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I come across article after article about what lousy savers we Americans are.
In tandem with these are many articles and posts by the usual assortment of gurus that define what multiple of your current income you should have saved by a certain age.
I do not know if these articles are meant to make us feel bad about ourselves, or make some of us feel better about ourselves because we are “on track” or whether they are meant to spur us into action.
Perhaps all three. When I read the most recent iteration of this in Eric Reed’s March 3rd article on The Street, I felt some mixture of all three emotions, and here’s why.
Reed cites a rule of thumb is to estimate how much you should have saved by income.
Decide the income you want to live on once you retire, then picture your life as a series of benchmarks set by age. At each age, you want a multiple of this retirement income saved up. Your goal is to have ten to eleven times your desired income in savings by retirement.
• By age 30: between half and the desired income in savings
• By age 35: between the desired amount and double the desired income in savings
• By age 40: between double and triple the desired income in savings
• By age 45: between triple and quadruple the desired income in savings
• By age 50: between five times and six…
