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Comment by russellbeattie | Hacker News Reader

My Vanguard 401k home page has this helpful notice in the dead center of the page:

"We think you need $7,840 more per month."

Sure... That makes two of us. I guess it's extrapolating my current salary out and how much I'll need to save to live with the same income after I retire. That's not going to happen.

Here's a helpful article to see how far behind you are in your retirement: https://smartasset.com/retirement/average-401k-balance-by-ag...

I'm 46, so I should have about 3x my annual salary in savings (I don't) and be putting in 8% of my salary into a 401k.

I'm going to go back to not thinking about this now like I usually do, as there's little I can do about it.

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According to the article you linked, based on your age (I'm in the same cohort), the average 401k is worth $91,000. Are you not contributing at all to your 401k? Did you get a late start, or have some hardship that required you to break into the 401k (divorce in my case)?

I've never heard the 3x annual salary in savings, but that also seems super extreme. Assume a salary of $100K per year... No one I know has ~ $300K in their savings. Maybe they have equity in their house, or other equity assets that get them to that sort of number on paper, but I've never heard of someone in our age group (40-50) just having $300K liquid in a bank account.

The 3x the article states means total retirement savings. 401k included. I really hope you know more than a few people with 300k in 401k if they earn 100k/year.

Ah, I was confused by the parent post, I thought we were discussing 401k and "savings" as separate things.

I'm not sure what others have saved in theirs, but in my case, it was more like $200,000 in my 401k when I got divorced at age 40. I didn't always earn the same income as I do now, and also had times where I have needed to decrease my contributions, etc.

Yes, I was talking about total savings. I honestly think that if you know 'more than a few people' with 300k in their 401k then you are living in a upper class bubble, or maybe you are 60 years old...

(Or I'm in total denial. That's a real possibility as well).

Yep, I had some financial missteps, including divorce, a year with an income, etc. That said, I do have the "average" 401k by now, but Vanguard is still telling me I need to save a lot more...

You can either see this as "I can't afford to retire" or as "I've let my spending get out of control, and need to course-correct".

If you ever hope to retire, you must reign in your lifestyle creep versus your real post-savings available income. If you're not saving enough, you are living above your means. This is fixable, but it will hurt.

That said, most retirement calculators overestimate your retirement expenses. Estimate what your expenses will be and plan for that. (And treat interest as inflation-adjusted so you don't end up down that rabbit-hole)

There's no way that number is correct. You're only allowed to save $18,500 in your 401(k) for 2018. You'd hit that number in less than 3 months.

I'm guessing that you must be closer to retirement age right now and probably haven't saved enough or had investments with low returns (no personal judgement here, shit happens). Thus the system is predicting how much "catching up" you need to do and not taking various parameters such as your age and the laws in to account.

Note the IRS limit for 401k elective pre-tax contributions is $18,500 but the overall contribution limit, including After-Tax, is $55,000.

I wonder if it is saying that he should be maxing it out each year, and maybe he hasn't contributed this year, meaning he would need to contribute that much in the next two to three months in order to meet the goal for 2018? I dunno. Like you said, that seems like it can't be right.

If you'd like someone to look at your budget to see if there's some fat you can cut, head on over to forum.mrmoneymustache.com and submit something to the case study forum. People are often surprised by how much they can save without significantly impacting their well-being.

(BTW that calculator is awful because it assumes you need to spend a specified fraction of your income during retirement. That's not how this works at all! By that standard, almost anyone is going to be behind the curve.)

Investment companies make money off of your investments, so naturally they have every incentive to convince you to invest as much as possible.

That doesn’t discount the reality that most people don’t invest nearly enough, but still the “recommended” contributions they give are definitely over-estimated in many cases.

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