I'm 33 and have ~$125K saved for retirement, all of it in Fidelity. My retirement savings grew by ~$30K this year, but Fidelity says I will have $0 left at age 71 if I retire at 65 with an "average" lifestyle for my area.
Is it even possible to unfuck this situation or should I just plan to never retire?
EDIT: Fidelity considers an average lifestyle for my area to be $10,637/month, which doesn't seem unreasonable given another 32 years of inflation.
Are my retirement savings as screwed as Fidelity says?
byu/mildly_psychotic inpersonalfinance
Posted by mildly_psychotic
17 Comments
What are the assumptions it’s making for an “average lifestyle.” Is that what you’re planning?
Why shoot yourself in the foot now because of a future projection that may never happen?
I’m guessing the projection is based on you trying to retire without contributing any more money?
I think $125K at your age is pretty good. You have 30 or so years until retirement. You must have entered the data wrong. Even if you only contribute $15K per years, for 30 years you should have many millions.(I’m not doing your math tonight).
I would check your assumptions. Are you sure you included future contributions?
How much are you saving each year?
You are definitely entering something wrong or live in Manhattan (or both). You are fine for 33.
Have you set the contribution rates for your various accounts in the calculator?
You have 32 more years until retirement.
General rule of thumb is that an investment account will double every 8 years or so. This means your account should have four doublings before you retire.
If you don’t add another penny to your savings, you should retire with: 125000 * 2^(4) = 125000 * 16 = $2,000,000
If you are saving 15% of your income for 32 years, you will have significantly more than $2 mil.
Conclusion: The Fidelity calculator is whack.
If you started the year with $95k and gained $30k, that is an incredible return. What are you invested in?
If you leave that invested in the market, like the S&P500, and never put in another penny, in 32 years at 8% you’ll have 1.4 million dollars. So no, you are not screwed.
Keep investing into your 401k or IRA and you are on the right track.
Assuming 7% return that will be $1M by the time you’re 65 without any additional contributions, but I assume you’re going to be making contributions for the next 30 odd years too so I would say you’re definitely not screwed.
Sounds like they’re trying to skew stats to sell you something, or you live in an area where people burn money to heat their homes
It all depends on your current and future income, and your current and future lifestyle.
You have more saved for retirement than the majority of people in their 50s (quick search shows mean retirement savings around 110k for 50 year olds). I think you’ll be ok. Keep doing what you’re doing. If you get to retirement and don’t have any debts (paid off house) then you need a lot less money to generate income for you.
Ignore those stupid calculators.
Fidelity’s projections are pretty conservative. They give you three projections (average, below average, and significantly below average). You might be looking at the third one.
You have 32 years until retirement. Starting with $125k and contributing $30k per year with avg. 7% return gets you $4,627,411.60 at retirement. At a 4.7% withdrawal rate that gives you about $217k in yearly income for 30 years. So it really depends on inflation and how much you will spend if that will last you six years.
How much are you contributing monthly/annually and what is the projected growth rate? $30K growth and 30%+ growth per year is not sustainable
A good goal is one year’s salary by 30. Did you make that?