Question about Finances

[Jaxb]

How much money should someone save up for retirement?

How much money should someone save up just in case he or she loses their job or save up just in case he or she has unexpected expenses?

[Ana Dragule]

Job is usually 3-6 months of living expenses.

Retirement depends on how old you are when you start, but save most of what you can.

[supton]

Bogleheads would ve the place to start.

You should have 3-6 months in cash as an emergency fund, to tide you over in case of emergency or job loss.

I forget the rule of thumb, but in retirement savings it was like 3x salary at age 35, 7x at 45, and going up from there. But that is still a guideline; if you have a pension that can lower the savings required. Working longer means less needs to be saved. Social Security is another source of income.

Usually one needs less income in retirement. No longer commuting to work, car last longer. No need to save money. One has paid off the house and all other debt. So say 75% income replacement may be fine.

Ignoring pensions (like SS) and doing just savings, guess at how many years you will be retired. Figure what you need to spend per year in order to live, then multiple that income by that number of years. Do not forget to take into account taxes, as most (but not all) retirement income is taxable, at least on the federal level. Lastly, with a 2-3% inflation rate, expect everything to double in price every 30 years. perhaps in even less time.

So in short, save every penny possible....

[Jaxb]

Bogleheads would ve the place to start.

You should have 3-6 months in cash as an emergency fund, to tide you over in case of emergency or job loss.

I forget the rule of thumb, but in retirement savings it was like 3x salary at age 35, 7x at 45, and going up from there. But that is still a guideline; if you have a pension that can lower the savings required. Working longer means less needs to be saved. Social Security is another source of income.

Usually one needs less income in retirement. No longer commuting to work, car last longer. No need to save money. One has paid off the house and all other debt. So say 75% income replacement may be fine.

Ignoring pensions (like SS) and doing just savings, guess at how many years you will be retired. Figure what you need to spend per year in order to live, then multiple that income by that number of years. Do not forget to take into account taxes, as most (but not all) retirement income is taxable, at least on the federal level. Lastly, with a 2-3% inflation rate, expect everything to double in price every 30 years. perhaps in even less time.

So in short, save every penny possible....

I'll have that as my goal. I have my house paid off and I have a long way off before retirement so I'm saving a lot.

I forget the rule of thumb, but in retirement savings it was like 3x salary at age 35, 7x at 45

Would this depend on how much one's take-home pay exceeds one's expenses? If one has no debt and one's take-home pay far exceeds his expenses by a large amount, then would he need that much?

[supton]

Probably not. If you make "much" more than you need, then your needs in retirement should be low. But then you could be saving big bucks and thus being able to save much and doing early retirement. Else you risk spending much and getting used to the good life--and then needing good retirement funds.

[JimL]

How much money should someone save up for retirement?

How much money should someone save up just in case he or she loses their job or save up just in case he or she has unexpected expenses?

As much as is comfortably possible.