Retirement
Salary-multiple benchmarks by age, what they quietly assume, why most households are behind them, and how to work out your own number instead.
1
Common benchmarks are 1x salary by 30, 3x by 40, 6x by 50, 8x by 60 and 10x by 67.
2
They assume a 15% savings rate from age 25 and retirement at 67. Change either and the whole schedule moves.
3
The median household is well behind these figures. Being behind the benchmark is the normal case, not a personal failure.
4
Your savings rate matters far more than your returns in the first fifteen years, and far less in the last fifteen.
A widely used benchmark is three times your annual salary by 40. Someone earning $80,000 would target $240,000.
A guideline suggesting you can withdraw 4% of your portfolio in the first year of retirement, adjusted for inflation each year after, with a high probability of the money lasting 30 years.
Read the full guide