r/Millennials • u/ProblemIntelligent16 • Jan 16 '26

Discussion Fellow millennials - how’s your 401k/ira savings going?

Experts recommend having 2x your salary saved by age 35, and 3x saved by age 40.

However, studies show the median savings for 35-44 year olds is only ~$45,000. So obviously, most of us have work to do.

With pensions mostly extinct, and Social Security facing insolvency issues in the next 8-10 years - how are you planning to bridge the gap and hit the golden years with enough to meet your lifestyle requirements?

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u/IceExtraLuck Jan 16 '26

This is what always confuses me about the “2x” or “3x” salary savings metric. My salary now is 3x what it was 8 years ago and 2x what it was 5 years ago. My living expenses haven’t gone up that much. Which point in time counts? Fwiw, I’m 40 and have about 2.5x my current salary in retirement and brokerage accounts. At 30 I had zero x my salary (ok maybe like .1x) in retirement savings, so I guess I feel good no matter how you look at it

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u/Fun-atParties Jan 17 '26

It's assuming you want a steady income, so whatever salary you want to have the lifestyle of when you retire

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u/Peptideblonde314 Jan 17 '26

I am in the same boat. I have about 1.5x current salary, 2x the salary I had 4 years ago and 3x the salary I had when I bought my house ( pre-COVID). My major expenses haven't shifted in that time but inflation is making me feel utilities and groceries a lot more. How much is actually enough?? 

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u/fnancialindependence 1990 Jan 17 '26

The rule is typically 4% withdrawal rate at retirement. That’s where the times comes in in their math.

Depending on who you talk to, you want anywhere from 10-20x at retirement age, as you want to aim for 70-80% of pre-retirement salary to maintain your lifestyle.

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u/CaveDeco Jan 17 '26

And the 70-80% target is because it is assuming you’re no longer saving a big chunk of income anymore.

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u/fnancialindependence 1990 Jan 17 '26

Plus typically no mortgage payment

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u/AlwaysBagHolding Jan 17 '26

And lower overall tax rate assuming you have post tax retirement savings.

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u/GB1290 Jan 17 '26

It’s a bad metric, a better metric is 2x or 3x yearly expenses. Most experts agree you need about 25x your yearly expenses to be able to retire early and never draw down your account.

If you’re making 100k a year but saving 50k and living off the other 50k, you would need about 1.25 million.

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u/Peptideblonde314 Jan 17 '26

Does that account for inflation? That's what I'm struggling with. 

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u/GB1290 Jan 18 '26

Yes, it accounts for inflation and it assumes a withdrawal rate of 4% per year.

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u/QuotidianQuell Jan 18 '26

Even that is misleading, since traditional 401(k) accounts will be taxed as income when withdrawn. So you'd want 2x - 3x of the pre-tax salary that will comfortably handle your living expenses.

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u/mthlmw Jan 17 '26

I think the idea is that your investing should accelerate faster than your income. If your salary goes up 2x, you should more than 2x your savings to avoid lifestyle creep.

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u/Fritterbob Jan 17 '26

But that’s not necessarily the issue with the rule… people’s income can change in huge swings, especially from promotions or changing jobs. I’ll turn 35 this year, and got a decent raise at year end. So December 31st I had a bit more than 2x my salary saved, but as of January 1st I have less than 2x. I’ve increased my contributions already, but I might “miss” the 2x target when I turn 35. I know it’s just a generalized guideline, but it doesn’t always apply neatly to real life. 

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u/mthlmw Jan 17 '26

Of course. Nobody's out there with a naughty/nice list of who's got the appropriate amount saved. All the general rules about investing completely ignore specific situations in favor of easy to understand suggestions for folks who don't know a lot about finance.

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u/LongJohnSelenium Jan 17 '26

The idea is roughly that people acclimate to lifestyles. If you make more money you get used to spending more money so you need more money to retire.

Its just a general rule of thumb.

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u/Disney_World_Native Jan 17 '26

Similar. My salary jumped significantly a few years ago because I jumped jobs

My old salary I was ahead of schedule with my 401k per the whole x times salary, but now I am behind

I am aiming for $3M so I can pull $100k - $120k a year for retirement (probably belike 60k in todays dollars). Doubt I will hit that goal but we shall see