What does it mean by age 45 = 3x salary saved?

[frankrj]

I think the population who are able to meet those numbers is small. Many would have had to start investing by age 30 to meet those numbers and invest in the right stocks or funds. Hopefully they were invested right in 2000.

The retirement haves and have-nots -Bloomberg

3 out of 5 Americans don't have the funds to pay for unexpected expenses - Yahoo finance

What about those who bought a home in early 2000 or mid-to-late 90s near a beach that has increased three or fourfold and it may also serve as an excellent rental for cash flow. Or those who work for the city and get a pension.

[sj08054]

Originally Posted by stan4

You're not rich till your money works for you vs you working for money.

So, yeah...my total assets minus debt is 5+ x my salary, but I am nowhere close to rich.

Agreed.. I am beginning to see that with my retirement.

Granted, it all depends on the market but love to see the big separation from contribution vs balance.

[flyingsaucermom]

Originally Posted by sj08054

Agreed.. I am beginning to see that with my retirement.

Granted, it all depends on the market but love to see the big separation from contribution vs balance.

Thanks for showing this. I've been reading how important it is to just keep investing, but in the 3 years we've been doing this I haven't seen the Big Returns that the financial advisor says we're going to have.... like a $1 million in just a 401k and stuff... your graphic demonstrates the whole compounded interest concept and I really ought to just keep playing along.

[Themanwithnoname]

Originally Posted by RVD90277

I actually think that it should be 3X your annual expenses (not your salary). Salary is just an easy way to say it since many people like roughly paycheck to paycheck. For example, if you make $80k after taxes but spend $60k and save $20k, your lifestyle requires $60k. You won't be saving for retirement when you're in retirement. However, your expenses at retirement may go up because of health expenses, etc.

I also think that home equity should be part of the equation somewhere. For example, I'd much rather own a $1m home outright and have $500k in my savings and retirement accounts than owe $1m on my home and have $700k in savings and retirement but if you exclude home equity, the $700k guy seems like he's doing better than the $500k guy.

Many people do.


25 years in retirement (for a woman who retired at 65 and lived till 90) will see some pretty major price increases.