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On Retirement Savings (sh.itjust.works)

submitted 2 years 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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[–] tburkhol@lemmy.world 0 points 2 years ago

Income is the wrong focus for retirement, and I'd be suspicious of any benchmarks that talk about replacing income. Spending is the number you need to pay attention to, because you're not going to be paying as much in taxes, and you're not going to be saving for retirement after you retire. Those tend to take a pretty big bite out of your nominal working-life income, and the difference can make retirement seem like an even bigger hurdle than it actually is.