Am 58 retiring next year but the thought of retirement gives me weakness. My apologies to everyone who have retired and filing social security during this time after putting in all those years of work just to lose everything to a problem you never imagined to happen. It’s so difficult for people who are retired and have no savings or loved ones to fall back on.
Even if you’re not skilled, it is still possible to hire one. I was a project manager and my personal portfolio of approximately $850k of my retirement pension took a big hit in April due to the crash. I quickly got in touch with a financial-planner that devised a defensive strategy to protect my funds and make profit from my portfolio this red season. I’ve made over $250k since then.
Certainly, there are a handful of experts in the field. I've experimented with a few over the past years, but I've stuck with ‘’AILEEN GERTRUDE TIPPY” for about five years now, and her performance has been consistently impressive.She’s quite known in her field, look-her up.
Retirement becomes truly fulfilling when you possess two essential elements: simple financial resources and a meaningful purpose in life. Make prudent investment choices to secure good returns and ensure a comfortable retirement. My question now is how to get a good financial advisor that I can invest with and have good returns before retirement age .
Good question Donna , A friend of mine referred me to a financial adviser sometime ago and we got talking about investment and money. I started investing with $110k and in the first 2 months , my portfolio was reading $294,800. Crazy right!, I decided to reinvest my profit and gets more interesting. For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family.
I watch several RU-vid videos on how to trade in the stock market but haven't made any head start because they are either talking some gibberish or sharing their story of how they made it and I do not want to make mistakes by taking risks in my own hands
@@Amelia-Elizabeth Alice Marie Coraggio her trading strategies is working for me for more than a year now and I’m making good profit from the stock market and she's 100% honest, reputable and trustworthy
I have bought so many stocks in individual companies. There are so many stocks going to rocket in the long run, right now safe to invest in an ETF that tracks the S&P500 and ride it out. I put $130k into some growth stocks with a Financial advisor handling my portfolio. some of my picks are, NVR, LISP.SW, SEB, VOO,DOWJ, BRK-A, AAPL,IVV, NYSE, NASDAQ, TSLA, I've gotten 82% return so far this year I'll see where it goes.
this is more like it, I have always said if you are going to refer your advisor at least let one know specific plays he or she uses to make gains in the market, nice picks. you've got great stocks, just started a few weeks back, I'm going for long term, I'm still trying to wrap my head around it, can I get the number of your F.A ?
I believe the calculation is that it takes 17 years to get to FI if you can save 50% of your salary, and you started with $0. So a person who is 50 can still reach FI by 67. Anything you save prior helps reduce the time to FI.
We experienced the pinnacle of our era, but it is now gone. Like what happened to Rome, the corrupt administration will bring this nation to an end. My condolences go out to anyone who is close to retiring and may be worried about whether their pension will be enough to pay the rising cost of living. Insane fiscal policy, poor regulatory policy, poor energy policy, and poor foreign policy
Personally, I can connect to that. When I began working with "Ruth Loralann Brennan," a fiduciary financial counsellor, my advantages were certain. In these circumstances, I would always advise getting professional help so they can steer you through choppy markets and just give you indicators and strategies for knowing when to enter and exit the market.
@@danieljackson87 Please tell me how I can think I have such skills. My funds are being murdered by inflation, therefore I'm looking for a more profitable investing strategy to put them to work.
@@emilydeep You can look up the financial advisor using her complete name on your computer; I hire her since she looks after the portfolios of renowned investors.
@@danieljackson87 I greatly appreciate it. I'm fortunate to have come upon your message because investing greatly fascinates me. I'll look her up and send her a message. You've truly motivated me. God's blessings on you
According to the New York Times, the average savings of a couple reaching retirement is $110k I’m closing in on my retirement and I’m under pressure to grow my reserve of $330k, despite the fact the capital gains you can make on growth stocks far outweigh dividend yields, and even in downtrends folks still pull off 6-7figures gains in months. surely the risk is much greater, but I’d love to know how...
The uncertainties accompanying this present market is more reasons I have my daily investment decisions guided by a portfolio-coach seeing that their entire skillset is built around going long and short at the same time, both employing profit-oriented strategy and laying off risk as a hedge against the inevitable downtrends, coupled with the exclusive information/analysis, it's quite impossible not to outperform. Netted over $1.5m in return on investment, since using a coach for about 2years.
there're tons of avenues to capitalize on in a downtrend to make substantial gains, but these opportunities and trades are successfully carried out by pros...
I am really proud of myself i may be first in family to ever hit these goals! 29 and just over 1 year salary invested and already own a home! I really am thankful for videos like this they make me feel like its all worth it living frugally to hit my goals!
For the people asking whether income is gross or net, or for each individual or a married couple: Instead of "income," think "spending." The 4% Rule is what you are working into, and it is a guide to how much money you can safely withdraw (and spend).
At one point in life I was on track based on the multipliers . As my salary increased the multiplying saving goals out paced my saving. I guess this a good problem but it messes up the math.
The math isn't all that complicated. Calculate what you think expenses in retirement will be. Then do the math on expecting 6.5% returns on your investments, with how much you add each year. Also, each year multiply by 0.97^x (x = # years from now) so you can account for inflation. Assume a 4% withdrawal rate. Once your recurring withdrawal amount marches your expenses, you can retire.
That’s when you should’ve just been steadily investing, possibly even increasing your investments, and not started moving into bigger houses and more expensive cars.
Your investments will almost double (so your 2x goes up to about 3.6x) and in 5 years you save the other 1.4x, so 30% of salary per year. Pretty steep but doable I suppose
Ya, I had 2x easily at 35.. now at 38 I'm nowhere close to 5x.. didn't help markets being down.. but damn. And I really bumped up how much I'm investing the last few years.
When I was 35 I was $30,000 in debt. I knew I was screwed so I worked hard to pay off my debts and aggressively invest. It took 5 years to pay everything off and another 15 years investing but I did reach financial independence and retired early. It was hard but not as nearly hard as I feared. Indeed, anyone looking at those years would never say I suffered significantly because of that. They'd even say I spent a lot of money foolishly.
15 years is usually not enough to reach financial independence unless your savings rate is at or above 50%. I hope you have/had 25x your average annual spending (ideally 25x worst-case future spending). Take note that if you retired before 65 (and it sounds like you did), spending could substantially increase after retirement due to medical reasons or because your lifestyle substantially changes.
@@TheFirstRealChewy I was able to invest about half. I did skip a few months but I was in the military so I also put 90% into investments while deployed.
@@CoastFIREisawesome I did invest half my paycheck except when on deployment and it was 90% (though I did skip some months too). I was in the military and retired with $650k in investments and a $40k pension in 2014. I stopped large scale investing after 2015. In 2018 I became a millionaire. A lucky investment in Tesla with my last big investment in 2015 plus market weirdness boosted my net worth to $2.2 million in 2020. Taxes, Tesla reversals, charity, and the recession dropped it to $1.5 million. I pay 90% of my expenses with my pension (despite living in a HCOL area). While I'm not financially bulletproof (nobody is) I think I'll be OK.
@@EricDaMAJ sounds like I'm about 15 years behind you (active duty with 13.5 yrs). Thank you for your service. Glad you have the pension and Tricare. I guess my point was that if you didn't have the pension and the medical coverage (not military), the $650k investments in 2014 probably wouldn't have been enough without the risk of running out of funds. It becomes a much more difficult calculation as you'd have to learn the social security and medicare/medicaid rules.
TLDW 20: 0 (Do not get into debt, if possible) 25: 0.5 * annual income 30: 1 * annual income 35: 2 * annual income 40: 5 * annual income 50: 10 * annual income 60: 20 * annual income 65: 25 * retirement income needed (the number for financial independence)
My retirement investment always took a hit following market, but I started my oldest child UGMA and 529plan since she's 2 yrs old... now she's 15yrs old. She's well ahead of me when I was her age and telling her what to do as well as what NOT to do.
I learned about UGMA and 529 thanks to this. I also saw this, which may be of interest and possible new information to you: "And the SECURE Act of 2022, passed as part of the 2023 Omnibus funding bill, will permit rolling over up to $35,000 of unspent funds in a 529 account into a Roth IRA account, starting on Jan. 1, 2024. To qualify, the account must be at least 15 years old," from investopedia. If that got rolled into a ROTH IRA at 20, it'd be over a million dollars at 70 years of age.
I’m not sure why videos that cover this topic never seem to address that an investor is likely to see a salary increase sometime between college and retirement, and must adjust their moving goalposts accordingly. Just skimming through the comments, it seems like it would be a great topic to cover in a future video, as many of your viewers would find that guidance valuable.
It is covered in investment videos. Unless you start making $500,000 a year your budget is going to pretty much look the same whether you are making $16 an hour or $50. You don’t need a RU-vidr to tell you what to do with your raise if you have already following the standard advice.
He did mention that. And also, for the sake of a video that doesn't exceed 10 minutes, it makes the most sense to use a standard $50k/year as an "example".
Keep in mind that these salary multipliers are based on the idea that you spend as much as you make. So if you really have 25x your salary right before retiring you are in a very good position because you don't pay FICA and you don't have to save for retirement from the income in retirement. Your expenses might even be lower since your house is paid off, car paid off, kids out of the house, and you already bought all the things you wanted over the years and care more about getting rid of stuff. What you really need is 25x your anticipated expenses in retirement. To know what that is in today's dollars, check with people who are living the lifestyle you desire, then adjust for inflation. Based on the multipliers we are behind. However, if my calculations and predictions end up being correct, we'll have just enough to cover our desired lifestyle by the time we reach 65. For now we are holding the line on lifestyle creep.
25x your expenses sounds more reasonable. Or your salary minus what you put in your retirement accounts, savings accounts, etc. 65 sounds like a good age. Good luck!
We are just about on track. Currently cash flowing my wife through nursing school. She gets her RN in May and is continuing for her NP in 2 more years. At that point we can save 100% of her income and 50% of mine. My goal is $2 million saved by 50 plus building 2 single family rental properties and no debt. Once I get 4 x single family rentals built I'll retire. That will provide $100k in income a year. I'm assuming that inflation will reduce the value of money by 70% in 30 years. If you would need $1 million to retire today you are going to need closer to $3.5 million in 30 years to achieve the same result. A new pickup will have a starting price of $100-120k.
Wrong or unrealistic numbers IMO. 30 should be 1.5x, 35 should be 3x, and 40 should be 4x. You can't save 3x (the difference between 35 and 40 in the video) in 5 years, even with investment growth. Recommend using the last 3 years of income as your number. This should be more useable for those with variable income or if your income has significantly grown. At 50 and later, measuring your savings against your spending (vs income) is more important. Having ~25x your annual spending before you retire is vital.
@@Nepthu If you don't start in your 20s, you'll always be behind the ideal numbers. To reach a financial goal 20-40 years in the future, setting regular and consistent mini-goals along the way helps quite a lot. Recorded videos may not help those who panic and don't take proactive and productive action.
@@Nepthu or ill give it the benefit of doubt by saying a video like this is trying to estimate the best case scenario for a solid retirement and going short of that would still be decent (e.g. I doubt that being 10x times the income instead of 20x at the age of 60 is a bad outcome). In addition, this could be US centric perspective while Im thinking it from my European one where we are bound to have a state pension income enough to cover us the basics.
@@MeltingRubberZ28 This same channel had a video yesterday stating that 1/4th of Americans have no retirement account and the median retirement savings for all Americans is $65K You must work with the Kardashians.
One could easily find himself or herself paying 33% income tax on Required Minimum Distributions (RMDs) on money that was deducted when he or she was in the 15% bracket, and it's even more likely for the surviving spouse of a married couple. Here is a way to avoid that; the earlier you start, the easier it will be. First, know what tax bracket you are in, i.e., at what rate the last dollar of your income will be taxed. For the time being, the 15% bracket has become the 12% bracket, and the 25% bracket has become the 22% bracket. Pay attention to where the 12%/15% bracket ends. As an example, for a Single person in 2023, the Standard Deduction is $13,850 (or more if you itemize deductions), and the 12% bracket ends at $44,725 of *taxable* income. Thus, for a Single person in 2023, the 12% bracket is $13,850 + $44,725 = $58,575. (Note: $11,000 of this amount is taxed at 10%.) Next, if your *total* income for the year will be less than $58,575, make retirement savings contributions *only* to Roth 401(k)s and Roth IRAs. You're very unlikely to ever get a lower tax rate, and it makes no sense to risk having to pay income tax at a higher rate because you are required to withdraw money from your retirement savings that you don't even need. If your total income for the year will be greater than $58,575, make contributions to Traditional 401(k)s, Traditional IRAs, and perhaps a Health Savings Account (HSA) until the amount of your taxable income will fall below $58,575. All further contributions should go into Roth accounts. If you have funds in Traditional 401(k) and/or Traditional IRA accounts, and you will be in the 12%/15% bracket, convert as much in Traditional funds to Roth funds as you can without going into the 22%/25% bracket. You will have to use funds from what financial planners call "other sources" to pay the tax; you'll be penalized if you use the converted funds to pay the tax. Once you reach Age 59 1/2, making these conversions will be easier because you can pay the tax using converted funds and not be penalized. Finally, when you retire, defer your Social Security Retirement Benefit as long as you can, preferably to Age 70. You get two benefits by delaying. First, the amount of the benefit will increase significantly for every month you delay it. (The benefit increase works out to approximately 8% per year of delay.) Second, you can convert funds in Traditional 401(k) and Traditional IRA accounts to Roth funds at lower tax rates. For example, assume that you used Roth funds to pay for your living expenses, and had no income other than Roth conversions. You could convert $58,500 per year (actually, much larger amounts because of adjustments for inflation) and still be in the 12%/15% bracket. Also, a lot of that money would be converted at 0% (Standard Deduction) and 10% (10% bracket) tax. Financial planners call this technique "tax bracket arbitrage." You just might be able to convert 100% of your Traditional funds to Roth funds before your Social Security benefit starts. Ideally, all of your Traditional funds would have been deducted at 22%/25%, and you would pay no more than 12%/15% tax on them. You can see that having a smaller amount to convert would make it easier to get the entire amount converted.
These numbers seem much higher than the net worth estimates in your other video. Also, home equity should be included. Raising a family on 50k would make it extremely difficult to reach these numbers.
After Y2K, 9/11, 2008, and now, my response was laughter to this. But, I might be old, but am ok. My financial trajectory followed NONE OF THIS. Just to let people know, huge hits will come, huuuuge - lay-offs, foreclosures, massive stock market and housing market falls, illnesses, children’s catastrophes ( unexpected massive medical, etc.), so there will be gigantic swings most likely. Just do the best you can, with as much knowledge as possible, and you might end up ok. We had all those hits mentioned above, and were in quite scary financial positions over and over, but we are ok. The huge ebb and flows will happen. Really good happens financially, and really bad too; just be prepared for both. The only guarantee is that it will NOT be smooth sailing.
When I was a teenager I decided I wanted to have enough money (or passive income) to retire at 40. I’ve since extended the date to 45-50 to allow for actually living life while I’m young enough to do so. I’m now 31 and have over five times my income (which equates to over three times the average household income of people over 35 according to the info in this video) invested and, thanks to buying at the right time, I have half the value of my home in equity with a fixed interest rate at only 3.xx% (can’t remember the exact number) interest rate. What debt I do have I got on purpose to take advantage of 0% interest (which turned out very well considering inflation). So financially I’d say I’m doing well. After this semester I’ll have my bachelor’s so my income will go way up. Now all I have to do is find a husband and a surrogate (for children) and I’ll be all set.
So, is it about yearly income, or yearly spending? Because, if you save 15% of $50000, you spend only $42500, so, when you are 60, you need only $42500x20=$850000
These are just rules of thumb. You have to decide how good you want to live in retirement. Do you want a raise so you can travel more or will you be happy sitting around town. You should also own your house around then(ideally) by then saving you money.
Lol things are so expensive now that as a single person one can save very very little. Salaries have not increased enough still! A house here is 25 times incomes!
@@spankynater4242 no, it’s not really possible to increase savings from 2x salary to 5x salary in 5 years. That’s the point I was getting at. I wanted to see what Chris proposed. Rule of 7. But he wants to 2.5x savings in 5 years. Most people between 35-40 are at peak expense years then. You literally would have to save 60% of income. That’s impossible for most.
Yeah I don't think he put much thought into that one. The returns needed to get from 2x to 5x (150% increase in 5 years) in 5 years are unrealistic. His end goal was the 25x number bc of the 4% rule which is fine albeit flawed. But for 40 3x is a far more realistic goal. 5x by 45. 8x by 50. 12x by 55. 18x by 60. 25x by 65. It's still pretty aspirational especially since it really should be based on expenses. But that growth rate is at least more...possible.
@@bdubs6205 he, nor anyone, ever said to increase your savings by that much. When they talk about savings, they’re not talking about the amount that you save, they are talking about the amount that you have saved up. That’s where compounding comes into account, that’s what provides for most of the growth. Of course, there’s nothing to say that you can’t also increase your savings rate. Just don’t increase your cost-of-living rate, and it’s doable.
But the problem with compost interest is that nobody did this method during the last 25 years... So you can tell everybody to do this method but even him didn't use it...
I never went by the should have or general rules of thumb like x amount of income, etc. Because everyone is different. We need very little as we have no debt, house and everything paid for and live on 1/6 our gross income now. Know your expenses. Put in there health insurance when you have to pay it on your own, etc. You may find you need very little to enjoy early retirement. We allocate 20-25K a year for travel. That gets us 3 to 4 months away from home. Most people spend on things and material items that will not and do not bring happiness.
Honestly, definitely keep a part-time job for 6 to 9 years to let the money mature a little once it goes past the million dollar mark because with ongoing inflation, one million is losing its value and later on live on the interests.
I think this video is a bit unrealistic. It’s all about expenses you’ll have and the fact that your spending decrease as you age in retirement. Based on that, you would not need 20 or even 10 times your salary.
I wish i would of opened my Roth IRA much earlier( 5 year rule, it costs nothing to open an account)..I wish i would of saved more money in the past( lets not cry over spilled milk)...Saving as much as i can this Compounding business is awesome..Start earlier,, and save as much as possible ..your older self will thank you.
Basing saving on income, not expenses, makes no sense. If I quit my job and get a new job that pays 1/2 as much, I'd "double" my standing if I base it off of income... but in reality, I'd be worse off overall.
Hmmm. I appreciate the concept of goalposts of savings and/or investments per age. However, the suggestion of just cutting off of your expenses to make up the cost for saving and/or investing is incomplete. There's only so much you can cut out of your expenses. Learning to build additional income sources whether passive or an active side hustle is also very important to get you to a more comfortable financial position esp. as you grow older. Also, giving much upfront cost and effort to earn more income is how you can truly retire earlier, not the outdated idea of ONLY Saving Money.
ANYBODY can invest $1,000 a month to become a millionaire. It’s just having the right mindset. Take the better paying job like UPS that pays better even though it’s not glamorous. Stop spending $300 a month on weed and another $450 a month on coffee and you will be set.
What you need to have set aside depends solely on what your budget is now and what your budget will be when you retire. If you want to take full advantage of compound interest , a good chunk of savings should be saved before you start owning a home and starting a family. Most people don't save during their family raising years. You don't need 25x your income if your budget allows for living off your social security with money leftover every month.
So at age 35 we should have 2x our income, and at age 40 we should have 5x our income? And then age 50 we should have 10x our income? So you’re saying we should be saving 50% of our income then? You think that’s realistic?
I wwasn`t sure the numbers added up, but the rule of thumb is indeed saving/investing 20% of the income. 1 year of income saved when 30yo + 5 years saving 20% of the income = 2 years of income saved/invested. I've even seen recently someone saying that it should be 40% - initially seem like too much, but the dude wasn't even retired yet and was driving a Lamborghini - I file that as lavishly burning money, which I would only think of doing if I had many times more what was "burnt" as savings/investments...
Currently I'm way behind on where I wish I was, but then I like to remember that I don't have any major debt and that my big expenses are being made on experiences and vacations instead of "things", I see that I'm actually way ahead of most people around me...
I'm sorry but the numbers after 35 make zero sense. How can you go from 2x your income saved to 5x your income saved in 5 years? You would have to invest 60% of your GROSS income, not receive a raise, and pray that there is zero loss on your investments in that time. These numbers become more and more absurd as your salary increases. Once you pay taxes you'd have like 5% of your cheque to live on (especially if you have a town, school, or county tax in addition to your state and federal).
Remember to factor for inflation. After watching financial videos for about 3 years I was under the impression 1 million dollars would be enough by the time I retire. In reality you will need closer to 2.5 million dollars in 30 years to match today's 1 million dollars. Aim to save and invest a consistent percent of your income, do not go by dollar amount. Without social security or a pension you really need to start with 15-20% by age 30. Else figure out your retirement number in today's money, calculate inflation for your target date, and then see how much you would need to save/invest to hit it.
I don’t understand this idea of having x amount saved. For example, if you have 50k saved at 30 (and assuming historical annual growth rates➡️amounts double roughly every 7-8 years)… doesn’t that mean you’ll have loads of money without lifting another finger (figuratively)?
Why do financial planners always focus on gross income ? I focus on net income. It is a true measure of how much money you really need. I realize there are federal and state taxes to pay.
The jump between 35 and 40 seems too high and 40 to 50 too low. Your investments should effectively double every 7 years, so 5x to 10x should be basically achieved every if you invest nothing in a 10 year period.. Meanwhile to go from 2x to 5x is actually a larger gap that's still going to be very dependent on contributions and will be difficult to do in 5 years especially since 35 is when you have the least disposable income if you have children.
This seems to be so unrealistic.. l'm 50 years old . And I have nowhere near that savings rate... most people younger than me or around my age are not even close
It’s just a guideline, based on very specific parameters. But like one wise commentor said on another video somewhere else, I don’t see a lot of Old retired homeless people walking the street, people figure it out.
Toss up if I'll have 20× saved at 60. Mid 30s now and had to stall saving for family building. 20x is a big goal at my income. Not worried about it though, pension will keep us safe.
These numbers are insane - way overestimated... Assuming SSI exists in 25 years, I can expect about 40% of my EXPENSES to be covered just by SSI based on getting an SSA account and seeing their calculator. This assumes I maintain the same standard of living. Notice I mention expenses, not income. More income helps you save more, but other than that, means nothing - zero. Expenses mean everything. If you expect to retire at 63, having SSI cover 40% of your expenses, and expect to live another 25 years after that (only about 1/4 of men live past 90), then you do not, under any circumstance, need 25x your income at the time you retire. Some expenses will go up, others down, but overall, most people's spending decreases past age 75 and certainly past 80.
What I don’t like about videos like these is they don’t take into account if you’re married and both working, and also if you get raises or better jobs along the way. Also, what if you get state or government pension(s) as part of your retirement plan?
You went from saving “X times you income” to “X times your expense” I think that should be cleared up if you’re following the 4% rule you shouldn’t confuse people by saying one thing the whole video then switching to a completely different metric at the end
Recommending that 20 years old live with family is VERY BAD ADVICE. Nothing teaches self reliance and valuing a dollar more than having to earn your own way. You are giving advice that says it's okay to sponge, take it easy, and not yet worry about supporting yourself at twenty. VERY BAD ADVICE! For the record, I am a self made millionaire that retired at fifty three. I had a full time job and my own apartment my senior year in high school. I learned to take care of myself. That is the advice a twenty year old needs!
Luckily my wife and I live a very simple lifestyle. We are 43 and 37 and the only debt we have is our mortgage. She already has a little more in her 401k than I do because I paused mine for a bit when we bought our first house and now we both put 15% of our salaries into a 401k/Roth IRA mix. We have close to a quarter million combined now and it's been compounding quickly the past 5-6 years. And I'll be retiring 5 years before her so hers will continue to grow as I'm just starting to pull out of mine. Plan is to retire early and hold off to collect my full social security benefits (if its even available then, lol.).
These expectations of savings, especially at ages 40 and beyond, are simply outlandish. At 40 years old, having $250,000 in retirement savings will put you between the top 5 and 10% of everyone in your age group today. Meanwhile, the Federal Reserve SCF data shows retirement savings for the average 44 year old at $101,900, and the average 39 year old at $48,710, with respective average salaries of 62,244 and $55,712. Also, pay rises as you gain age, so you will never be able to attain these levels. Let's run this out - if you have $100,000 at age 35, to get to $250,000 (at 40) assuming you don't get a raise during that time, it would require you to earn a constant 8% RoR (the 30 year S&P 500 average compounded rate) and require you contribute $18,000 every year (44% of your take-home pay). Furthermore, if you assume you have a job that adjusts for inflation and gives you an additional 2% raise annually, and start at $35,000 in 2000 at 22 years old, use the same 8% average compounding rate of return, and save 16% of your pay for the first 10 years of your career, then increase it to 25% of gross pay (equivalent of 33% of net) at 32 years old and thereafter you would not hit any target beyond 40 years old at those salary levels.
Your Math must be Assuming a salary of 50,000 ? It's still possible to save 18,000 a year at age 35. You have to be single. And living at home with your Folks is probably a necessity. Saving $1,000 on rent... means you just saved 12,000 for the year. Or maybe, you stayed at home in your 20's..... and then bought a DUPLEX as your first home. Now your "tenant" is actually paying your mortgage. So.... Saving 18,000 annually is still possible... but probably unconventional/unlikely for most. ☀️☀️
If you enjoy saving, I'd almost count what your agi is instead. You might find you can retire and live a lot more comfortably. No SS/medicare taken out of the pot either.
Most of these types of calculations are on your gross income because in the US the majority of people in the US can save tax free in a 401k. The key to any wealth building ideal is to start early and stay disciplined.
Most likely before taxes. If you do 401k most are traditional and brings down the amount of taxes you pay. Which is why I have a Roth IRA as a hedge against future taxes in addition to my 401k.
It would be net income. For example, if it costs me $32000 annually to pay bills, buy food, buy clothing etc. That is after tax income. Essentially how much cash on hand do you need to survive each year? Then you compound that to estimate retirement. There are a bunch of calculators you can use online for this. I use Topia, because it gathers all my accounts in one location. Gives me an exact "you need this much money until you can quit work" and "you have this many years until you retire".
I had the same question, but it doesn’t make sense to measure gross, net is likely what it uses since it directly relates to savings (aside from just the traditional 401k)
I'm not sure myself, and I really don't care personally. I pay my CPA good money to make sure I don't pay any taxes or very little. 😆 Wealthy people have two things in common, financial discipline and tax avoidance. Wife and I have so many pre-tax deductions on her job income and my self-employment income, we pay almost nothing in Federal income tax. For example, I use my car to do ride sharing on the side. That means I can expense the oil changes and other maintenance against my business income. Tires, brakes, etc. You don't have to drive everyday to get these benefits, just once in a while. 👍
@@ChrisInvests Thanks Chris. Let's say we have a person who has $200k in mortgage debt and $100k in their retirement account, would you consider them as having $100k saved? Or would you count them as being $100k in debt?
lol how do you go from 2x your income to 5x your income from 35-40 .... saving 3 income within 5 years? don't say interest on investment .... it won't even make 1 income within 5 years
Also, if you want to retire much earlier than 65, you’ll need much more than 25x retirement income. I like and appreciate your videos but you have to do better with this one.
You do not need to save 15% of your income. The Richest Man in Babylon's formula of pay yourself first and save at least 10% of your gross income is the key. Someone starting at age 23 making $15/hr and saving 10% every year and never increasing this amount will amass over $2.3 million in retirement savings. The issues with this are two fold. One is that the vast majority of people today cannot stay disciplined with their savings and two is that they do not start immediately. IMO the two greatest signs someone will be wealthy is discipline and the ability to postpone gratification.
