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Mentor
It’s just a guidance. If you were making 100 K until 35 and then got 200 K offer, then you won’t have enough savings to match that equation. But 5 years down the line, your savings rate will be doubled. Or if you didn’t invest most of it and started investing later, you will see the results now vs later. It doesn’t mean that your retirement is off track as you still have most of your career left to go.
I think it’s better to have more personalized goals. You want to be debt free. Or you want to buy a house or have a target amount for retirement and so on. Must have emergency funds in place , max out retirement investments (if you can) and make sure your money is working (HYSA, markets, index funds etc…and not just cash). Cash always lose value.
It’s just a ballpark estimate, but imo it is bad if you are a higher earner. Your savings and investments should be mapped based on your expected spend at retirement and what age you are retiring. I plan to retire at 50 with significant wealth, so 2x salary at 35 would not cut it.
OP if you are wondering if that advice is valid, than I can confirm it is. Basically every financial advisor and financial institution recommends roughly that amount.
Here is Fidelitys for example: https://www.fidelity.com/viewpoints/retirement/how-much-do-i-need-to-retire
Keep in mind OP that recommendation is only if you want to retire at standard retirement age. If you want to keep working into your 70s or 80s then I wouldn't stress about these milestones
These heuristic rules of thumb are useful for some people, but most on here should probably go beyond them. As others have pointed out, indexing how well you are doing on building savings to income instead of expenses seems like a bad process. Fine for people with very stable earnings and expenses close to their earnings. If your income may accelerate or you have more income then you need to retire on by a good margin, it leads to a distorted view.
I’m almost 39 and my husband and I are just getting there.
Do you max out your 401k contribution? At your age you should be able to do that in consulting and that will get you there in a couple years
34, 7.5x 😛
No, I was barely debt free at that age. Slowly paid off college while saving for a home and to pay out of pocket for business school. Only put enough in 401k to get the match. But 5 years later at 40 had well over 3x and set to be well over 10x by 45. Still spending like I’m 30 and saving/investing the difference. Everyone has their own path.
Bowl Leader
No. You should have 2x your annual living expenses saved so that you could survive a minimum of 2 years if you got laid off unexpectedly. 2x salary makes no sense because you should be investing most of it in various methods to maximize gains and returns, not have it sitting in a bank account.
That’s not how Fidelity and other advisors use ‘saved’ for this sense. Saved for this means your retirement and other brokerage accounts.
Everyone is different
Depends on lifestyle mainly