How Much Money Should I Have Saved by Now? (Fidelity, T. Rowe Price & Chase Respond)

About this video

• Video Title: How Much Money Should I Have Saved by Now? (Fidelity, T. Rowe Price & Chase Respond)
• Channel: Erin Talks Money
• Speakers: Erin (host)
• Duration: 00:22:07

Overview

This video reviews and compares retirement savings benchmarks from three major financial institutions: Fidelity, T. Rowe Price, and J.P. Morgan Chase. The host explains each company's methodology, assumptions, and the resulting savings targets for different ages and income levels, highlighting the differences and similarities between them. The video aims to help viewers understand these guidelines and assess their own retirement savings progress.

Key takeaways

• Fidelity's 1x-10x Rule: This guideline suggests saving multiples of your current annual salary by specific ages, starting with 1x by age 30 and reaching 10x by retirement age (67). It assumes a 15% savings rate, diversified investments, and that Social Security will cover about 45% of pre-retirement income.
• T. Rowe Price's Range-Based Approach: This method provides a range of savings multiples (e.g., 1.5x-2.5x salary by age 40) rather than a single target. It assumes a 15% savings rate, a 7% annual investment return, and retirement at age 65, with a 4% withdrawal rate. This approach accounts for varying income levels and retirement spending needs.
• J.P. Morgan Chase's Income Checkpoints: This strategy focuses on specific dollar amounts based on income levels, with assumed savings rates of 5% for incomes under $90,000 and 10% for incomes over $100,000. This method is grounded in real-life spending data and aims for accessibility with clear financial checkpoints.
• Considerations for Dual-Income Households: The video discusses how dual-income households might have different savings needs and retirement income scenarios due to two Social Security benefits, potentially reducing the reliance on personal investments.
• No Single "Right" Answer: The video emphasizes that these benchmarks are tools and guides, not strict rules. Viewers are encouraged to mix and match approaches or use them as a starting point to create a personalized savings plan.