How Much People Want In Retirement Vs. How Much They Actually Have

I wrote about the various paradoxes of wealth based on a Charles Schwab Modern Wealth Survey. In this article, I want to highlight another wealth paradox based on the amount people expect they need in retirement versus how much they actually have.

According to this new data, I'm convinced Americans really don't know how much they need in retirement!

Expected Amount Needed In Retirement Versus Amount Currently Saved

Take a look at this Northwestern Mutual online survey of 2,740 U.S. adults conducted from February 13 – March 2, 2023. The survey highlights the expected amount of money needed in retirement versus the amount currently saved by age.

expected amount of money needed in retirement versus the amount currently saved by age.

The expected amount of money needed for retirement by age:

All ages: $1.3 million

20s: $1.3 million

30s: $1.4 million

40s: $1.3 million

50s: $1.6 million

60s: $968,000

70s: $936,000

The actual amount of money saved for retirement by age:

All ages: $89,300

20s: $35,800

30s: $67,400

40s: $77,400

50s: $110,900

60s: $112,500

70s: $113,900

Key Takeaways From The Retirement Expectations Survey

Here are five main takeaways about retirement from this survey.

1) The expected amounts for retirement don't consistently increase by age

You would think the expected amount of money for retirement should increase at every age range due to inflation, rising wants, and rising needs. But it didn't.

People in their 40s expected $1.3 million for retirement, $100K lower than people in their 30s. Meanwhile, people in their 50s expected $1.6 million for retirement, a big jump!

2) People in their 50s may have more anxiety about retirement

With ten years left until the traditional age range for retirement, people in their 50s are likely more anxious about retirement than people in their 40s. How else would you explain a significant $300,000 (25%) jump in the amount needed for retirement compared to expectations for those in their 40s?

It's human nature to feel more jittery before a big event. And retirement is one of the biggest events of all! The fear of retirement is why people for many years suffer from “one more year syndrome.” The uncertainty of a life after work and whether one will truly have enough money to live happily ever after without a job is understandable.

If you have children, your 50s is also when the majority of parents have to worry about paying for college. In addition, there is also the responsibility of taking care of aging parents.

The need to potentially take care of three generations is likely a big reason for the dramatic increase in the expected amount of money needed to retire.

3) We don't need as much money to live a comfortable retirement life

Curiously, those in their 60s only needed $968,000 to retire, down $632,000, or 40% less than what they expected they needed in their 50s. What happened?

People regularly overestimate the amount of money they will need in retirement. There is this worst-case fear that we'll run out of money in retirement. This seldom happens.

One of my big realizations after I stopped working was that I no longer needed to save for retirement. Given I was regularly saving 50% – 70% of my after-tax income, this meant I could earn much less and still maintain my lifestyle.

Another reason for the much lower expected amount needed for retirement could be the start of Social Security. Even though W-2 workers all pay FICA tax, we don't fully appreciate Social Security's benefits until after they are received. For me, I see Social Security as a 100% retirement income bonus because I don't model the income in my retirement calculator.

If you don't have debt, living off $22,000, the average Social Security benefit in 2023 per person, is doable for most Americans. If you have a spouse, living off an average of ~$40,000 in Social Security benefits seems fine.

60-somethings may also be earning supplemental retirement income through part-time work. Given we're living longer, many 60-somethings choose to remain active through consulting, teaching, and other side hustles.

Finally, sadly, parents of folks in their 60s begin passing away. As a result, less money is needed to take care of one less generation. There might also be an inheritance involved.

4) People in their 50s, 60s, and 70s are stuck with the amount of money

Once you get to your 50s, the survey shows you may no longer be able to accumulate more money for retirement even if you want to!

Folks in their 50s have $110,900 saved for retirement, $112,500 for folks in their 60s, and $113,900 for folks in their 70s. It's like Americans are stuck in neutral once they reach 50.

It is disappointing to see barely any retirement savings progress for thirty years. However, given expectations for how much one needs in retirement declines by 40% from one's 50s to one's 60s, the lack of growth is less of a surprise.

I suspect the flatlining of retirement amounts from one's 50s to 70s has to do with decumulation. Once we retire, we tend to sell some stocks and other assets to pay for retirement. However, given the perpetual unknown, we maintain a comfortable steady amount of wealth in our 70s just in case.

5) Lifelong massive gap in expected amounts needed versus actual amounts saved for retirement

The biggest curiosity about the survey is how the large gap in expected amounts needed to retire versus the actual amounts saved for retirement barely narrows for older participants.

Even though survey participants say they need $936K to $1.6 million to retire, the most survey participants can save up is $113.9K in their 70s!

Can you imagine for 40 years after graduating college thinking you will need up to $1.6 million to retire comfortably. Yet the best you can do is save on average $112.5K by your 60s? It reminds me of a person stuck in amber only able to speak or listen, but not move.

You'd be devastated if you couldn't make any financial progress for 40 years. You'd suffer the pain of high expectations instead of the joy of low expectations! Even saving just $2,000 a year for 40 years with a 5% compound annual return would lead to $253,000 saved.

Do Americans really lack the financial discipline to accumulate more wealth? Is there a desperate need of personal finance education in our country? Or maybe Americans rationally don't save more because we don't need to. We have the government and wealthy parents!

Perhaps the reasons why the median 401(k) balance is so much lower than my recommendations are the same reasons why Americans don't have more in retirement. Life is messy!

No Retirement Savings Crisis Just Yet

Although survey after survey shows how little Americans have saved for retirement, there is still no retirement savings crisis. We aren't hearing stories of our elders getting placed in homeless shelters everyday due to their 90% shortfall in retirement savings.

Instead, we hear about tens of trillions of wealth being accumulated by the Baby Boomer generation during the longest bull market in history. Presumptively, Generation X and Millennials will go on to inherit this wealth over the next forty years.

Of course there will be cases of retirees in their 60s and beyond struggling to make ends meet. Life can often be hard. But the American spirit is resilient. We adapt and tend to do whatever it takes to make do with what we've got.

I think about my father-in-law who retired to a cabin in the woods. He lives off less than $18,000 a year in West Virginia. He was never rich working as an electrician and a handyman before he sustained an injury. However, he enjoys his peaceful lifestyle in the woods. Should he ever need financial help, we will happily provide.

Despite the lack of retirement savings crisis, the government is taking positive steps to encourage Americans to save more with its SECURE 2.0 Act. The problem is that not enough employees are taking full advantage of all their retirement benefits at work.

Inspired To Make Financial Samurai More Inclusive

Given I've only worked in New York City and San Francisco since 1999, I've mainly written about the financial standards households face living in the most expensive cities. But if the actual amount of money saved for retirement across all ages is really $89,300, I'm likely talking past many folks.

For example, my net worth targets and 401(k) targets by age are likely too aggressive. I expect the vast majority of you to be millionaires by 60! As a result, I either turn people off, or worse, piss people off and create disharmony. Such a strategy is not good for growth.

Although I've always written based off firsthand experience, I want to practice writing and recording more content that is relatable to more people.

One of the challenges we in the personal finance is staying relatable after reaching financial independence or accumulating wealth beyond the average. Let's see if I can make FS more inclusive!

Reader Questions and Suggestions

I want to hear from more of you about your retirement savings journey. If you have a large gap between retirement expectations and actually savings, I'd love to know why. Why do Americans think they want so much more money for retirement than they actually have? What are some other observations about the retirement survey?

If you're looking for a powerful retirement planning tool, check out NewRetirement. NewRetirement was built specifically for retirement planning and post-retirement planning. What's great about the software is that it enables users to input multiple retirement scenarios. Further, the tool takes into consideration all your investments, including real estate.

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About The Author

102 thoughts on “How Much People Want In Retirement Vs. How Much They Actually Have”

  1. “Inspired To Make Financial Samurai More Inclusive”. I’m here for it. I read your posts all the time, and although many are not completely relevant to me, I do still learn. But if you’re able to start relating to the more average consumer, I’m definitely ready to read it.

  2. This article got me thinking about the differences between investing in physical gold and a Gold IRA The Do’s and Dont’s when investing in Gold Can anyone explain the differences in terms of risk, return, and taxes?

  3. I read your blog because your content is more specific to folks who live in HCOL cities and is/are/were working as engineers. You have/had a specific voice and being more inclusive makes your content generic, and aligned with general money advice columns like the moneyist, or other news like yahoo finance and cnbc. Think about your audience

    1. Curious, how does Sam benefit from the same audience for growth? Have you ever shared his work, linked back to FS, rated his podcast, or purchased his book?

      I have a feeling that most readers, even if they have higher net worth, and income, are free riders and don’t do anything to support websites they’ve read, even after years.

  4. The difference between the actual amount saved and expectations is huge. I have been reading your site since you first got started or maybe about 10 years ago, I can’t remember, and I have always enjoyed your posts. I just updated my spreadsheets for retirement and originally (when I first started saving over 20 years ago) I was hoping to retire at 55. It looks like that will be pushed back to 58-59 due to the amount we want to have saved before quitting our jobs. I am okay with that at this point in our lives. We have spent the majority of childrearing years spending a significant amount of money on the mental health care of our teenager (17). She has struggled immensely over the last 3 years. Covid has exacerbated her anxiety and depression and it is difficult to find a med that works. She has spent time in inpatient facilities and has also spent a couple of times in outpatient programs as well. She will not graduate on time this year with her friends. It has been a significant struggle and an expense we never anticipated.

    Pushing back my retirement due to her health issues is okay with me. My husband and I will do anything we can to help her get back on track. Delaying our retirement is something we can afford to since originally we wanted to retire early.

  5. Good article, Sam. There does seem to be large disconnects between, Want, Need and Actual as you noted. Not enough articles tabulate the income sources combined with the savings,etc to get a full picture of % of income replacement or, more importantly, expense coverage. I have always worked the plan based on net after-tax income required to deliver full coverage of the monthly expected spend. I will have SS, an annuity and rental income covering about 60-65% of spend and then income from investments covering the rest with cash savings to deal with those $5-10k gotchas like air-conditioning breakage, estimated taxes, etc, so not considered as part of the monthly flow. I just retired 2 weeks ago, so let’s see how it goes. The big debate my wife and I have is how much inheritance to leave the kids vs passing with 50 cents in our pockets! Cheers, Geoff

    1. Aren’t the methods used for gauging retirement wealth problematic? My understanding is that these numbers come from individual account reporting. Many people have multiple 401k accounts, let alone other savings and brokerage accounts or savings vehicles. I don’t think these numbers consider equity in primary or rental property either. I’d guess these numbers are mighty underestimates of the actual amount of wealth Americans have heading into retirement. If so, they probably shouldn’t be used in any reasonable policy making decisions or back of the napkin analyses.

  6. Hi Sam, Great article, keep up the good work.

    I’m 64 and still in tech sales in Texas. I have several friends my age that want to have a home that makes it easy for our adult children and their families to visit and overnight.

    Yes, that means a bigger home and back yard that my wife and I really need, but that is a common goal for many. I am fully aware that this may not be possible when I retire, but it is a goal.

    My target retirement age is 65 1/2. I have often thought I did not have enough to retire , but your article makes me give it a closer look.


  7. How were the numbers gathered for the amount of money saved by age for retirement? I have IRAs at two different companies and a 401k. Do the people gathering the amount of money saved for retirement have access to the level of data that would let them match social security amounts across all companies offering IRAs and 401k to aggregate these numbers accurately? I would guess that the data provided would require a conscious decision on behalf of the person saving, as it would likely include personally identifiable information.

    What about other investments that may be in real estate/brokerage but are ultimately for retirement? Are the folks that came up with the amount of money saved able to incorporate this data too?

    I see so many articles on the average 401K being low yet so often when I read further into these articles there is no mention to what extent if at all aggregated accounts are included.

    I’ve also known of couples where only one has a 401K and does all the saving for retirement. While I don’t agree with this philosophy, are married couples being aggregated for their total retirement sum?

    I’ve also known of lots of people who consider their paid off house part of their retirement plan. Not the best strategy unless you plan to strategically geo arbitrage, but it does happen.

    As far as the 2000+ people interviewed in the survey, is this an accurate cross section of Americans? Or is it potentially a sample set that may be skewed?

    I do have a large gap between retirement savings and expectations but that is because I’m saving for retirement, a 3–5-year savings cushion and also to pay for a house in cash. Not buying a house now because I’m in a HCOL and don’t want to be house poor. I’ll stay in the same state after retirement but relocate to a (relatively speaking) LCOL area. So, a kind of geo arbitrage. I’m also looking to buy a small house in the neighborhood of 1100-1600 sq. ft. which will mean my upkeep costs will remain low.

    I’m also not planning to withdraw at 4% annually and would like to keep this rate at closer to 2%-3% annually. Reality is that I’m currently slated to hit just over halfway to my goals once I’m 65 if I weren’t to save any more money. Once I complete these goals I’ll continue to save so that I can retire early (essentially expanding the 3-5 year cushion). I feel like there are so many factors I can’t predict/control when it comes to retirement but the one factor I can control is maintaining my high rate of savings. I focus now on how I want to feel when I retire, which is relaxed and not stressed about the cost of living, home repairs, the unexpected and all the other things that are part of daily life.

    I expect to be track to hit my first three goals (the funds for retirement, house fund, 3-5 years living expenses when I hit retirement age) within the next 3-4 years. While the calculators and Monte Carlo simulations say it is very realistic that I can retire early, the devils in the details. I also have both long term and short-term disability policies which I will continue renewing through 62, unless I retire early.

    Currently, I’m enjoying my career and have been focusing on moving my free time towards a retirement mindset because I think it is a healthy way of valuing time.

  8. Hi Sam, with all the talk of amount needed for retirement and “it’s not as much as you may think”, it would great if you could put together a budget of estimated expenses in retirement for a pre-Medicare eligible retiree. I’m in Los Angeles and I loved your post detailing the middle class budget for $300k in earnings – it was spot on. Will you a create budget for how a 60 year old retiree with only $1M in savings (per your post) would need to spend?

    1. Hi Patti,

      A lot of these budgets vary depending on lifestyle. So I think it would be great. If you actually put together a budget that you think would work for you and your situation. The more budget examples we can see, the better I think.

      Maybe in 10 years, I can put together a budget for what I think a 60 year old family will need, as I’ll be 56 by then.



      1. Hi Sam, I couldn’t possible retire on $1M. I’m 58, divorced, and have just under $3M – my planner says I need to work at least another 3-5 years. I’d love to be done now! If I could make a workable budget that would say I could retire now I guess I’d be my own CFP!

        1. I’m curious as to why $3 Million would not be enough to live on for a single man unless you’re paying huge alimony every month. Do you have any debt (Mortgages, car loans, credit cards, etc.)?

  9. Vince Westin

    Plans for retirement can be helped by downsizing your home for retirement. Not just smaller, but further from high costs (no need to live near work anymore). And being mindful of operating expenses of the home (condo is no yard work but monthly fees).

    With higher incomes and planned large RMDs, converting IRA to Roth can be a huge savings for the future. The additional fees for Medicare based on (RMD) income should be included in the calculations – they can be $5k/y per person. Roth withdrawal are not income for Medicare or SS taxing.

    Waiting to take SS at 70 can generate more money for the ‘very long life’ scenarios, even if that is only 85+. The longer it lasts the bigger the benefit.

    We set a high target for retirement funding, which included Roth conversions (so after tax money) and no debt. Not easy, but gives us comfort in where our finances will be. We are traveling early because we have watched the lack of mobility or other physical/mental challenges hold others back if they waited too long.

    It all comes down to the lifestyle you plan to live. And being willing to adjust your lifestyle in retirement to align with your resources.

    We all hope that they don’t cut SS payments by ~30% when the ‘trust fund’ money is depleted around 2035. If only congress had invested the excess rather than commingling them with the general treasury, the gains would have extended the solvency much further.

    1. The whole social security going broke talk is a political gimmick to soften the public up to a cut. At previous times this would have been very unpopular, but a certain political party has made a mission out of trying to cut the system as it is. The treasury at any time can make it whole by issuing monies to cover the plan. Although the government has borrowed from social security in the past, it has been paid back in full by the treasury. It is a myth that congress has somehow raided the system and also has done so without a law being passed and signed by the president.

      The trust fund is really treasury IOU’s. They are not marketable securities. There has never been a pool of marketable securities that increased when tax revenue was flush. It is basically an annual surplus and deficit. Basically, social security was set up to be politically palatable over 80 years ago by selling it as self-funding. Also, the payroll take was created to give a feeling of ownership over the program. But it has caused a problem and given ammunition to people who want to hand it over to wall street or to gut it by taking away COLA, cutting benefits or doing nothing and hope it will be someone else who will take the blame.

      The silly thing about social security is the fact it has a threat of being underfunded. The public never hears about the other programs. For example, the National Defense Budget. It is fully funded without much notice yearly, of course we have the abortion access thing this year and people are hearing about it. Most often nobody really hears about it. It is funded in a blink of an eye. The current defense budget is 842 billion and SS this year disbursed 1.02 trillion.

      There is nothing like social security. You cannot replicate what it provides. Social security protects against longevity risk, inflation risk, and sequence of return risk. Stocks cannot do this. They always have risk. It does not matter how long you own them. They are risky at any duration. Social security, as an insurance product and a safety net, cannot gamble based on stocks. Once placed in stocks, it will have a sequence of return risk, inflation risk, and maybe longevity risk. Just look at private pensions that don’t have the benefit of being the sole issuer of the currency that you collected to invest in the stock market.

      Social security can be fixed and made whole just as easily as sending military aid to Ukraine, creating a vaccine in record time, making a nuclear bomb to drop, going to the moon. All it takes is political will and ownership of the political decision. Most of the public believes it is a good program and whether you are rich and soon to be poor or poor becoming rich, social security will be there.

      1. All of the risk of social security has been taken when you fund it from your paycheck. You never get what you put in. All of the loss is immediate. So, when you say there’s nothing like social security, you’re right. It’s an instant loss.

        1. When the stock market goes down 50% or more, will SS still be paying benefits? If you get in a accident, will you get social security? If you live a really long time, will you outlive social security? You can’t replicate it. Does anything give you guaranteed inflation protection, not just theoretical inflation protection? TIPS, maybe, if you’re holding them at the right time. Stocks are just theoretical and the past is no guarantee.

          Usually the people who are against SS either have enough or think they do. People under appreciate risk and overestimate their abilities. The rest are too poor and don’t live on the ocean sides of the states, whether they under appreciate or overestimate, they are covered.

  10. I lot of my relatives live off social security and they seem to be doing just fine. I know a guaranteed, COLA adjusted income is what most people need and want. SS provides just that. I retired from the military and my pension works like SS. I also have about 3 million saved. It is scant amount compared to financial samurai folks, but I really will not need it for my living expenses. I believe that COLA sourced income likely lower people’s need for large balances. Life is not too expensive if you are simple.

  11. I want enough in retirement to ensure we can live as well as our health permits and to reassure us that we will never have to worry overmuch about outliving what we have, regardless of what good fortune and mad science may do for our health.

    The only way I know of to do this (besides large inheritances) is to ensure a steady supply of passive income allowing retirement take home to meet or exceed take home while working. This, coupled with a portfolio that outpaces inflation, as well as any occasional drawing we call on it for until age 75 when RMDs kick-in. Even after that point, whether we use all the RMDs or not (unlikely), the portfolio should continue to grow, with reasonable returns permitting billionaire (or even multi-billionaire) status well before we reach 150.

    Do I expect us to live to 150? Well, no, not so long as billionaires keep dying of old age related maladies. But it’s comforting that’s the way it all works out on my spreadsheets.

    1. Perpetual passive income is the key!

      I am good point on if billionaires are still dying before 100 years old, then we have to face the reality that extending our lives beyond our natural point is on feasible, no matter how much money we have.

  12. The Alchemist

    By all means, Sam, broaden your target audience, but I beg you, refrain from using the now-badly-tarnished “I” word.

    Too many such words have been warped by a small but determined and hyper-zealous segment of the population, such that they now leave a very bad taste in the mouth, despite their formerly positive connotations.

    But otherwise… nice post! :)

      1. The Alchemist


        You’ve been out of the corporate world long enough that you likely haven’t been subjected to the linguistic manipulation, Sam. It’s a serious benefit of FIRE and EffU $, no doubt about it!

        HR, corporate ads, academia, government publications…. they endlessly hit you over the head with certain supposedly “positive” words that wind up becoming threats to conform or bear the consequences. The man who has yet to be pummeled with this stuff is fortunate indeed!

        1. I’ve worked in corporate America for the last thirty-four years. I don’t agree with your post at all. In spite of many organizations trying to improve diversity and be more inclusive, it is statistically obvious that we have a lot more work to do. Being aggressively “woke” or “anti-woke” is not helpful.

          1. In my experiences with Corporate America, organizations have largely succumbed to “Group Think.” The contributions of “I”, the individual, which used to be radically celebrated and held to a high standard have been drowned out by the need for everyone to receive a trophy and pass credit to “the team” even when it isn’t warranted because that is what politically correct people do now. Individual initiative is frowned upon if it is considered too overt and must be somewhat camouflaged so as not to be perceived as self-promotion.

            I am so happy to be out of the alphabet soup that feeds the dumbing down of Corporate America.

  13. Thanks for your article. I’d elected to take an early retirement package in 2020 from my company whom I’ve worked for over 25 years. In making this milestone decision, I had to plan out the next 3-5 years of finances since I am the sole income that supported my family’s cost of living finances. I took a majority percentage of my package to pay off my remaining debt (home mortgage, car loan) and after 3 years into retirement, only have debt related to normal cost of living (income taxes, RE taxes, food, utilities). Long story short, I think I planned well but still question if I have enough to live into my 80’s, God-willing! I live in NYC where it’s the prime cost of living. Can you share your insight what is a reasonable ‘net worth’ (property assets, bank savings, IRA) for a borderline upper middle class family of 2, my wife and I (my child is already independent and no longer in need of my support)
    Thanks in advance.

      1. Thanks for the link. Based on your age to retirement NW grid, I’m not 20x to be financially independent but closer to 12.5x with no major debt. I think it is an important note once in retirement years, reducing your annual taxable income percentage will help you save long term. I currently can live with gross income that can sustain a 12% Federal tax bracket vs being in 22%-24% bracket during my working years!

        1. If you have any pre-tax retirement funds (401k, 457s, etc.) be sure and model what happens when you hit 75 and begin RMDs. Depending on how much you have socked away, it could suddenly jump you more than one or two brackets.

          Given your 12% marginal rate though, it might (or might not) be a good time to consider backdoor Roth conversions before that happens. Be sure and factor in state income taxes as well, if you are living in a state that has them, or that doesn’t grant a large exemption on drawing from retirement accounts.

      2. Sam, I think you should modify your rules-of-thumb here to take into account SS, Pensions and Annuities. Telling someone they have to have 20x income saved when they might already have 50% of their income or 60% of their expenses covered with fixed or passive income would be discouraging. If you told them they need 20x of their “non-replaced” income, would be a more achievable number, ie, you make $100k, replacement $50k, only need $1M vs. $2M.

        1. Yes, that makes sense. And I don’t say people must need a net worth equal to 20X income: it’s just an ideal target: I talk about 10-20X range for financial independence to start kicking in.

          I write that the value of a pension is worth a lot. Too bad fewer and fewer people are getting one.

    1. I’m confused–why would you have debt from “income taxes, RE taxes, food, utilities?” Do you mean expenses?

  14. Median household income of $70K x “replace 80% of your income” x “rule of 25” = $1.4M. I suspect some of the mismatch in the survey is that people know the “right” answer to the question, even if they aren’t living it.

    My father-in-law worked well into his 70’s even after he had to. Work was a part of his life, and I’ve never met anyone so resistant to change. My best friend’s dad retired early with not nearly the retirement savings to make that work – maybe he’ll scrape along with social security. Maybe he’ll have a short retirement – he never took much care of his health. An uncle went from a well paying tech career he hated to a shack in Florida and seems quite happy living on very little a day. Lots of paths through life, some planned and some not.

    I’ve always appreciated your content, for what it’s worth. I have friends with good incomes struggling in high cost cities (and friends without good incomes really struggling in high cost cities) – it was helpful to get a deeper insight from someone in their situations. And over the years I’ve chosen work and coworkers I enjoy (and the costs of 3 kids) over maximizing income and savings, and it’s been helpful to have your tables (unrealistic as they may be) to check on how I’d be doing in another life where I made the sort of choices you did. You seem happy with your journey. I’m happy with mine. Lots of paths through life!

    Anyways, I appreciate the authenticity in your writing more than anything else, whether that’s relating the path to a comfortable early retirement, or engaging earnestly in questions about other options.

      1. Historically withdrawing 4% a year (increased annually by inflation) usually lasts at least 50 years, although with bad luck as little as 35. (4% is 1/25, hence x25)

        3% was always above 50.

        6% lasts less than 20 years in some cases.

        Sam wrote some articles about using fancier metrics like treasury rates to generate a more dynamic withdrawal rate.

        So no, at 45 you should probably think more like x35, and at 75 you might get away with x15. It’s all probabilities, so the more flexible you can be with cutting back spending during recessions (or going back to work) the less you need. On the flip side, the more you want to protect against worse and worse luck, the more you need

    1. Thanks Paul!

      “ Median household income of $70K x “replace 80% of your income” x “rule of 25” = $1.4M. I suspect some of the mismatch in the survey is that people know the “right” answer to the question, even if they aren’t living it.”

      You say this well. But I will bet 70%+ of Americans do not know or think this way! Just do a survey along your colleagues and friends ask how they would calculate how much they need in retirement.

      In terms of my Wells Fargo amounts, when I go to noticed, is that many readers have told me how they didn’t believe 10 years ago, but I have surpassed my talking about 10 years later. The bull market and the power of compound returns and aggressive investing really creates magic!

  15. I understand the thinking of “just one more year.” This despite I’ve done the math and am committed to not staying a moment past my target date. With no more retirement contributions, no more state income tax (mostly), no more union dues, parking, etc. our take home will actually go up a bit. I expect my wife will have no problem finding things to do with the extra.

    My goal is to keep her attention diverted away from the portfolio (about half of which is in pre-tax retirement funds) until we have to start taking RMDs at age 75. I don’t expect to be wholly successful, but it’s picked up a momentum of its own and, with any luck, it will still grow quite a bit faster than inflation and easily overcome her drawing and then some. We will see.

    My other aim is that I want to move out of the city and get a slightly bigger place with a bit of land around it. She was initially onboard but, as the day grows closer, I’m hearing more hemming and hawing.

    1. Change is hard. I also have a difficult time in the beginning, convincing my wife to move houses. She is easily satisfied, which is great.

      What is your target date? I’ll help hold you accountable! I left 5 1/2 years before my target. Date of age 40 in retrospect, I probably should’ve stayed one or two more years. But if I stayed one or two more years, I probably would have delayed having children even more, which is already a regret of having them late

  16. Your work is really important and helpful! Great info shared in a relatable way (talking about your family, your life decisions, your real estate decisions) that helps provide context for your approach. I’ve been a follower for quite some time and find myself sharing links to your articles frequently. I hope my friends and family follow along. It’s helpful when you explain complex financial strategies and provide links to earlier articles, etc.. for additional background. I also find it helpful when you get really basic as I those articles I share with my younger nephews and nieces as things for them to consider as they embark on their careers. For myself (high income earner who was under maximizing investments) it has been great to hear ideas about different types of investments and to see the charts on savings levels, etc… Stuff I never learned in school that has helped me retire in my early fifties. Thank you! Keep up the good work!

  17. Keep crushing Sam, and if you feel called to change it up in order to serve a broader audience then go for it.

    Creators need to change based on what feels authentic to them in any given phase of life. Otherwise, the content becomes stale, and the creative experience is boring.

    And the more masterful you become at your craft, the greater impact you can have while still remaining true to who you are and what you believe.

    I think the balance of demonstrating what’s possible and what we can aspire towards, while also keeping it real and talking about your journey and the old days, is incredibly helpful to many.

    If people feel “excluded,” maybe they need to start with a RS approach – like a super simple starter post to really hammer in the basics of earning more, saving hard, investing simply, and enjoying the process.

    Youve got this Sam – can’t wait to see the evolution!

  18. Writing to make financial advice more inclusive by relaxing the guidance is going backwards in my honest opinion. I’ve been following this site since 2014 very closely. In 2014 I had around $70k in debt. My net work now sits at about $2M. Much of the discipline I have came from your models and story’s on this site and if I thought I could do much less there is no way I would be where I am today, which is very comfortable and happy.

    Don’t change your tone. Saving should be hard but the reward is great.

    1. Financial Samurai

      A lot of good doesn’t come easy, that’s for sure. I have always liked people to challenge me as much as possible so I can see my limits. But I understand that some people get defeated by being challenged and don’t even start so it is a fine balance.

      The good thing is that writing about topics that can include more people doesn’t exclude the people who want to read about other topics. This website is a strong train that can carry many things.

  19. It is amazing how much money people waste on a daily basis. A $4 latte here a $20 lunch there. That is the retirement money that people say they don’t have. I have a saying for people that nickel and dime in certain areas but not others. I say it all the time, penny wise, dollar foolish. When I quit my job I was relentless at cutting costs while maintaining the status quo. Most people are wasting thousands of dollars per year on stuff that they could get from another company cheaper.

    I had a very expensive Internet and cable TV package and when I switched providers I saved $2000 a year. I also moved an old phone line to a free provider saving hundreds per year. Nothing has changed in my life except the bills have gotten smaller. When I tell people they could save thousands by switching providers for things they have it is funny to see the response.

    I know some older people who still pay for an old copper landline. Who does that in 2023? Well apparently more people than I thought. It is $500 a year they are wasting that could go towards savings or investments. Oh well. More people need to read your website and many of them will get a taste of it online like I did. I thought the charts on here were silly and unrealistic and then I did it. Wow compound interest rocks and I will never look at money the same way again.

    Thanks as always for the articles and for sparking conversation. The older generation has tons of assets, but many people that are retired do not understand compound interest or what the cost of that daily lunch really is long term. It is the little things that allows the magic of compound interest to work for people over the long term. Imagine if Americans actually saved and could live off interest payments in retirement instead of needing social security. Our nation would be in much better shape if people understood how to get on the right side of the compound interest equation.

    1. I appreciate you reading and sharing my work.

      This comment of yours suns up A LOT of the change in feedback I have experienced since 2009.

      “ I thought the charts on here were silly and unrealistic and then I did it. Wow compound interest rocks and I will never look at money the same way again.”

      It took maybe 10 years of getting battered, criticized, and badgered from some readers. At times, I thought about just writing the basics of budgeting and hiring freelance writers to write more vanilla topics.

      But when you believe in something so much, you keep on going. Because you believe, eventually, people will see what you see, and things will be better.

  20. I think you’ve occupied a particular niche in on-line financial education. Your readership is likely more highly educated and higher income earners than the average…and that is ok. There is still a need to financially educate these type of people and you can not “reach” everyone. There are plenty of other financial blogs out there that discuss personal finance 101, your site just happens to target more advanced personal finance issues. Despite this, I feel the majority of your articles should be relatable to most and if the exact numbers don’t jive with the reader’s personal experiences, well, they should be able to extrapolate the overriding message that you are writing about and then apply it to their financial life. If I came across this website in my 20’s, I likely wouldn’t be able to follow a lot of what you were saying, not because it was too complex, rather at that time in my life I never met a dollar that wasn’t meant to be spent and I never wanted to think about being financially responsible. You are doing many people a great service, keep up the strong work and remember, you can’t please everyone.

    1. Thank you CMAC. I think the problem is it is hard for some people to not get mad at some figures or extrapolate some of the messages to their own lives but I’ve also got to be true to myself, and what I think works.

      “ If I came across this website in my 20’s, I likely wouldn’t be able to follow a lot of what you were saying, not because it was too complex, rather at that time in my life I never met a dollar that wasn’t meant to be spent and I never wanted to think about being financially responsible.”

      Love this! It’s funny how we change over time.

      1. Hi Sam you reek off a non target school graduate , who was not good enought to hold on to the tier-1 investment bank job he lucked into . Most of your articles are a coping mechanism to this fact . Don’t you wish you had amounted to something serious , rather than sliming away a nickel and a dime from your readers by posting the same regurgitated fluff every chance you get . Something to think about .You are no ninja Mr.Dogen but more like you know what .

        1. Thank you Ram. I agree, I am a public university graduate and perpetual failure. But I am free, which is what matters most to me.

          Sorry you feel nickel and dimed. I am happy to refund you the amount of money you paid to read this post.

          Feel free to share something about yourself. I’m always interesting in learning more about successful readers and the strategies they used to get to where they are.

          1. re: “I am happy to refund you the amount of money you paid to read this post.”

            Sam, you are SO funny!

            There are two applicable sayings: (1) “What do you want for want for free?” and (2) “You get what you paid for” i.e., if it’s free, it must not be any good, or if it cost you nothing, then don’t be surprised or disappointed if you get nothing in return.

            Your content completely obliterates both these sayings. Your content is very well thought out, well researched, and well written. Thank you for not putting it behind a pay wall.

            Does all 100% of your content apply to my personal situation? No. Do I agree 100% with all your content? Well … since I can’t guarantee I’ve read 100% of your content, this answer has to be “No” also. But I do have the wherewithal to apply what is relevant to me and ignore what appears not to be. And hopefully I also have the wisdom to realize something that doesn’t currently apply may apply in the future!

            After all, you’re not forcing me to read your content. No one is forcing anyone to read your content.

            Keep up the good work, while still maintaining your personal work – oops! I mean RETIREMENT – life balance of course!

  21. Wow that is a huge spread. I hope more people will learn how to better handle their finances with help from sites like yours. I’ve learned so much from you over the years that has really helped me accelerate my savings, investing, and preparedness for retirement that I otherwise wouldn’t have done otherwise. So thank you for everything you do!

  22. Still Learning

    Hey Sam, great article.

    It’s interesting – I had similar conversations with my parents and a great friend just yesterday (completely unrelated conversations from one another).

    My wife and I are both 29 and so far have saved around $150,000 between 401k’s and Roth IRA’s since we started working at about 22-23 years old. We save about $2,000 a month and it doesn’t feel like it’s nearly enough. I do worry at times but we can only do our best and trust in the Lord for His provision.

    During my conversation with my parent (nearing 70), they thought I was saving far too aggressively and needed to scale back. However, they both retired with great pensions from careers in law enforcement years and years ago.

    I told them that, since I won’t have a pension, I feel like I need to save 10x more aggressively to reach the same middle class retirement lifestyle that they have.

    I then talked to my good friend who is also my age. He just started learning about finances and saving more aggressively just recently. Prior to that he was saving around 5-10% of his income and not really thinking much about it.

    I feel so grateful that I found sites like yours (and many great finance YouTubers) when I started working. I’ve made a lot of mistakes along the way and have spent money I wish I would’ve saved instead. But overall, I am glad we began saving a small chunk of our income before we had the chance to get used to living a lifestyle that required the money we now save each month. It’s easier to save when you start out doing it than if you have to scale back your lifestyle to save.

    Also: yes, your content can go over my head at times. Yes, I stopped reading for a time because of that (when I was around 20). But, I came back, kept reading, and pushed myself to learn things that previously went over my head. I think, because of what I’ve learned, my family will be much better off than was ever possible before. I had never learned about finance prior to finding your site. For that, I am grateful for your challenging content.

    I say that “more relatable content” is really in the eye of the beholder. Everyone will have an opinion on that and you’ll never be able to please everyone. I just love that you’re doing what you can to help others in a way that is honest to your experience. I hope that any of us who feel as though the content is too challenging will commit themselves to learning and deepening their understanding of such an important topic instead of clicking off the site like I did.

    Sorry to write a novel. I guess I just want to say thank you and keep doing what you do. I’ll keep on reading one way or another!

    1. I always love a good novel, so thank you.

      Great job U2, saving aggressively and so much at your age. You will not regret it when you’re older, this I can assure you!

      Yes, the value of a pension is worth more than pension holders realize. It’s a different world now, then our grandparents world, and we must push on and rely on ourselves as much as possible to achieve the Wealth that we want.

      “ Yes, I stopped reading for a time because of that (when I was around 20). But, I came back, kept reading, and pushed myself to learn things that previously went over my head. I think, because of what I’ve learned, my family will be much better off than was ever possible before. I had never learned about finance prior to finding your site. For that, I am grateful for your challenging content.”

      I’m glad you came back! And thanks for sharing my work.

  23. Hi Sam, thanks for all your great insights – I always look forward to reading your posts. This one scares me. It may not take everyone 1.6m to retire, but it’s sure going to take more than $110k no matter where you live. Medical costs not covered by Medicare alone could eat that up with longer life expectancies. I am all for being more inclusive, but I wouldn’t back off the sound advice. Maybe some additional context for those that live in areas with lower costs of living/are happy with simpler lifestyles? Always better to be prepared and have options than be caught underfunded IMHO.


    1. Yes, I agree on always better to prepare.

      The good thing about being scared is that you will take action to be less scared. Seeing the data is eye-opening. But it should help motivate people to save and invest more.

  24. Hi Sam. I truly enjoy your writing but I agree with your comments about being more inclusive. I am 56 and unfortunately I was not in a situation, for many reasons , including being an addict, where I could save and invest until a few years ago. I worked very low paying jobs just to get by and most times I was lucky to afford groceries, let alone save. Fortunately I have been sober 10 years and now earn a good living making 60k. Not a lot by some standards but I am very grateful that I had this job fall into my lap. Like you father-in-law, I live in WV where the cost of living is lower than most places. But things are not as cheap here as some thing. I now save and invest 20-30 % of my income. I have around 100k in various accounts, which sometimes shocks me considering where I was 10 years ago. Some of the articles out there saying I will need a million to retire or people whining that they only have 500,000k saved really scare and make me feel hopeless. I can only do what I can do and save/invest and I have let go of the thoughts (most of the time) that I will be destitute later in life. I believe life will provide as long as I try my best. Probably TMI but I just wanted to share my experience.
    Again, thanks again for everything you do.

    1. Thanks for sharing Howard. Congrats on your progress, you make some very good points. I think Sam has multiple stakeholder groups on FS and one size does not fit all.

    2. Great job kicking the addiction, Howard! And well done, saving more and gaining great momentum in your finances. Progress is my one word definition of happiness. And you are making great progress!

      Thanks for sharing your story. It helps give me perspective and I am proud of you.

      We all have different challenges and demons to face this result, I hope all of us can be supportive and empathetic.

      Fight on!

    3. The Alchemist

      Bravo, Howard! Great work turning everything around and heading down a positive path now. You’re an inspiration— thank you for sharing your story.

  25. The 401k system was never designed to be a single source of retirement for the average emplyee. Because of the corruption and theift of the defined benefit pension in the 70’s and 80’s, then the wholesale decimation of the blue collar worker throuh the closure of factories nation wide, many remaining businesses began to introduce 401’s because of the cost of maintaining the traditional Defined benefit system.
    401k’s took the maintaining of the pension out of the hands of the company and placed it in the hands of the employee. Who for the most part have very little to no exprience in the complexities of money funds nor investing; all the while fund managers rake in profits from nickle and dime fees placed in the funds themselves. All the while these 401k’s are tied to the stock market increasing the volitility of the meager earnings and constantly placing those earnings at risk for those who have save for a lifetime. It is no wonder why there are those with so few earnings in their funds today.
    You can’t supply a retirement system that’s rigged to fail for the average american employee and wonder why.

    1. Financial Samurai

      Yes, I’d rather have a pension than a 401(k) any day. But we’ve got to make due with what we have and take advantage.

      I hope my writing and recordings on the 401(k) and literature and recordings by others help educate folks about the necessity of contributing to tax-advantaged accounts.

  26. I used to expect an amount of $1.3 million to retire by the age of 43. I am 39 currently and hope to in retirement spend 3 months to 1yr in a different country. In preparation of retirement , I began to buy less of things I won’t need in the next 6 months for instance bought less clothes, less gadgets, etc. My renovations on my house has finished as well now and I found my yearly expenses halved to $20,000. I work less now, spending more time in hiking, museums and sports which don’t cost much. My retirement amount has since dropped to $1m at age 41 when I plan on doing 1 to 2 years of full retirement trial run and can still return to work if it does not work out.

    1. Financial Samurai

      Sounds like a plan! Try before you buy and pretending you are already retired and living off your assets or a lower income is a great strategy.

      It’s also FUN! You’ll find it exhilarating to do the test trial and then adjust accordingly. GL!

  27. I agree the disconnect surrounding perceived retirement needs and actual saved dollars is difficult to explain. I suspect commonly it is the unexpected expenses that justify the “I will put some money away next month” rationale.
    One of the best things I ever did was direct my bank to send a set amount to a separate savings/investment account ( on top of my regular retirement accounts) with each paycheck. We never “saw “ the money, but it quickly added up. Several times it saved us from the unexpected large expenses that pop up during life and allowed uninterrupted retirement funding.

  28. I do have an opinion about your comment around you being more inclusive. I have to admit, I’ve walked away from your blog too many times to count because your articles were so far over my head and I got bored trying to decipher your content. I figured all your readers had a Series 7 and I was the only one trying to google every other word to understand what you were saying. Happily, I didn’t walk away forever and I actually enjoyed “this article” because I could relate. I’m not here to offer any suggestions on how you can write articles that will keep all of your followers engaged, that’s your job, but I would like to see more content that I can read and relate to. Thanks!

    1. Ah hah! There you go. If I’m writing about things people don’t understand or are unrelatable, am I still able to effectively help others?

      It’s a balance between writing what’s interesting and true to me versus what others want.

      I hope you have at least picked up my book, Buy This, Not That, which I think is very relatable to most. It is a National bestseller after all.

      Just one thing. I wouldn’t use the word “job” for my activity. If I felt like this was a job, I’d stop writing so much.

      Feel free to make topic suggestions as well.


      1. For me, it’s not that your topics are not relatable, it’s the way the articles are written. I looked on your website to see if I could find past articles to give you an example, but I didn’t see an archived section, although that would be great if readers could reference back to all your articles. You obviously are highly educated in finance (I read your background) because it shows in how you write your articles. I personally find some of your articles, but not all of them, way over my head. I’m beyond finances 101, but I’m also not at a Series 7 mindset either. You write what you know and based on other reader’s feedback, your articles are appropriate for their level of interest. I know this isn’t a job for you, but a true passion. What I meant is you will figure out how to write your articles based on who follows you, your interests and how you want to grow your blog. I’ve come to the realization that you will have articles that I can read and walk away with some important insights, and other articles that once I start reading them I know instantly this is too much to handle and I click on the upper right-hand corner X and then wait for the next article. Thanks!

      2. Agree with OP, and would say that I’ve enjoyed the articles where you post links to explain complex financial concepts. Super helpful to be exposed to a lot of these concepts and to be exposed multiple times. Eventually, it sinks in. ha ha ha

  29. Yes! Would love more relatable content. Student loan debt and childcare expenses are currently challenging me in my 30s. Curbing lifestyle creep as a homeowner and parent is tough too.

    1. I hear you on childcare expenses and debt. Managing everything while raising kids is a struggle.

      Check out my search box on the homepage to type in other topics. Chances are high I have addressed them before.


  30. Hi Sam, great article and thought-provoking content as always. This may be an unpopular opinion, but I hope you continue to keep writing content about the financial standards households face living in the most expensive cities. As someone who lives in NYC, works in finance, and has many friends in NYC/LA/SF, I can really relate to your writing/views and find that you are the only resource that speaks so well on this type of content.

    By all means, please be more inclusive but don’t forget the ones who’ve been coming here for your original content! Thanks.

    1. Sounds good Jerry. I will continue to have a mix of various topics. I do another day, I like to write things from the firsthand experience.

      And if you’ve enjoyed my writing all these years, I’d appreciate some support with a review of my book on Amazon and my podcast on Apple.


      1. I echo Jerry. Same NYC and finance and hard to find anything relatable. My biggest continues to be when to just call it quits. That deferred comp is hard to walk away from?

          1. Totally Sam. Can’t leave 7 figures on the table….

            Tricky to get that package sometimes these days, they can freeze you out and make life very terrible. Let’s see how this bonus season plays out!

  31. While I do not recommend it, I have been heartened by stores of friends who have been laid off. To a person when I have asked them how they are making ends meet, they have said it has surprised them how little money they need when they need to focus on spending less. Another way of saying this is we Americans are pretty good at flushing money away on wants, and not needs.

    While I don’t want to have to be frugal in retirement, it is a whole other level to fear destitution.

    1. Yes, indeed. I definitely discovered that I needed much less in with Herman to feel comfortable and happy as I thought. Just the fact that I don’t have to save for retirement anymore in Retirement, “saves” me 50%+ in after-tax income because 50%+ was my lifelong saving rate.

  32. I suggest trying to reach the young. That’s where compounding starts mattering the most, right? Get a teenager to fund 3k a year into a Roth IRA and you’ve got a likely got a retired millionaire, right? That’s who I spend most of my time preaching FI to.

    How can Financial Samurai accommodate and reach out to teenagers? TikTok? Working with schools? Creating curriculum that teachers can use? (I’m selfish here: I’m a middle school teacher).

    1. Not sure. But as a middle school teacher, you have the ability to affect change by referring my work to them!

      It is hard to teach everybody everything. People need to want to learn and change. It’s hard to force knowledge on anybody who doesn’t care so much.

      What over the long term, people are rational. And they will take steps to find answers to problems they have.

  33. Two scenarios:
    My parents-both in their 80’s; mother has dementia and my father and sister help in her care. They did a lot of RV’ing in their 60’s and 70’s. Now? Not much. Sit at home and wait to die.
    My wife’s mother(widow)-also in her 80’s. Still drives, travels, and takes a walk every day.
    Moral of the story? You never know what life is going to throw at you.

    1. Indeed. Try to live your best life now before it may be too late. At the same time, one needs strong finances to potentially do so.

      I left work at 34 to hedge against an early death. Now I’m trying to stay healthy for my young kids.

  34. It’s nice to see you have a bit of introspection to realize your raw number values don’t apply to the vast majority of readers.
    I’ve always thought your “middle class lifestyle on 500k” and similar types of posts were always wildly optimistic and designed to create rage and viral social media sharing. There’s nothing middle class about a luxury vacation every year! Even my high earning friends saved for years to afford their recent japanese getaway.

    Personally, I’d like to see more posts for the people that aren’t high earners. I’ve met lots of highly skilled people in the midwest specifically who are earning far below what their skillsets would suggest. I’m talking world class IT, and scientific professionals failing to break the 75k mark.

    1. Sounds good. The middle class lifestyle post was using a $300,000 figure, not $500,000 figure btw. When the cost of housing in some cities is $1.5+ million for a median home, that’s the unfortunate reality.

      See Jerry’s comment above. The $500,000 figure was to explain WHY some households can never achieve financial independence. Rage and vitriol come from people who have rage and vitriol. Not from me.

      I’m happy to mix things up! And if you have suggestions, let me know.

  35. The gap between expectations and the actual amount saved is huge. Life just gets in the way. People need to lower their expectations. Live more moderately while you’re young so you can live moderately when you’re old. Just my opinion.

    Personally, the minimum I’d need for retirement is $1 million. That should enable me to live a comfortable retirement. Social Security will help out.

  36. I wonder what was the poll question that was used to determine “Expected amount needed”. I could not find it.

    For instance, were the cohorts asked how much monthly income they would require in retirement, then this was back-calculated to a savings amount? If so, then we only proved that people are bad at math.

    1. No. The poll questions asked each age group how much money/wealth/net worth is required to live a comfortable retirement life, not income and asking folks to then come up with a figure.

      1. Thank you. I reached out to Northwestern Mutual and the specific questions asked in 2023 are:

        “In a specific dollar amount, how much do you think you will need to save in order to retire comfortably?”

        “How much money do you have saved for retirement (from all sources including 401(k), IRA, pension, bank accounts, etc.)?”

    2. Sorry, 20-somethings

      That’s just about exactly what I have been thinking. Asking people what they think they need for retirement only indicates they don’t think about retirement enough to give even an educated guess. Head in the sand survey takers demonstrate what, exactly? The level of self-delusion we are capable of. perhaps. If you think you can retire in 20, 30, or, heaven help them, 40 years on a million or two, good luck is all I have to say. If there is a radical reimagining of society, and things change by, well, a lot, then maybe. But income will have to be capped and an egalitarian society society created first.

  37. Hi Sam. Good article. I was especially touched by your inspiration to make FS more inclusive. While I can relate to a lot of your story, I do understand that you write for an audience that is younger and in a different life situation than I and my family are. I think your writings aimed at millennial coastal families are great, and they cover some of the angst I felt when we were younger and lived on the East coast in a HCOL area. I know I have commented before about some of our life after we left the area and as our kids grew up. We are close to retirement now and I did want to say that part of what you wrote about saving in later years has not been our experience, nor our parents, who are in their 80s. We have all saved a great deal more after the kids were grown and out of college. This last big push helped all of us. In my and spouse’s specific case, as our income rose, we did not upsize our lifestyle, but put the extra towards retirement. We and our parents also paid off our houses before we retired and that made a difference too. Thanks for your thoughtful article today.

    1. Hi Chris,

      Thanks for your comment. I try to write based on the things I’ve experienced and look forward to the things that might need more thought in the future.

      I really appreciate your thoughts and other peoples thoughts about what they went through. That’s why I have the common section and it’s why I really like to understand my readers backgrounds.

      It’s hard to know what we don’t know. So the best thing to do is to hear from other people.

      Can you clarify what you mean by this?”

      “ We are close to retirement now and I did want to say that part of what you wrote about saving in later years has not been our experience, nor our parents, who are in their 80s.”

      I think I said that I was flummoxed people in their 50s don’t save much more even though they think they need much more for retirement.

      Do you feel like you have saves too much at times?


      1. Yes, Sam. What I meant in our specific case was that we were in the part of the baby boom who maybe started out with pensions, but the employers quickly pivoted to 401ks. At the time we were in the HCOL and were not able to save as much as we should have. And didn’t understand it since it was new and we were not finance people. We played catch up for many years once we did become knowledgeable. And I am glad we will be able to retire with dignity in the next year or so. Hope that helps explain things. Our parents saved late also, partly b/c there was a divorce.

  38. The best advice we gave ourselves is to invest all you can in your pre-tax retirement accounts. I really think it helped moderate our “lifestyle creep” from 25 – 40+. When my wife and I got raises in our 20’s, we increased our annual contribution amounts until we were maxing our annual 401(k) plans.
    We do live in a HCOL area, with good salaries, both in our early 50s, and both have in excess of 1.5M+ in our 401(k)s, just staying invested mostly in index funds our plans offer.
    Life does get messy, yet we always felt those funds were mostly ‘untouchable’ and we needed to help fund surprises with other after tax money.
    It may have not been the best strategy from a tax efficiency perspective in retirement, but I’m satisfied and grateful that I believe our quality of life can be maintained with the 401k plus after tax investments in real estate and index funds.
    Regardless of current income levels, it seems if folks can ‘set it and forget it’ in automatic pre-tax savings, they will wake up in their 50s and 60s happy with their accomplishment.

    1. Ron –

      While I was still W-2 employed, my spouse and I used to joke that I never got a raise since whatever raise I did get was primarily used to bump up the percentage of my 401K contribution. We were able to live perfect well before that raise, right? Glad to see we were not the only ones using this strategy!

      I was disappointed we never seemed able to reach the annual maximum 401k contribution, and was a bit concerned that my 401k balance would not be sufficient by time of my early retirement at age 55. But I did have a 3% contributory pension with an awesome 5 year period certain payout, so that MORE than made up for the perceived lack of funds in my 401k.

      Now after being retired for 10 years, completing my 5 year pension payout (most of which went directly into a Rollover IRA), living off IRA withdrawals for 5 years (along with my spouse’s pension and their Social Security), and about to start collecting my own Social Security benefit check in a few more weeks, it never ceases to amaze me that our tax deferred investment balance remains so healthy. Since 12/31/22, as of 6/30/23 we are still up ~$50k even after making ~$110k in withdrawals. Go figure.

      Keep up the good financial discipline in avoiding lifestyle creep!

    2. Yes indeed. Both having over $1.5 million in your 401(k)s is incredible! Sometimes it’s hard to set it and forget it. But thankfully we have experienced a long bull market.

      How old are you two?

  39. Wife and I have about 350k in retirement pensions and another 100k in taxable account and we turned 40 this year. Just started contributing to Roth also. I do have anxiety about retirement savings because I’m a teacher and don’t want to try and relate to kids in my 60’s. Hoping to be done and retire at 54. That’s why trying to build up the taxable acct. Maybe I find something else to do idk. Wife is currently staying home with children which I think is great but I’m also concerned about putting more away. She’s not concerned as much as we have no debt so she’s just like we’re good right now. Anyways hoping to plow some more into accounts every year to make it happen.

  40. Greate article about setting realistic expectations!

    However, I think these surveys are intentionally misleading to scare people into investing more. I agree with the points you made, but I don’t think the savings gap is as big as these numbers would suggest.

    They tend to include people with abnormally low balances, such as low-income people who haven’t started saving or maybe a formerly stay-at-home mom who recently went back to work and therefore has little savings to-date. Additionally, they don’t factor in pensions, which still cover many public sector and some private sector jobs. You put all these categories together and it becomes a significant size group of people with 0 or near 0 retirement savings, skewing the average.

    If you actually took the type of person who might need $1.6 million (probably someone earning $80-120k), excluded those with pensions, and looked at that type of person’s retirement balance at each age group, I’m willing to bet the numbers would look much different.

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