On track for retirement?

cbee817 · December 2013

I got an email from Fidelity that gave a quick chart on how much $ you should have saved for retirement at different ages. Here it is for reference- note that current salary would be your salary at that particular age. Right now, I contribute 9% with 1.5% from my employer- I'm on track as I approach 35 (currently 32), but I know I'll need to bump it up to 15% once the girls are out of daycare. DH is 30 and has state retirement and a 403b. He should aslo be on track once daycare expenses are gone. How is everyone else doing?

When you're:	Aim to have:
35	1x current salary
45	3x current salary
55	5x current salary
67	8x current salary

Xstatic3333 · December 2013

I will have 1x my current salary by 35, but H is 34 now and has barely started so we're behind as a unit. Working on it though!

vlagrl29 · December 2013

I'm 33 and DH just turned 38 and we are 3x our current salary, so that makes me feel pretty good although I still feel it's not quite enough. I'm including DH's and mine's IRA's together and salary's together.

mana8503 · December 2013

I'm about 60% there at age 28, H hasn't started yet at age 29. It's on our list after debt gets paid off.

jessica490 · December 2013

I am about $15,000 away from my salary at 35 yrs old...the stock market better do well for the next 4 years!!

H is badly behind. He's at about 1/4 of his yearly salary at age 30...we plan to bump this up soon if we can...

Makes me nervous

hoffse · December 2013

I am 27 and H is 26.

H and I should have at least 2.5x our joint salaries by the time we hit 35. Possibly more.

Thing is, around the age of 35 one or both of us should be up for partner. If/when that happens our salary will increase a lot, so we'll be closer to 1.5-2x our joint salaries at that point. It's kind of a false marker for us, and I'll be honest: It sort of makes me scratch my head about what we should be doing.

Assuming at least one of us partners someday, we're going to have to save for retirement outside of 401(k)s and IRAs. We won't be able to save enough if we just use those, so we'll be looking at regular investment accounts also.

H and I contribute about 20% of our gross income to retirement at the moment. Next year will be closer to 24% so we can lower our income enough to get the lifetime learning credit on our tax return. If you haven't noticed, I hate paying taxes. So a $2,000 tax credit is just too tempting for me to say no to. We will likely cut it down to 15% or so once we have young children in the daycare years, and then we will probably increase it again when we are done with our student loans or we partner. We're doing the 20% thing now while we have fewer other financial obligations to try to get that "seed money" firmly established in our 20's.

smerka · December 2013

DH is 41 and I'm 40 and we have about 3.5x his salary plus a teacher pension. But we live in IL and pensions are up in the air right now.

lifeonthehill · December 2013

We haven't even started saving. That is what we will start come July. I am 22 and DH is 24. We have time but we will be better off if we start doing it now.

CuriousKiddosMama · December 2013

I think DH is at about 2x his salary which is about right on track since he's almost 40. I'm at 1/2 my salary in a 403B (before I quit working to stay at home) plus a pension. So we are on track!

brij2006 · December 2013

I'm 25, and already have 1x my income for retirement. It pays when you start it at age 20. H on the other hand is 27 and his is only at 1/4th his income.

orangehills · December 2013

We are crazy behind. I have a pension through my job but I am not even close to 1x and I'm 30. DH is almost 33 and he is even more behind than I am. We are getting to our emergency fund goal in 2014, then I'm going to up the retirement a lot. It will take longer to save for a new house because I'll be putting more to retirement, but so be it! We do have the possibility of getting quite a lot of money in inheritance around our retirement age, but I am so not banking on that at all.

smbenevides1989 · December 2013

I'm only 24, and I'm a little behind on where I should be. My H (also 24) just started his new job in September and has been putting in what the company will match him. He does not have any other plans prior to this job. Once we have build up the necessary accounts for our family (DP, Efund, children's savings) we will open up 401K and up our totals.

Ducktale · December 2013

smbenevides1989 said:

I'm only 24, and I'm a little behind on where I should be. My H (also 24) just started his new job in September and has been putting in what the company will match him. He does not have any other plans prior to this job. Once we have build up the necessary accounts for our family (DP, Efund, children's savings) we will open up 401K and up our totals.

No idea how much you currently have in retirement, but keep in mind that it's pretty universally recommended to get your retirement where it needs to be prior to funding anything for children's education (assuming that's what you mean by "children's savings"), and I would do retirement prior to a DP as well. You can always rent longer or take out a loan for college, but you can't take out loans for retirement.

hoffse · December 2013

^^ This.

emily1004 · December 2013

smbenevides1989 said:

I'm only 24, and I'm a little behind on where I should be. My H (also 24) just started his new job in September and has been putting in what the company will match him. He does not have any other plans prior to this job. Once we have build up the necessary accounts for our family (DP, Efund, children's savings) we will open up 401K and up our totals.

Save for retirement before children and a house!

ETA: I see the other posts above me. It's good advice.

smbenevides1989 · December 2013

Ducktale said:

smbenevides1989 said:

I'm only 24, and I'm a little behind on where I should be. My H (also 24) just started his new job in September and has been putting in what the company will match him. He does not have any other plans prior to this job. Once we have build up the necessary accounts for our family (DP, Efund, children's savings) we will open up 401K and up our totals.

No idea how much you currently have in retirement, but keep in mind that it's pretty universally recommended to get your retirement where it needs to be prior to funding anything for children's education (assuming that's what you mean by "children's savings"), and I would do retirement prior to a DP as well. You can always rent longer or take out a loan for college, but you can't take out loans for retirement.

I should of been more clear of children's savings. When my daughter was born, we placed $10 a week since she was born. This is just for her to have some money to put towards a car/college/whatever as long as its not on something stupid. Due to some hardships, we took money from her account. So we were just going to match it to where she should be. I owe her account $2080 by the time she turns 4 (which is next month). Once that is caught up, then I was going to focus on the Roth IRAs (not 401K like I mentioned above, that was my mistake).

Actually, after writing this yesterday, I was trying to figure out how much extra a week we should be saving towards our retirement. I made a new thread on IRAs this morning and am currently creating a new budget to include the extra savings.

On the DP, I live with my parents in an apartment in the basement. We went through some financial hardships the last couple of months, and we finally got back on our feet financially in October, and my parents have offered the home until we have our DP and move out. We are taking the advantage, since we have a great amount of privacy and our relationship with my family is great. We would like to have our own place within the next year, that's why we will aggressively save for that while saving for the retirement.

sillygoosegirl · December 2013

I'm not a fan of that table. It doesn't seem to me that 8x salary will go very far in retirement. I hope to live for a long time in retirement. I have a grandmother who is almost 100. I figure a safe rate of withdrawal is about 4% per year to avoid running out. That's only 32% of pre-retirement income per year. Even withdrawing 8% per year (which is the most I've ever heard anyone recommend and most experts think is way too aggressive), you're only replacing 64% of your pre-retirement income. It seems to me that if you are only aiming for 8x income at retirement, you are counting on social security, a pension, a job, or some other source of income in retirement.

jtmh2012 · December 2013

sillygoosegirl said:

I'm not a fan of that table. It doesn't seem to me that 8x salary will go very far in retirement. I hope to live for a long time in retirement. I have a grandmother who is almost 100. I figure a safe rate of withdrawal is about 4% per year to avoid running out. That's only 32% of pre-retirement income per year. Even withdrawing 8% per year (which is the most I've ever heard anyone recommend and most experts think is way too aggressive), you're only replacing 64% of your pre-retirement income. It seems to me that if you are only aiming for 8x income at retirement, you are counting on social security, a pension, a job, or some other source of income in retirement.

I think part of the assumption on these tables is that your expenses in retirement will go down. ie. if you have a house, your mortgage should be paid off before retiring. If your expenses don't go down (ie. your apartment rent won't be), then you need to plan on more.

This is where having a good financial advisor comes in hand. They can help you figure our what you'll really need.

sillygoosegirl · December 2013

I expect my expenses will go down in retirement, but I don't think I'm going to be able to get by on less than 1/3 of my pre-retirement income, or even 2/3 of it. My mortgage isn't anywhere near 36% of my income. And anyway, 1/3 of what I think of as my "mortgage" payment is actually taxes and insurance, which aren't ever going away. Many of today's retirees pay more in retirement in property taxes than they ever did on their mortgage. Also, while some expenses will go down, others will go up. I will most likely need to pay more for healthcare in retirement than I do now, for example.

On track for retirement?

Re: On track for retirement?

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