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Good news - I saved more than what is expected at my age.
Bad news - I don't earn that much money that is expected at my age and I live in an extremely high COL.
Good news - I saved more than what is expected at my age.
Bad news - I don't earn that much money that is expected at my age and I live in an extremely high COL.
How do you compare?
I am 30 years old, about $50k in financial assets and $30k in income. However if I can triple my income after grad school, I will be "behind" based on the new income...for maybe about a year.
Most of my equity is tied into our home but all said we probably have a good bit more than double our household income which looks to be good for early 30s. I don't hate that article.
age 30, aim for $50k job...
age 67, have 10X salary
from age 30 to age 67, the article no longer mentions what the salary is, does author really expect people to never earn more?
better plan, start out working a $50k job, get raises/promotions, save $250k by 30, and let it grow to $2-4million by 67. Between age 30 and 67, spend whatever you want, the retirement money is all taken care of The Ideal Amount of Savings at Age 30
I always find this "X of your income saved" articles inapplicable to my situation.
I started my career at 24 making 32k. Was making mid-30Ks until I was 30, at which point my salary increased to 55K.
At 35 moved to higher COL area and my salary was 90k. 5 years later I'm >100k.
I don't have >300k saved, because I've only been making 100K or close for 5 years. For the previous 12 years of my career I was averaging 45K, I guess.
Oh, and by "saved" I mean what's in my retirement/savings accounts, I don't count home equity at all at this point. That would be net worth, which is not the same as "savings".
Not sure 8x salary is enough for retirement for most people to retire on (though depends on many factors - at low income social security may make up a larger percentage).
That said, if the 25% savings rate they recommend is maintained you should end up with more than that. Math alone puts you ahead of that, even ignoring any interest.
That said, never a big fan of basing things off income. It assumes salary is (relatively) flat across the lifespan. A promotion looks like a setback in retirement savings under this model. I have 2x my salary as a grad student just a couple years ago in my 401k at age 33, but ~1/4 my new salary. Am I ahead or behind?
We're operating under the assumption of "behind, but not yet to a point where we need to panic."
A lot of careers reach peak salary pretty quickly, maybe not by age 30 but definitely by age 40. After that you get raises equal to inflation if that.
Not everyone gets promoted because management is a pyramid.
Haha, I was never promoted in my life. Real promotion with salary increase, that is. I was always just given more responsibilities with minimal raises (sort of like COL raises). So what, I'd switch jobs every 3-5 years, increasing my salary substantially. Never left for less than 20% increase.
I'm 40 now. Not sure if I will be hopping again, I like my current job very much.
These "you should have this many times your income saved articles/guidelines" are nothing more than click bait for people who want to see how well they're doing compared to some faulty guideline. There are countless scenarios that throw this guideline out of wack. One, which was mentioned by OhiotoCO in this very thread, is people who received a substantial increase in salary after several years of lower pay. Saying your savings should be some multiple of your salary wrongly assumes that you increase your expenses/lifestyle with each salary increase. Expected future expenses should dictate your savings, not your current salary.
I always find this "X of your income saved" articles inapplicable to my situation.
I started my career at 24 making 32k. Was making mid-30Ks until I was 30, at which point my salary increased to 55K.
At 35 moved to higher COL area and my salary was 90k. 5 years later I'm >100k.
I don't have >300k saved, because I've only been making 100K or close for 5 years. For the previous 12 years of my career I was averaging 45K, I guess.
Oh, and by "saved" I mean what's in my retirement/savings accounts, I don't count home equity at all at this point. That would be net worth, which is not the same as "savings".
That was my take away as well as I didn't count home equity either. I am behind so much more work to do.
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