a separate income just to save that much and there aren’t enough hours in the day. I save what I can and don’t even have student loan debt, children, or a monthly car payment as I bought in cash a used vehicle. So yeah, this is pretty unrealistic. Additionally, who pays over 8k for furniture? That’s a rip off! These numbers must be for those blessed making 100k a year. Must be nice.
NH on August 13, 2020 at 5:57pm
Why don't you consider Social Security? This calculation will not look so scary if you subtract Social Security (for which almost all who work will be qualified) from monthly savings. According to this calculation, the goal of all young people should be saving every penny and do not enjoy life, which is not true!!
Dr. C. on August 20, 2020 at 4:09pm
I think it might be better to use the median income in the analysis instead of averages. Averages can be really skewed by few ultra-rich people. Anyways thanks for the breakdown.
Ricardo on August 30, 2020 at 11:23am
I appreciate the article. Since this is what "should" be happening, you have to wonder how ugly it is going to be when millennials reach retirement age and having nothing saved. We are finally getting around to recognizing how crippling student loan debt is. I just wish more young people knew how much better their older years would be if they could put $200-400 monthly into retirement. Many still think that the stock market is like gambling...when in reality it is the most reliable way to achieve wealth.
AA on September 11, 2020 at 8:07pm
What a silly article. Where in the world did you come up with such basic multiples? 1x-3x-5x-7x-9x-11x?! Ooh... 2x more per decade. Nice and linear. Dumb. Sad. Why does one need MORE savings at 80 than at 70 and more at 70 than at 60? Makes no sense. And why is there no guidance for 90 year olds and 100 year olds? I'm assuming they should have 13x and 15x annual income? I don't even want to go into how assumption of the same income at age 30 as at age 60 is demotivating for young savers. I know it's just an "example" but it's near useless if the "example" is nonsense. And in your 30's you're supposed to triple your nest egg from 1x to 3x, while in your 40's you can pretty much go from 3x to 5x by saving nothing and letting the market appreciate. You only require a 5.2% return on your money for this to happen. Please delete this nonsense. You're misleading people and worse, probably discouraging young people.
HL on September 27, 2020 at 4:11pm
The issue is this is based off of income. For people working full-time in low paying jobs these goals are simply unattainable. I went through university (so I started working at 22), and now at age 30, I am in a job where I earn 50k/year. Prior to this I only had 8 years to save money when my income was in the 30k to 40k/year range, while paying off student loan debt. It would be nice if the economy was able to give young people fulltime jobs where we can actually afford to save and not live paycheck to paycheck! I don't think that the writer of this article actually understands the salaries and rate of pay that younger people earn.
TGMC on October 2, 2020 at 12:07pm
I'm 32 and currently have more money to my name than ever. i have $15,000
Ash on October 5, 2020 at 4:01pm
When you say twice the income at 35 years, do you mean the twice income at 35 years or the salary I used to make in my 20s.
Ash on October 7, 2020 at 1:57pm
Does this 3x times at 35 include assets like primary home?
Andre J. on October 11, 2020 at 7:25am
I love, love, love to hear Millennial's cry about their finances. Who put you in that position?? YOU DID!! Your degree in gender studies and art history make great conversation while you're working the starbucks counter. Stop buying $1,000 iPhones every other year. Stop wasting money on take out food delivered by uber-eats or door dash (20% delivery fees) and cook at home. I know 30-somethings that go out every fri/sat night bar hopping and drop $150/couple a night. Stay home, invite friends over. 1.5L vodka is $25. There isn't a single Millennial or Gen-Z that wouldn't wilt like a rose in the desert if they had to live 3 days like people went through during the Great Depression.
Tony E. on October 14, 2020 at 9:01am
The key to saving is to try to keep expenses stagnant. Then as your income increases, the increases in your salary go into savings. I didn't change my spending habits when I went from $45k/year to $55k/year and thus I'm able to put 13% into my 401k, pay off my student loans, and get a safety net of ~$12k. It was just 3 years ago that I had <$100 in savings and just got lucky to build my nest back up. I'm 29 and have 3 kids.
JH on October 15, 2020 at 1:25am
Andre J. just hit a home run into space!
Nicholas S. on October 18, 2020 at 12:26am
HAHAHAHAH joker laugh... love it. poor and ready to high five the fact you have written an article that meets the basis of 15% of your readers. Thanks...
Millennial on October 19, 2020 at 10:55am
Just to throw this out there in reply to the post about “Millenials”. I am a millennial. I went to college and obtained a degree which I have put to good use. I have a decent income, 20% of which goes to retirement. I have six months salary in savings and I help my parents financially. So when you post about us “millennials” who couldn’t hack it, think again. I came from a low income family, first generation college student, never had a hand up in my life, and made a comfortable life for myself and my family. I know how to get by with next to nothing and how to make something out of it. It can be done, it is being done. Think again before you discredit others.
SFE on November 1, 2020 at 7:13am
Excellent! Will be sharing with my nieces &nephews for simple baseline guide.
Ally on November 1, 2020 at 9:21am
We love hearing this, thanks for reading.
angel w. on November 5, 2020 at 6:07pm
My age is 17
Bookdoc on November 6, 2020 at 8:25pm
Since when are parents responsible for college expenses? I came from an upper income suburban family and was told if I wanted to go to college I had to earn it. I got a scholarship and campus job and had less than $3000 debt when I graduated in 1973-paid off by 1978. My daughter was told the same and she went to the Navy's Nuclear Power school and then did 4 years on a carrier. When she got out she had a ton of job offers and no debt. Something people should consider...
Sara on November 10, 2020 at 3:04pm
Andre J - no need to paint with a broad brush. There are plenty of millenials who grew up poor, and those kids know how to stretch a dollar, they've learned it watching their parents slip into lower wages, longer hours, and higher prices for basic staples.
James D. on November 11, 2020 at 6:15am
I live in KENTUCKY! There are about 10 people I know of that make that much!All the rest are in the 20 and 40 thousand range! Mean average where I live is 34,000! No way!
RJLB on November 12, 2020 at 4:45pm
How sad this country is for its poor, minorities and seniors. Capitalism is the religion of death.
B.B on November 15, 2020 at 11:33pm
As a 30-year-old these numbers can be obtained. I had student loan like most are crying about along with a mortgage in my 20's. However you pay yourself first(401k) pay your bills and learn to live off the rest. I don't have the newest items but still enjoy life. Most meals are planned and made for the week. Being said at 30 doing these thing have a 6 figure retirement so far and emergency savings of 6 months. With a wife and child family income of 60k it can be DONE!
TC on November 16, 2020 at 7:35pm
I am a millennial, started my own company, make $100K+ a year, own my house, and taking financial/physical care of my live-in Mother-in-Law (baby boomer). It’s ridiculous to make comments about an entire generation.
Rafael O. on November 18, 2020 at 6:45am
This is a totally wrong focus, the point is you have to invest rather than saving, all my life I try to save what happen, nothing. But When I start to invest, that is totally diferent, Last year I started with $500, now I have almost $8000, by next year my proyection is $70,000 in 2 years, $500.000. If I try to save i dont get nothing. Because the salary is limited, my goal is in (5) years get ghe finantial freedom. ($5,000,000)
Scott on November 18, 2020 at 10:45am
I'll admit that most of these numbers are ideal for someone who has the discipline and edcuation on how to handle finances (not a degree, but a general understanding). I was fortunate enough to take a pretty hefty finance class at 15 and now as I am pushing 30 I was able to make a lot of smart and calculated moves with the money I have made (started working at 16). I still had a great time in highschool and through college, but I did not go out drinking, partying hard, or buying frivolous/brand new things I did not have the money for. Because of the hard work I put in earlier in life (and applying to dozens of scholarships) and my parent's encouragement to excel, I am in the numbers of someone who is in their mid-40's for retirement planning. I may even be able to "retire" early in my 40's/50's and work for fun after that. These are hard truths, but the most valuable commodity we all get is "time." Working uphill by having student loans, being uneducated in finances, and party
Jimbo on November 18, 2020 at 6:01pm
You are making an assumption that a retiree desires to leave money to others when passing away. Otherwise, why would an 80 year old need more money than a 70 year old. If you like to give advise based on averages ( 61 k), consider average life expectancy. Do you assume the retiree's investments match or exceed inflation? What about differences b/w single people vs. couples? Your 80 year old will likely leave excess 'money on the table' & not fully enjoy his or her life if life expectancy is anything close to average. Sure, you don't want to cut it too close, but we don't live forever and perhaps may prefer to enjoy the fruits of our labor rather than permitting someone else to do so.. Fully state your biases & assumptions before claiming to give useful guidelines to others.
Amanda M. on November 22, 2020 at 4:29pm
Hey
BQ on November 23, 2020 at 11:31am
I love watching people complain about how the system is against them and this is all unobtainable. In reality, it was stark obvious--no factors hidden or variables obfuscated, right out infront of them--and people still made the poor financial decisions regardless. I have no sympathy.
BM on November 25, 2020 at 11:44am
I love this article. It is extremely helpful and you do not have to pay for this information. I am 55 years old and is just now in a position to start saving. I am going to start small and do the best that I can. Thanks Ally.
Ally on November 25, 2020 at 11:46am
Thanks for sharing, BM! Good luck.❤
James W. on November 26, 2020 at 5:44pm
On saving for retirement here is my thought. Savings on hand is an important cornerstone to a great retirement. So is a nice pension. But the most powerful tool is the retirement of debt. Keep in mind for every $100.00 per month of debt service you retire you net $100.00. There is no tax at all on that except for the lost interest deduction for real estate loans. Still better to have the income. And debt reduction does not increase your tax bracket. Work an example out and see for your self. It’s huge. James Woodall
LL on November 27, 2020 at 3:47pm
Interesting article. I'm 34, have some college education, but started my career at age 19. I own two homes and have managed to save 650k between retirement and savings. I don't live lavishly, but comfortably and have found saving to be both fun and easy. As I've gotten older, I've realized there's just not a lot that I need and I've learned to question my wants. Here are some things I do to save. 1. Save tax returns 2. Save 10 - 15% after taxes using automatic savings transfers 3. Max out 401K contributions 4. Invest in real estate 5. Save bonuses 6. Question your wants. If I desire something I usually sit on it for a month. If I still want it afterwards I buy it.
Ally on November 27, 2020 at 4:14pm
Thanks for sharing, LL. Keep up the great work.
R on November 27, 2020 at 8:18pm
This is all good advice. If the numbers seem sky-high, remember that in different parts of the country expenses and salaries vary widely. Sometimes in life you get a windfall -- a settlement or inheritance. Set that aside as your emergency fund! Never having extra money, I always worried about not having enough savings -- but now that I'm 69, those little growth stocks I began slowly accumulating in an IRA back in my late 30's are now exploding and now the mortgage is paid off and we have a nice nest egg. You never know, just keep trying and it might work out better than you imagine!
Eh on November 28, 2020 at 1:53am
All definitely possible, 41 years old. 188k in savings. Own a home with 50% mortgage, own another home outright that collects 600 a month passive income. I also have 180k in 401k and make under 100k a year. Also forgot to mention that I own 5 cars all payed off and 5 bikes with no payments.
Richard on December 4, 2020 at 6:48am
The numbers used are so far off my own personal numbers I find the above of no value other than seeing how far off people are off with their thinking and spending. The only numbers I would agree with might be the college fund. The rest are way too high except emergency fund. I would think $ 3000 - 4000. However I have several times more than that. $ 20,000 for a car. You can get a great car for less than $ 10,000. Last there were times in my life I had less than $100 to my name. But I learned and keep pushing to a goal in all things. Some levels took decades to reach.
Monica M. on December 8, 2020 at 9:48am
Did you look at all that information about money for old age day. That is some Crazy stuff here 😂. Not beneficial at all if you are talking about THE LONG TERM GOALS. Well how long? Like into the here and after long term? You need to be specific with immigrants like me😉 . You know self taught. No fancy elite Diplomas on my wall, no time for school. Was always working trying to build for the old age you know? Would have been nice though. Boys and girls who wants to BET, okay, since you like MONEY I will make the exception just because you are still reading, A WAGE on " bet you can't quote a meaningful scripture and tell me where to find it in the bible". No cheating, can't go look one up and then tell me. Can I trust you? Hmmm🤔 All that thought process, research, time put into being SAFE AND SECURE for OLD AGE DAY. 🤭 No wonder GOD is furious with us and put all of us on time out for bad behavior. If we are doing this that is written in this article th
DrDover on December 11, 2020 at 1:29pm
Over double the 50 yr. old savings recommendation. Excellent! I guess I'll quit saving and just start blowing money on stupid stuff....LOL
John on December 13, 2020 at 12:22am
33k for a wedding? NOPE.
Dont b. on December 13, 2020 at 6:27pm
Hey folks. People see a number and they sometimes get upset and reject everything. The key number to take away in the article is 15% savings rate. Your ability to retire really depends less on you income and more on your savings rate. It also makes budgeting easier. The easy way is when you do your taxes, take your bank statement from the end of last year. Say you have $1,000. Now look at it again at the end of the year. Say you have $2,000. So you have a cash fund savings of $1,000. Now, how much did you invest in a 401K. Say you put in $4,000. Great. If everything else is gone (no assets remaining) then you spend the rest. That's your consumption. If you made $30K, that means your consumption was $25K. You're doing pretty good. If you made $300K that means your consumption was $295K. Your in trouble. You'll never make it. Also, after your emergency fund, if you've got 20+ years until retirement....stick it in equities and forget about it. Get the growth. Th
John M. on December 13, 2020 at 8:26pm
What rubbish. Why should an 80 year old have 50% more savings than a 60 year old? If savings is not for spending in old age what is it for? By extrapolation, I guess a 100 year should have $1,000,000 in savings?
Harold B. on December 22, 2020 at 5:45pm
Right now you can’t make much money in the banks the interest rates are too low they should never have gone the low
Boomer on December 24, 2020 at 6:50am
Everyone should read "Millenial"'s response above and stop whining. At best these estimated retirement savings are 1/2 what they need. This is about discipline not income.
D.P. on December 26, 2020 at 11:14pm
Doesn’t add up... I know every financial management company uses these statistics but I think it’s a scare tactic to get people to invest as much as they can. How can you get double your savings from age 30 to 35 with only 15% each year. Last time I checked 5 years at 15% doesn’t double the amount. So you either need to suggest 20% a year or change how quickly your investment needs to grow. If you are claiming compound interest plays a part, then the same % of compound interest should be calculated as the person gets older. At just 7% interest the investment will double nearly every 10 years without even adding any additional funds... If you think $700,000 is needed at age 80, then work backwards including interest growth and give folks a reasonable goal for age 35, 40, etc. I guess it helps financial advisors if people always think they are behind...
Random on January 2, 2021 at 1:13am
1st off a job is just that, a job, your employer is not your friend. Use it as it uses you, move on when you can. Move around all of the USA as needed to grow your income. Be frugal and prepare for the future but live in the present. If one limits themselves to saying I'm only going to work in one area then they need to take that understanding to realize they just limited themselves.
Steve P. on January 2, 2021 at 7:58pm
I think I made a mistake. I made saving for kids (2) college Priority #1 first 18 years. Retirement Priority #2. Mistake. Kids can take jobs and get loans, whereas I can’t earn it back near retirement. My kids have zero college debt but I wish I had more going into retirement.
Russell L. on January 6, 2021 at 7:11am
I have a different view on saving. Granted YOU must safe for the future, unexpected bills and the like. I question how much CASH MONEY should you have? I consider cash money in the forms of paper money, stocks, any investments that involve a cash payout. Today our country is so far in debt, we PRINT MONEY to allow the economy to survive . But how much is a dollar worth? Should the economy go broke. What will people do with WORTHLESS PAPER? Diversify your savings in anything you can sell,