If you make a hundred bucks, the saying goes, you'll probably need to spend at least $50 of it on survival — rent, groceries, heating your house. Then, $30 can go to the fun stuff, things like seeing friends or buying gifts for your family.
And as for the final $20? You should probably tuck it away for a rainy day or retirement. That's based on the 50-30-20 rule, a common rule of thumb that tries to get within shooting distance of what you'll need to cover expenses in your golden years. Estimating how long you'll live, after all, is an imprecise art, and everyone has different incomes, tastes and spending habits.
The figure is also probably a bit aspirational. Many Americans would have trouble saving 20% of what they make — roughly 11 million use up the entirety of that 50% survival figure on rent alone, to say nothing of food and other necessities. Flat wages plus rising living expenses is one possible explanation for why 69% of Americans have less than $1,000 in their savings account.
Still, even if 20% savings might seem out of reach, financial planners are not pulling that number out of nowhere: Research suggests that as a golden rule it comes pretty close to ballparking what a 25-year-old making $40,000 would need to save annually to retire comfortably by age 67: about 22%.
There's an important caveat there, especially if you're in your 20s — odds are, you'll probably work a little beyond age 67. That's especially true if you can save only the minimum amount financial planners suggest, around 10%.
But don't stress! Just by thinking about these questions, you are already ahead of the curve. Here's a little primer to help you figure out exactly where you stand — and how much you need to beef up your savings game.
How much money to have saved by age 20
Here's a more uplifting tip: The earlier you start saving, the less you need to save each month — and it's super smart to start putting away cash long before you take your first full-time job. We're talking babysitting money, or even that high school graduation check that you're not sure what to do with.
If you have anything at all in the bank by age 20, bravo. You're in good shape.
Consider putting that cash into a Roth IRA. Individual retirement accounts can easily follow you regardless of your career ups and downs, and with a Roth account, the money gets taxed going in as opposed to when you take it out.
Translation? It's an ideal way for a broke-ass college student to start their nest egg, since odds are you'll be in a higher tax bracket 40 or 50 years from now, when you're ready to start taking the money out.
How much money to have saved by age 25
As you get deeper into your 20s, you should shoot to have about one quarter of your annual cash (25% of your gross pay) saved up, according to a spokeswoman for the budgeting app Mint. That means that the typical 25-year old might want to have somewhere around $10,000 in savings.
Curious about where you stand?
Averages for 20-somethings range widely: One median figure suggests young people have about $16,000 saved for retirement, according to a 2015 study by Transamerica. But other research has suggested the true figure may be lower. A Wall Street Journal analysis of savers aged 25 to 34 found that the median account had only $13,500 saved, and that more than half of millennials didn't have a retirement account at all.
In other words, something is still better than nothing.
How much money to have saved by age 30
Once you're 30, figuring out a hard number gets a little trickier, since the stakes are a little higher. Fidelity suggests that by 30 you should have saved about one times your annual salary saved.
The median income for 29-year-olds is roughly $35,000 per year, according to the Atlantic, which means that by 30 you would ideally have about that stashed away — though of course there will be exceptions, especially if you've gotten an expensive graduate degree that took you out of the workforce.
Other income readings suggest you should probably have saved up even more: According to the Bureau of Labor Statistics, the median weekly earnings for U.S. workers aged 25 to 34 would amount to about $40,000 annually.
How much money to have saved by age 35
Your 30s is when the push to save for retirement heats up: Data from a 2015 New York Federal Reserve report suggests that this decade is when your earnings really start to ramp higher. By the time your 30s are over, odds are you're within $1,000 of your peak salary.
So it's time to get serious: Fidelity suggests you have about two times your annual salary saved by age 35.
If you earn the median weekly wage for a 35 to 44 year old, you might make close to $50,000 — which means you probably want about $100,000 saved.
How much money to have saved by age 40
Your 40s are when your finances start to get a lot more complicated, which is why it's also the age where it's increasingly helpful to consider paying a professional to help you make a plan and stay on track.
On the flip side, if you've been hitting the goals so far, by now you've built up pretty consistent savings habits, which means you might not have to depart too much from what you're already doing.
A common benchmark for age 40, according to Fidelity, is to try and save three times your current annual salary, which could mean about $150,000.
How much money to have saved by age 45
By 45, the traditional goalpost is to have saved up around four times your annual salary, according to Fidelity, which might mean about $200,000 or more. Alas, again, even that number might be far too low for you — and depends on the standard of living you hope to maintain in retirement.
Remember that this is the point in life when Fed data suggests you should stop expecting major salary increases down the line.
Therefore, you truly need to be saving as much as you can. If you haven't already, consider opening up multiple retirement accounts.
When does it ever stop?
How much you need to save depends on when and how you want to retire. To sustain your quality of life, you'll likely need between eight and 11 times your annual pay by retirement, not counting Social Security.
Some estimates suggest that people may need between $1 million and $2 million dollars by old age — though again, it will depend on your lifestyle.
If you learn to live on less, you may need less. But if you want to be in true ship-shape, keep in mind estimated goals for your age group. The estimates really do range — so don't get too hung up on dollar amounts — but do understand the rules of thumb enough to stay on track.
Remember: Saving is more achievable than you may realize; the sooner you start, the easier it will be. You might even get to retire early.
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