How much is enough? 10%? 20%? 30%? Is it possible to save too much for retirement?
Thanks for the write-up. I'd love to hit a 20%+ retirement savings rate, but my wife and I (27 and 30) are at 13% right now while saving for our first home as well as a second car. Some of those savings can eventually be re-allocated towards retirement, there are always things in life that need sinking funds. And that's before throwing a dog and eventual children in the mix of a monthly budget. I'm having a hard time seeing how a >20% savings rate is achievable in combination with tithing/percentage giving plus sinking funds. Are there any rules of thumb for things like housing, food, sinking fund allocation that can help isolate where our budget may be a bit bloated?
This was a really great summary of a lot of Money Guy-isms when it comes to retirement, savings, debt, and budgeting. It's really encouraging to see what saving 25% can become while I'm young, especially knowing that I am building some margin for the messy middle coming down the road. Thanks for writing, keep them coming!
I have a goal of retiring early at 50 (not necessarily retire, but reaching FI that working is for fine, not a must), I don't know how much is needed exactly. I started working at year 26 after finishing PhD, have been maxing out 401k every year, previously it is all pre-tax, and then roth, then mix of pre-tax and after tax with in plan roth conversion, with some back door roth conversion. So far, it is been rewarding, especially not do panic selling on Q4, 2018 and Q1, 2020. The saving rate is harder to keep due to salary increase and also child expenses, but try to get 20%+ by maxing out 401k, IRA, FSA, HSA and then seeking some taxable account. Hopefully goal is achieved on time. Thanks for writing it up.
If a person is never able to max out their retirement savings (step 6) but is saving/investing over 25% of their income, can they ever hit steps 8 and 9?