Saturday, November 03, 2007

How much money should you have saved by now ?

Sitting here tonight and uber bored. So just poking around the web looking for comparisons of how much other Americans have saved. Keep hearing about the negative savings rate.

Well first we know from this report, that the average balance for all 401K accounts in the US is $121,202. If you are in your 30's (hey that's still barely me !) and have 10-20 years of service the average is $67,002. In 40's with same tenure it is $105,501. Interesting thing I noticed. the report states that there are ~20 million 401K accounts. The total number of employed persons in the US is 146 million .... what are those other 126 million people doing for retirement ?

Ok, those are good stats for 401K accounts, what about people in general ? What should someone's net worth be at any particular point in time ?

Quick and dirty thing I always heard was to take your age divided by 10 times your current salary and that should be your target for current net worth without including the value of your home. So somebody that is 40 and makes $50,000 per year should have $200,000 in net worth.

Why do I obsess ? Why do I care ? .. not sure. I just always feel like I should be saving more.

I LOATH Poker.

3 comments:

susan said...

Quick and dirty method (i.e., age/10*salary) does not work for younger folks. Say you're 25 making $100K per year; it would be pretty hard to have saved $250K in your 3 years in the workplace... need to add some caveats I think.

PrettyPokerBoy said...

True ... hopefully that won't make them depressed and go to the Mall and spend !

Maybe it will light a fire under their butt to save and invest more.

As a wise man always told me, "Better to have it and not need it, than to need it and not have it." -- of course he was talking about firearms at the time, but still relates to saving and investing.

Thanks for stopping by !

QT said...

I agree with PrettyPokerBoy, light that fire! At 25 if someone is making $100K, that's $75K take home. At that age, it should be very easy to live off of $40K to invest and/or save $35K a year and live off of less if you contribute 15% to 401k (assuming company matches 100% because any company paying a 25 yr old $100K has the money for this). So the 401K alone yields $90K without gains/growth of yearly contributions over three years which could easily get you to $250 if you invest in high risk and benefit from high return and does not include any gains from the $35K you invest/gain interest off of.