Average Savings By Age: Do You Save Enough Money?

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In this post I’m going to show you my exact rule of thumb on how I benchmark my average savings by age. If you’re interested in personal finance, stock market, ICO cryptocurrency investing or entrepreneurship, this information will be useful for you. It will help you master your money and build your wealth.

Survey: How Much Money Do You Have Saved in Your Savings Account

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When it comes to savings, Americans are falling short big time. Nearly 70 percent of adults have less than 1000 dollars in their savings account. Think about that for a second. All it takes is a blown transmission, a couple of flat tires. I hate to say this again but someone can get sick or pass away. Boom! That 1000 dollars is gone and you have zero dollars in savings. Retirement funds aren’t doing much better either. They’re actually shocking. About half of US families have zero dollars in retirement savings. This means that people that are going into their golden years have no nest egg. They’re probably going to eat cat food or something like that. I don’t know how they’re going to live on government subsidies. Social Security may not even be in existence when I retire. That’s why you need to start planning now.

Most Families—Even Those Approaching Retirement—Have Little or No Retirement Savings

Economic Policy Institute

People like to think that they’ll save more when they make more. However, studies have shown that the more you make, the more you spend. It’s human nature. Think about it. When you start making more money or you come into more money through gifts or inheritance, you think to yourself, “I’m going to get the nice dinner”, ”I’m going to go to the nicer restaurant”, “I’ll a buy the nicer car”. It’s human nature. If you’re driving a Ford one day, you want to be driving a Ferrari the next day. When you’re sick of the Ferrari, you want to switch to the Lambo. You need to learn how to become content and disciplined with your money. That’s how you become an overall happier person. The sooner you start saving, the better. Because of compound interest you have time on your side and your money actually starts to make money.

With all this being said, let’s get into the rule of thumb for how much money you should have saved at each age. In your 20s, you should aim to have a quarter of your overall gross pay saved up. A quarter is 25 %. For easy numbers let’s assume that your gross pay is 100 000 dollars. 100 000 dollars multiply by 25 % is 25 grand. This can be a combination of your 401k, your Roth IRA, your checking, or your savings. By age 30, you should have the equivalent of your annual salary saved up. By age 35, you should have twice your annual salary saved up. The list just keeps going on and on like this. I never said this was going to be hard, but actually saying it and doing it are two completely different things.

By age 40, you need to have 3 times your salary saved. By age 45 – 4 times, 50 – 5 times and so on and so forth. Every five years you multiply your salary by another time. Ultimately by age 65, which is ideally retirement for most people, you shall have 8 to 10 times your annual salary saved for retirement. This means that you’ll be well funded for the next 20 to 25 years. God willing you’ll live till you’re 100. They should be able to last you over the next 25 to 30 years of retirement and make sure that you’re not mooching off children or being a burden to them. That’s the worst possible thing to be a burden to your children when you are retired. You need to be a blessing to your children.

It’s very easy to say something and think that it’s simple rather than actually implementing it, having the discipline and the know how to practice. If you’ve got any value out of this post, please comment and answer the question of the day below:

If you needed a dollar amount right now to retire, what would that dollar amount be?

I look forward to hearing your comments. Thank you and have a prosperous day.

What do I need for retirement? One million dollars.

by Marco — WhiteBoard finance

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