Here’s a crazy stat,
If you had $7,000 put away and invested in the stock market when you were born…
You’d have $1 million by the time you were retired at 65 years old.
It makes you wonder:
“Why TF didn’t my parents do that for me?! I could’ve been a millionaire and wouldn’t have to work my butt off.”
Alas, here we are.
But don’t worry, you’re not out of luck yet.
Whether you’re a young city boi or creeping past your 40s, planning and putting money toward your retirement is always important.
If you remember the 50/30/20 rule…
- 50% of your income should go towards your needs
- 30% of your income should go towards your wants
- 20% of your income should go towards your savings
News flash: That 20% includes your retirement fund.
“Buuttttt Calleeebbb, why should I be putting money towards my retireeemmmeentttt? I’m soo young 😖”
There are 2 reasons:
- Law of Compound Growth
Remember when I said you could turn $7,000 into $1,000,000 in 65 years? The only reason why that’s possible is because of ✨compound growth ✨.
If you wanted to take that money out at 60 instead of 65, you’d only be left with about $700,000.
That’s a $300,000 difference in 5 years.
That’s the power of compound growth.
- Children/Bahbies
You’re going to get old one day.
And if you plan on having kids, it’s your responsibility and moral obligation to sacrifice 10-20% of your income today so you’ll have enough monies later for yourself…
INSTEAD of depending on them to care for you when you’re elderly or indirectly forcing it upon them.
It’s unfair to them, and you’re too much of a big boy/girl not to think ahead and have that covered.
If you don’t see something wrong with that, I would recommend seeing a therapist/psychologist/brain surgeon/mental facility and getting your s**t together.
“Alright Caleb, you’ve convinced me. How can I retire without dying on the Walmart floor?”
So here’s the industry standard you should save up by age:
- 1x your income by 30 years old
- 3x by 40 years old
- 6x by 50 years old
- 8x by 60 years old
- 10x by 67 years old
This is a great baseline until about 50. HOWEVER… I don’t know about you, but I want A LOT MORE than 10x by 67. 10x means the average American will only have about $500k by retirement.
It all really depends on what your goals are:
- Max gains to the moon 😎🚀
If you don’t know how much you want to save or just want to save as much as possible, play around with an investment calculator (You can find a bunch on Google or in my budgeting tool).
You can use this to estimate how much you’ll save for retirement based on:
- Your Starting Amount
- # of years until retirement (just subtract your age from 65)
- Rate of Return (Average stock market growth is 8%)
- How much you’ll contribute over time (monthly or annually)
Play around with this and see how much you could end up with. If you also want to retire earlier than 65, you can adjust the # of years and find your ideal situation.
- Defined end goal
If you know how much you want to save by retirement, you can work backward and see how much you’ll have to save to get there.
You can adjust this inside the investment calculator so you can calculate based on your target.
If you’re starting late or don’t have much saved yet, you’re going to have to contribute a boatload throughout the next 10, 20, or 30 years to have a good amount saved up.
No matter the goal…
Just make sure you lay off the taquitos, put your money away for retirement, and make sure you’re setting yourself up for ✨success ✨.
Taquitos,
Caleb Hammer
P.S. If you want to finish your retirement off strong, check out my investing course.
