In this article I will give you my opinion about how much money you have to have saved at 40 and other ages, and although I will give you exact figures, I think it is impossible to generalize and that what really matters is the path you are following and the steps you are taking, that will be what will really mark your economic well-being.
✅ How much money to have saved at the age of 40
Statistics on people’s savings are scary.
The average savings of the First World countries is 6.1% of their income.
There are families saving between 30% and 50% of their salary, so it is clear that there have to be many others that save 0 to have an average of only 6.1%.
Given these statistics, it is normal for so many people to be looking for how much money to have saved at age 40.
When someone starts to work they head into the rat race, and usually when they are close to 30-35 years old they start to think it’s time to save.
That’s when he looks for how much to have saved at 40, and realizes he’s late.
✅ How much to have saved at age 40 according to experts
There are many theories, but there is a formula that I found simple enough to stand out.
According to this formula, developed by finance expert Kimmie Green, at age 40 someone should have saved the equivalent of 3 times their annual salary.
I mean, if your annual salary is $20,000, you should have $60,000.
According to Green, at age 30 you should have saved your annual salary, and then you should add that amount to your account every 5 years.
Thus, at 40 you will have 3 times your salary, at 50 you will have 5 times your salary and at 65 you will have 8 times your salary.
To achieve something like this, without investing your money, you must save 20% of your annual salary.
But how much money you have saved at age 40 or any other age is not the only thing that matters, it is also very important what you do with those savings.
Saving long term without doing anything with that money is absurd, because inflation makes your money lose half its value every 25 years or so.
Therefore, investing what you save for the future or retirement is critical.
What really matters is not the amount you have, but the freedom it gives you.
Having money gives you freedom and peace of mind, and that’s priceless.
Don’t try to follow formulas that tell you how much money to have based on your age.
Make a plan, control your finances and save and invest money to be more free every day.
Follow your own path, and you will accomplish your own goals.
✅ How much money should i have saved by 40 for retirement
Someone who is 40 years old and does not have a mattress to cope with unexpected events is someone who lives uneasy, someone who lives wishing nothing would break.
The average savings of 6.1% means that for every $1,000 that someone charges alone, they are able to save $61, and that’s too little.
It will be due to lack of education, lack of motivation or the consumer society in which we live, but it is clear that something is wrong.
Don’t ask yourself how much money you have to have saved at 40, ask yourself what you can do to save more money day by day and reach the maximum in the future, of course always living equally well and without sacrificing important things.
My goal, for example, is financial independence, so my savings goal is much higher than 20%.
By saving 20% I will have to work until retirement, and I’m sure I don’t want that.
I don’t care what they say about how much money I have to have saved at 40, because I know that following those tips won’t get me where I want to be.
Ask yourself if you’re satisfied with your current level of savings and the path you’re following regarding your finances.
If the answer is YES, there is no need to change anything. Just follow the same path.
But if the answer is NO, do something, and do it now. Don’t wait a few years or a few days, because that’s what we always do and that doesn’t change things.
By analyzing your current path you can predict where you’ll be in 10 years. Is that where you want to be?[ratings]