How Much Should You Have Invested By Age? (2022)

How Much Should You Have Invested By Age, How much you should have saved and invested by age so first off I just want to say it’s a little bit ridiculous to compare like two 30-year-olds for instance that have completely different life paths.

So for instance let’s say you know there’s a 30-year-old who just went through med school and residency and they’re about to start making you know really good money as a doctor they likely have a negative net worth in the hundreds of thousands.

So they’re probably like negative two hundred negative three hundred negative four hundred thousand dollars for their net worth right so they obviously wouldn’t have too much saved and they probably wouldn’t be investing all that much either.

Compare that to somebody else who decided to go straight into trades for instance and they started making money right away as an apprentice and then after a few years, they became a fully-fledged plumber for instance.

And then they’re making really good money all through their 20s they would likely have a net worth of something like i don’t know 100 to 200,000 so obviously, they would have more money saved and invested now that doesn’t necessarily mean that one path is better than the other.

Over the long run 20 30 years down the line, the doctor would likely surpass the plumber so it’s very difficult to compare all people you know it’s kind of like an apple to oranges comparison in many ways however I did come across a very interesting study by Transamerica center for retirement.

And they showed that Americans in their 20s have a median of 16 000 in savings for their 30s it was 45,000 for their 40s it was 63,000 for their 50s it was 117,000 and for the 60s it was 172,000. now for me the one that’s the scariest to see there are people in their 60s that only have 172 thousand dollars saved that is nowhere near enough to retire on.

And if you’re in your 60s you’re likely very close to retirement now if you look at the averages and you know averages are usually going to be a little higher than the medians because of outliers you know ages 18 to 24 and this is according to federal reserve data ages 18 to 24 has an average savings of 4,700 ages 25 to 29 is 9,400 30 to 34 is 21,000 35 to 39 is about 48,000 40 to 44 is about 101 thousand 45 to 49 is 148,000.

50 to 54 is 146,000. 55 to 59 is 223,000. 60 to 64 is 221,000 and interestingly enough that goes down a little bit from 65 to 69 to 206,000. right so a little bit better if you’re looking at the averages but still not enough to retire on in most cases now that’s what the numbers actually are what I would personally recommend is going to be a little bit different.

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So generally speaking what is recommended is by the time you’re 30 you basically need to save whatever your income is so if you’re making 50,000 a year by the time you’re 30 it’s a good idea to have 50,000 saved and then when you’re 40 it should be three times that much so if you’re 40 you’re making 50,000 a year you should have about a hundred and fifty thousand saved.

When you’re 50 it should be five times that much so 250,000 when you’re 60 it should be seven times that much so 350,000 when you’re 70 it should be nine times that much so that would be 000 and then when you’re 80 it should be 11 times that much so it would be 550,000.

Now chances are in real life your income would go up as time went on so you know by the time you’re 60 you’re probably going to be making a lot more than fifty thousand dollars a year if that’s what you were making when you were thirty.

So let’s say you’re making something more like a hundred and fifty thousand dollars a year when you’re sixty that would be a hundred and fifty times seven which would be one thousand and 1 million and 50,000 so 1.05 million.

Right so that’s just a general rule and this is basically an answer to your question just looking at the numbers and the statistics and kind of like what you should be aiming for but like i said everybody takes different paths.

If you’re a doctor or something like that you might not have a positive net worth until you’re in your mid or even late 30s and depending on what type of person you are you know that could be great for you if you’re someone who really likes to delay gratification.

But for other people that might not be the best opportunity maybe there are other things you could do or you could make more money right off the bat.

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