Are you on track to have X in your 401K/403B/TSP by X age?

[sadlebred]

Are you on track to have X times your salary in your 401K/403B/TSP/etc. by a certain age? This is from Investopedia and Fidelity. Other sites seem similar:

By age 30, you should have one time your annual salary saved. For example, if you're earning $50,000, you should have $50,000 banked for retirement.
By age 40, you should have three times your annual salary already saved.
By age 50, you should have six times your salary in an account.
By age 60, you should have eight times your salary working for you.
By age 67, your total savings total goal is 10 times the amount of your current annual salary. So, for example, if you're earning $75,000 per year, you should have $750,000 saved.

[sadlebred]

No way. I lost 5-6 years of retirement investing when I was married and divorced. It's a long story. I also got a big bump in salary right after I got divorced, so that upped my 'goal.' I'm around 3x salary in my late 40s. It's still more than a lot of people have. I think MM is a huge exception.

One negative for this year is that my company went from 6% matching to 4% matching. I've come up with an additional 1% to put into my own ROTH. Once I get my (tiny) raise this year I'll look at either doing another 1% into my 401K or another .5% into my ROTH. There is no way I can max it out and still pay my bills. #singleladyproblems

[trissie18]

Personally I don't but combined with my DH we have almost 3x our HHI.

ETA: We are early 40's

[chpmnk1015]

No, ugh. I'm definitely short I think
I have 4 more years til 50 so hoping something changes but saving what we can.

[quesyrah]

Nope, not even close.

I’m trying not to worry because I started using some online calculators and they indicate that we’ll be okay and then we met with a FA who said if we keep ramping up the % we’re putting into 401K we’ll be okay, especially because DH has a pension. We are not factoring in SS.


Long tangent ahead about my retirement stress!!


We have very low expenses now so we don’t need a ton in retirement and our house is almost paid off. BUT. I went through a difficult time with my parents and ended up
needing to move them into memory care. Thank god between them saving well for retirement and being able to sell their house, it took a lot of stress off of making sure I could pay the bill.

My MIL needs to move to assisted living and she can’t even come close to affording it. We can’t foot the bill either so she lives in an ADU on our property and we do our best to help her out and have some help coming to the house. She’s in a position of having just too much for Medicaid and not nearly enough for private care.

Those experiences color every conversation we have about retirement planning. Our #1 concern is making sure we’re in a position to be able to easily move to assisted living if/when the time comes.

[wesleycrusher]

I voted SS. 

As an individual yes I am exceeding where I need to be for retirement. 

However- there is a huge pay disparity between DH and me (healthcare vs tech). So if I look at our retirement accounts combined, we're working on getting on track- when DH got his graduate degree, he got a huge pay jump starting at a new company which put us behind for our HHI so we're still catching up. 

[pumpkin]

Feb 8, 2024 11:48:38 GMT -5 sadlebred said:

No way. I lost 5-6 years of retirement investing when I was married and divorced.

There is no way I can max it out and still pay my bills. #singleladyproblems

I’m in a similar boat. I had lots of grad school debt and then basically started over after my divorce in my early 30s. Now I’m doing the best I can but am definitely behind.

[fortnightlily]

In 41 and on track. But I agree that doing it by salary may be a simpler way to do it, but also feels kind of arbitrary over time as your career grows.

I've also seen it generally thrown about that by the time you retire you should have 25x your annual expenses saved, but it's harder to know what milestones along the way measure whether you're on track.

[holly116]

Our combined HHI has jumped substantially in the last few years so it has felt like the goalposts have shifted. The most first-world problem ever.

Based on our income year end 2021? Yes, and we were on track at that time.

Based on our income year end 2023? No, and we both max our 401k contributions. If we continue to save the max, our advisor has assured us that we will be fine.

[flygirl]

I’m not there, but close. As another poster stated, I’m worried about care for illness more than anything. Hospice and elder care is expensive and you can burn through money fast!

[plutosmoon]

No, not quite. When I was 40 I made a lot less money than I do now at 45, so I had 3xs at 40, but am now just under 3xs my current income. I have regained all the money I lost in my divorce, but I'd be a lot closer if I hadn't lost that money.

I don't think I'll get to 6xs by 50. I do plan to ramp up my retirement savings over the next few years.

[wanderingback]

Haha, no, not even close. I guess those formulas don’t consider people who went to professional school forever and then have higher salaries but then are way behind on retirement. I can’t imagine having 3 times my salary saved, let alone 5 times or more. I’m super happy with the approximately $60,000!

[mae0111]

I said that we're there. We are in our late 40's. Our HHI is way more than we will need in retirement, as we're cash flowing tuition right now and will likely be doing this for the next 11 years (when our youngest graduates from college). We have some money in 529s but we will fund a lot of the difference.

So I chose a HHI that seems about right for us, and I definitely went higher than we would likely need. I understand that health insurance will be $$$, but DH owns his company and I'm self-employed, so we already pay an obscene amount for health care - so that's factored in.

Based on my estimates, we have 8.5X in retirement accounts. Because of the structures of our 401K plans, we can contribute more than the standard Fed max using profit sharing. So we will keep growing this at a faster rate. Once we hit 50 (which is soon - yikes) we can start using the catch-up amounts as well.

[Susie]

I don't really know how to go about thinking about this.

By the metrics in the OP, I'm behind.  I have roughly 2x at 42.  However, I make about 70%+ of our HHI, so saving multiples of that takes more time.

H has almost 3x at 44, but his total balances are lower than mine by six figures.  OTOH, H has a vested state government pension that is on track to be pretty significant.  He has 15 years of state service with plans to stay 5-15 more years.  He won't need the standard multipliers.

We're just taking the approach of doing the best we can, and so far it seems more or less reasonable.

[sadlebred]

I'll say that I agree Xtimes your salary is a bit arbitrary, depends if you have a pension or other source of income, if you got a bit raise at one point in your career (or more), etc. If I was at my old salary, I'd be near the 6x.

[TR]

Hell no, mostly because from 30 to 40 (hell even 35 to 40) my income has more than doubled lol and the amount I'm able to save now is way more than it used to be. So my target now is higher and I can't imagine being on track. Maybe at 50 I'll be where I should've been at 40.

[ssmjlm]

I have 3.4x at 42 and DH has 6.25x at 50.

I’m about to drop by percentage because I will hit the max this year in early December and that doesn’t include a couple of bonuses that I should get.

DH will retire at 60, in 9 years. And I will go at 57.

Neither of us plans to keep working past 60. I’m just thankful that I will have health insurance in retirement.

[TR]

I just looked and I have just over one times now at 40. If I continue being able to put in as much as I do now and continue earning and increasing normally, I'm not good at math, but I think my guess of having 3 times by 50 is possible. But 6? Fuck no.

[noodleoo]

Yes, we’re on track. I went by household income and combined savings. But we have 2 things working for us: 1) our combined income is relatively low because I work part time and 2) I made the incredibly smart decision to have us both max our 401K contributions when we were DINKs (thank you Suze Orman). We had kids late so we were able to do that. I figured we would cut back when we needed to after having kids but we’ve actually been able to maintain it (although we haven’t saved much otherwise during the daycare years). We are big savers, sometimes I actually wonder if we oversave at the expense of enjoying life now. Who knows what retirement will look like or if we will even make it there.

[bcv513]

I’m in a similar boat to other posters in that I had to give part of my retirement up in a divorce. And he chose not to contribute to a retirement plan so there was nothing there for me to share. I have a government pension and I started contributing to a separate 457 plan to try to catch up

[brooke77]

No. I feel so behind. I am at 1x my salary and I’m 41. I didn’t really start working until I was 27. I always contributed SOMETHING to my 401k, but have only started to max it since 2020. I also spent 10 years paying off significant student loans ($200k), so was not really in a position to save until a few years ago.

[jwright]

I voted SS; I do not have a lot in retirement accounts compared to my net income or net worth. I have invested in real estate heavily and other passive income sources that will lend the majority of my income to live off of during retirement so I'm not worried.

[sakoro]

One thing that’s never been clear to me regarding those recommendations— how does it apply to a single person v a couple?

Should the couple have 2x 3x 6x the combined salary of both partners in their combined 401ks or other retirement accounts? If the couple is living together and splitting housing/ utilities/ grocery costs and potentially sharing one car during retirement wouldn’t their costs be lower? Also they may be able to be caregivers to each other while a single person might need to hire a paid caregiver or go to a nursing home earlier?

As a single person, it is so much harder to save. I was able to purchase a condo but now so much of my salary goes towards mortgage/ insurance/ HOA that I can’t possibly max out my 401k.

[jewel]

Well, I SAH and my income is zero, so I’m taking the WIN! I have way more than triple of $zero 🤣

But we’re not fully funded for my H. He has a defined public pension that we’re counting on, and I have 10 years in from when I did work. We are saving beyond that, but not at max.

That said, we also own 2 rental properties that will be paid off before retirement, so that’s not a retirement “account” but we do consider it a big part of our retirement income.

[melmel4854]

Nope!! Not even close!

[aprilsails]

I'm not there yet, but I too suffer from the FWP of having a continuously growing income. If I base it on my salary from 6 years ago (which was decent), I'm on track. In the meantime, all my salary gains are going to be spun into my partnership purchase for the next 5 years, which is going to be a big retirement savings setback. But then, hopefully, it will all be gravy after 45. That should give me 15 years of very high savings.

[janegold]

No. But I also have a pretty high salary, and I don't think those guidelines necessarily make sense across that board. Granted, I did start contributing a few years late because of law school, recession and choking student loan payments in my 20s but even if I had started contributing earlier, I don't think it would be mathematically possible for me to have 3x my salary saved in a 401k by now.

I'm at about 1x my salary at age 40.  When combined with H, we are collectively at about 2x our combined salaries. We are still projected to have a very healthy balance when we retire so I am not overly concerned.

[aspentosh]

Single income family. I turn 40 this year, H is 42. We have almost 6x his salary saved in retirement. I haven't worked for 10 years, but have prioritized Roth IRA contributions for myself and then maxed out 401k and Roth IRA for H.

We're very lucky we are where we are. I never made much in the 8 years I worked but always saved the max in my 401k. H has been doing the same for almost 20 years. He also had some AMAZING matching and contributions at previous companies and that really helped.

We are not expecting a pension or relying on SS and H wants to retire early, so it's a priority for us and we are lucky to save as much as we can.

[dr.girlfriend]

We are, but a lot of it is dumb luck, in that I considered our Roths to be "bonus" to the primary retirement savings of our 401k/403bs and put some early Roth contributions into single stocks, including AAPL and TSLA.

I sold half the Tesla a few years ago at what turned out to be the all-time peak price. I can't claim to be an investing whiz -- part of the reason I bought Tesla is because I really liked their solar shingles, which turned out to be a big bust as far as I know and got spun off into Solar City anyway, but those two $4k investments were at least at one point worth $200k. 

Combined with maxing out my 403b as soon as I was able I have made up for my late start (PhD, didn't start my first job until age 30) and a pretty steep salary trajectory (current salary is more than 3x my starting salary even though I'm in a field that typically only has 5% cost-of-living merit increases -- they have had to boost salaries a lot to stay competitive for new hires so I've had multiple "equity" adjustments over 20 years). DH has had multiple jobs and is now self-employed so I'm just keeping him out of the picture for now, his income is also hugely variable due to self-employment.

[jinkies]

No. We are not quite at 3x and we are mid-40s. Given that we will have college expenses starting between now and 50, there is absolutely zero chance of being 6x by 50.

We are also comically bad/ have bad luck at choosing investments. All of that "put your money in retirement accounts young, and then watch them snowball" has not worked out at all for us. My H was putting large percentages of his paycheck into retirement starting at 18, but lost almost everything in the early 2000s when things crashed. It is still unclear if they were poorly invested by the company, or what the hell happened there. Then he was self employed for a while, and I was underemployed when the kids were young. It just hasn't been as clear cut as a lot of the retirement advice makes it seem.

I'm applying to higher paying jobs, which will hopefully help with savings, but also, as folks noted above, will move the goal posts in terms of the raw dollar amount that we need to be at 6x salary.