Don’t Have Double Your Salary Saved by 35? What To Do if You Live in the Real World

If you really want an idea to get traction these days, a meme is the way to do it.

Take, for example, the recent “by age 35” retirement savings meme which has caused multitudes to drop their avocado toast in their lap.

Where the meme began

The meme’s roots can be traced to a Fidelity Investments report, originally published in June 2017, and cited by a more recent MarketWatch article. The original Fidelity report lays out a retirement savings plan that says by the age 67, you should have 10-times your salary saved up as an end-goal.

If you’re 35 and have an annual salary of $40,000, you should have $80,000 saved up for retirement.

By age 30, you should have “1x of your salary” saved up, and, by 35, twice your salary. In other words, if you’re 35 and have an annual salary of $40,000, you should have $80,000 saved up for retirement.

The idea that someone would have twice their salary saved up by the age 35 is laughable to many, which turned the whole concept into a joke.

Meanwhile, in the real world

For millions of people, the idea of bank balance in the five-figures is a major stretch. While it would be great if everyone was sitting on an incubating nest egg, America’s financial reality is a bit more sobering:

• The average salary for someone between 25 and 34 is around $40,000, and for individuals between 35 and 44, just over $50,000, according to Census Bureau data.
• 40% of Americans have less than $1,000 in savings.
• 28% of Americans have nothing saved at all.
• 45% of working-age American households have no retirement savings.
• The average American household has non-mortgage debt totaling nearly $25,000.
• 9 million households are unbanked, or don’t even have a bank account.

Playing catch-up at 35 (or beyond)? Here’s your to-do list

If you’re taking stock of your finances and finding that you’re behind, don’t panic. It’s never too late to start getting your ducks in a row, and here’s where to start:

Start budgeting. A budget helps you figure out if you have enough money to cover your bills, and how much you have left over to save or invest for the future. See where your money is going and how much you can save. Read more about building a building a budget here.

Build an emergency fund. At Stash, we recommended socking away six months of savings that you can grab in case of the unexpected (think job loss, emergency move, sudden medical bill). Smart-Save makes savings automatic and it never “saves” more than you can afford.

Lower your student loan payments. Looking into refinancing your student loan payments? You could see a reduction in your interest rate – lowering your monthly payments. That savings can go toward planning your future.

With LendKey*, you can see if you qualify for better rates in just a few minutes. It’s free and checking your rates won’t impact your credit score.

Take aim at your high-interest debt. Whether you’re trying to pull yourself out of debt or merely trying to avoid it, limiting your credit card spending may be an important part of your budgeting strategies. Check out these tips on lowering your high-interest debt.

Start saving for retirement. Just because most Americans are falling behind in their retirement savings, doesn’t mean you can’t get ahead of the pack. You don’t need a lump sum of money to open an IRA.