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noon0707
LSU Fan
Saint Amant
Member since Sep 2010
62 posts

rule of thumb for retirement savings
I'm 40 with a good job and not much debt, whats a good general rule for savings for retirement? I'm currently saving about 30-35% of my net income. I'm trying to find a sweet spot


Teddy Ruxpin
LSU Fan
TX
Member since Oct 2006
33007 posts

re: rule of thumb for retirement savings
There isn't an objective sweet spot past whatever minimum you should be doing, which it appears you're meeting.

But do try to enjoy life on the way.
This post was edited on 3/15 at 7:35 am


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180
notsince98
Missouri Fan
KC, MO
Member since Oct 2012
9962 posts

re: rule of thumb for retirement savings
Find a pro and discuss this. Tell them when you want to retire, what type of lifestyle/standard of living you want to have in retirement and a complete record of your current standing.

It should be a short and simple meeting and they can help you find the best % to save for your situation.


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08
HailToTheChiz
Auburn Fan
Back in Auburn
Member since Aug 2010
30407 posts

re: rule of thumb for retirement savings
quote:

I'm currently saving about 30-35% of my net income


edit: i shouldnt say this is a troll when i don't know anything about your past savings
This post was edited on 3/15 at 8:04 am


noon0707
LSU Fan
Saint Amant
Member since Sep 2010
62 posts

re: rule of thumb for retirement savings
Not a troll Chiz, I got a lot of good advice when I was young. Ive been using Edward Jones to handle my IRA and give guidance on my 401K. It seems like a cookie cutter type of deal to me. Ive always been an aggressive saver and pretty conservative, but I think I may be missing out on some opportunity to enjoy my money now. The advisor I use ran a couple models(monte carlo model I think it was called) and said that retirement shouldn't be a problem for me. I'm considering slowing down on saving and spending more money on now. Within reason of course.


nctiger71
LSU Fan
North Carolina
Member since Oct 2017
420 posts

re: rule of thumb for retirement savings
That seems high unless you want to retire earlier than most; say before age 62.

A good financial advisor can help you figure out what to do now based on your short & long term objectives.


lynxcat
Rutgers Fan
Member since Jan 2008
20103 posts

re: rule of thumb for retirement savings
Percentages are a bad indicator IMO for saving albeit they are often quoted. Focus on the actual dollars being saved since that’s what drives your purchasing power.

30% on an income of $30K vs $100K is a dramatically different “rate” of actual dollars hitting your accounts.

Generally, save as much as you possibly can while still enjoying your life in the present day. There isn’t one right answer. Some people will say a certain multiple of your income based on your age but I don’t follow those personally.


ynlvr
LSU Fan
Gulf Coast
Member since Feb 2009
2537 posts

re: rule of thumb for retirement savings
quote:

Ive been using Edward Jones to handle my IRA and give guidance on my 401K.

Generally speaking, 30% plus is a healthy savings rate. Some on this board will suggest (and I agree) you are overpaying an Edward Jones advisor. The following free calculators will let you check his work. They are simplistic, but a good place to start.

quote:

The Vanguard Retirement Nest Egg calculator

quote:

The Fidelity myPlan Snapshot

quote:

Personal Capital's Retirement Planner


lynxcat
Rutgers Fan
Member since Jan 2008
20103 posts

re: rule of thumb for retirement savings
EJ is not a preferred broker / financial planning company per this board / Bogleheads. There will almost certainly be better options for you. If you do want to speak with a financial adviser then make sure s/he is a fee-only and a fiduciary.


noon0707
LSU Fan
Saint Amant
Member since Sep 2010
62 posts

re: rule of thumb for retirement savings
Thanks ynlvr, I will be looking into these. I have very little experience in doing this on my own, but am not scared of trying something different. For 15 years I've just watched it being drawn from my account with only meeting with my financial advisor twice a year only to hear "youre on the right track keep saving"


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noon0707
LSU Fan
Saint Amant
Member since Sep 2010
62 posts

re: rule of thumb for retirement savings
Any recommendations on an advisor in Ascension parish?


OleWarSkuleAlum
LSU Fan
Member since Dec 2013
6151 posts

re: rule of thumb for retirement savings
quote:

Percentages are a bad indicator IMO for saving albeit they are often quoted. Focus on the actual dollars being saved since that’s what drives your purchasing power.


A rule of thumb is the absolute minimum to secure a 30 year retirement is 35x inflation adjusted retirement costs.


TrouserTrout
Thibodaux
Member since Nov 2017
992 posts

re: rule of thumb for retirement savings
6 months emergency
401K to match
Max Roth IRA
401K to max
After that enjoy the rest don’t oversave or overspend.

ETA: frick dem kids
This post was edited on 3/15 at 3:23 pm


LSUA 75
LSU Fan
Colfax,La.
Member since Jan 2019
165 posts

re: rule of thumb for retirement savings
Trouser Trout,ynlvr,lynxcat all giving you good advice.Listen to them and ditch EJ.This is not rocket science,EJ and all these other financial people want you to think it is.Bogleheads board has lot of good info.Keep it simple,Index funds will beat the overwhelming majority of managed funds over time with very low fees.Fees you pay advisor, managed funds will cost you significant amount of money long term.


Ton Chou
LSU Fan
On the Levee
Member since Feb 2010
638 posts

re: rule of thumb for retirement savings
What I’d like you to reconcile is how 99.9 % of this state “retires” with zero, yet seems to eat and sleep just fine?


Y’all all advise as if everyone will be vacationing in Europe 8 months out the year and will have an RV at tiger stadium the other 4.
This post was edited on 3/16 at 12:08 am


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11
Ace Midnight
LSU Fan
Between sanity and madness
Member since Dec 2006
67236 posts

re: rule of thumb for retirement savings
quote:

I'm 40 with a good job and not much debt, whats a good general rule for savings for retirement?


I would say 15% of your current, gross income per paycheck. Lots of folks just can't spare that, but if you get into the habit early, it can be sustained.

As far as milestones, you should be about 1x your salary somewhere between 30 and 35. 2x between 35 and 40. 3x between 45 and 50. Then, it sort of varies with how much you've been able to amp up and, frankly, how well your investment mix did, but 5x by 55 to 60.

I'm early 50s and I'm only 1x. I do qualify for 2 pensions, so that mitigates my dalliance, but I need to push a little harder to get to 15% consistently.
This post was edited on 3/16 at 12:17 am


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Ace Midnight
LSU Fan
Between sanity and madness
Member since Dec 2006
67236 posts

re: rule of thumb for retirement savings
quote:

A rule of thumb is the absolute minimum to secure a 30 year retirement is 35x inflation adjusted retirement costs.


This is utterly ludicrous.

20x would easily sustain a person at their salary indefinitely. Certainly 35 to 40 years with a draw down. 15x would probably get a person through 30 years, although a bad year early would threaten that (and that's assuming other retirement income, including SS is $0).

35x? Nonsense. That means a person who earns $50k needs to save $2m to retire or they have to work until they die.


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60
TorchtheFlyingTiger
North Carolina St. Fan
FL
Member since Jan 2008
566 posts

re: rule of thumb for retirement savings
35x seems excessively conservative.
25x is what many in the FIRE community use based on 4% safe withdrawal rate. If you have flexibility to reduce expenditures during years when the market is down you further reduce risk of depleting your savings early.


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RoyalWe
LSU Fan
Prairieville, LA
Member since Mar 2018
372 posts

re: rule of thumb for retirement savings
quote:

Any recommendations on an advisor in Ascension parish?
I've met with Mike Bonfanti as 'fee only'. He will manage your assets for you for a percentage if you not a DIYer.


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RoyalWe
LSU Fan
Prairieville, LA
Member since Mar 2018
372 posts

re: rule of thumb for retirement savings
quote:

rouser Trout,ynlvr,lynxcat all giving you good advice.Listen to them and ditch EJ.This is not rocket science,EJ and all these other financial people want you to think it is.Bogleheads board has lot of good info.Keep it simple,Index funds will beat the overwhelming majority of managed funds over time with very low fees.Fees you pay advisor, managed funds will cost you significant amount of money long term.

THIS. Also, give very little credence to the opinion pieces you read on the market. They don't know what the hell they're talking about or they're purposefully selling fear or greed.


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