Well, that's depressing. Both because the average retirement savings rate is so low overall and because my savings total is more appropriate for someone a decade younger.

That said, I've been hoarding cash and stocks to pay off my house, and the goal is within sight in less than 18 months. I feel like having no house payment (and no debt otherwise) will have a much greater effect on both my ability to save as well as my sense of security.

When my only regular non-discretionary expenses are food, utilities, insurance, and property taxes, I'd be able to live off of a minimum wage job indefinitely if I needed to. Not that I will, but it's nice to know a corporation no longer owns me.

[–] [email protected] 1 points 5 months ago

Yeah, owning your house certainly has value, regardless of the financial impact. Life is all about trade-offs, and it's why I have an e-fund despite investing probably having the better expected outcome.

And the average savings rate is also depressingly low. I'm actually closer to an average retiree than a young hire in terms of total savings, yet I don't feel anywhere close to retirement (and I'm retiring fairly lean @ ~$50k expenses). I just don't see how it works for the average person, and maybe it doesn't, and people just have to drastically adjust expectations in retirement.

[–] [email protected] 1 points 5 months ago (1 children)

I think it's a decent metric. The important thing to know is that no single guide is going to work for everyone, everyone has to adjust it to their situation.

Me, for example, I have a 401K balance of zero. Every time I leave a job, I roll that over into my IRA, then into my Roth. I just like having control over my accounts; 401Ks have too many restrictions. But to each his own.

[–] [email protected] 1 points 5 months ago

Same, I convert to Roth a little at a time to control taxes. I'm in the 12% bracket, so I convert up to the end of that bracket at the end of the year.

That said, 401l does have some advantages over an IRA, such as backdoor-Roth compatibility, legal protection from lawsuits, and the loan option. I don't need any of that, so I roll out ASAP.

So for those kinds of metrics, I just use the aggregate of all of my retirement accounts, so IRA, 401k, HSA, and taxable brokerage. I'm assuming most people only use their 401k or aggregate as well.

[–] [email protected] 0 points 5 months ago (1 children)

How am I supposed to read those savings targets?

Generally I like metrics to see how I compare, but those US-only ones are pretty useless.

[–] [email protected] 1 points 5 months ago (1 children)

It's also averaged across the US, so it's doubly useless. I mostly posted it as an interesting anecdote.

But if you want something similar, just look up average retirement savings in your country. The income multiplier should work across countries though (the 1x, 3x, etc).

That said, if your goal is early financial independence, you probably have better metrics anyway. I just use stuff like this to pad out my milestones, since it's fun to have more things to celebrate.

If you want something more generally applicable (e.g. calculate time to financial independence), I'm happy to make a post about what I'm doing.

[–] [email protected] 1 points 5 months ago* (last edited 5 months ago) (1 children)

Ah ok, gotcha. I've set my own milestones based on a relative savings rate in such a way that x% monthly savings equate to y years of earlier retirement. Never thought of doing it in terms of multiples of annual income since those include my savings rates, and my actual cost of living are significantly below my income.

[–] [email protected] 1 points 5 months ago

Yeah, the multiples thing is not a great way to estimate early retirement because it assumes your retirement spending is directly related to your employment income. That's true for many people with traditional retirement plans though, and it's certainly easier than estimating expenses, so I guess there's merit to it.

Anyway, I just think it's an interesting set of milestones to track. Like, "oh, I'm where I should be at X years old, so I'm Y years ahead of 'normal' retirement." But it doesn't impact my retirement planning one bit though.