Our income is a couple times higher. We save 90%+ of the net.

Anonymous wrote:We have a high HHI (~1m) and save a fair amount (~40%) but I am wondering if this is on par with what we should be saving. I know people say on here that the 10x salary saved for retirement is for middle class salaries not 1%, but what is a good measure then? When do you have financial independence?

I only save about 15% of my HHI, but then again, I’m actually good at and like my job. The whole save 40-50% of my income so I can stop working and become a professional sloth just doesn’t resonate with me. Oh well, to each her own.

If your expenses are 240k/yr, back of the napkin math is about $6million in investments to support those expenses during a normal retirement.

Sounds like you’re at/close to that depending on how much of your NW is house/529s. Once you do drill down, you’ll have clearer decisions on savings and what it might be for (leaving an estate? Second home?) beyond just “retirement at the same expense level.”

OP here… thank you. All super helpful and that’s the biggest question, what we actually spend. Need to drill down on it. At one point we figured out our fixed monthly expenses are around $10k/mo but we likely spend more like $20k. And now we can add a private school tuition in additionally.

We have about $7m net worth including house and 529s.

And yes in theory am totally ready to retire from this job, not concerned about finding other things to occupy my time, husband less ready, which is fine with me!!

You are doing great, OP! We have a similar HH and only save 20%, or $200k/year. Our magic number for financial independence is $10m (+ fully funded 529s and a paid off mortgage).

I would say you are plenty aggressive saving 400K on 1M HHI. For us, we have a 800K HHI and save around 300K. We are in an MCOL though with not much job security.

What is your networth and what is your target networth for retirement. Just back calculate it and see if you are good to hit the desired networth at a specific timeframe. and then spend the rest. Travel, entertainment, hobbies .. anything!

Anonymous wrote:Thanks for the responses, this is really helpful. Most of the savings is deferred comp and 401ks and matches, so pre-tax… I’d say the savings is def 400k+. This is relatively recent in the past 2-3 years as our income went up significantly.

We don’t live extravagantly but we also don’t really budget- head in the sand/flailing about seems to be our M.O and I’d like to become more organized.

We don’t want to retire for 3-4 more years (currently 52) until our kids are all off to college but I’d like the option to be there earlier if possible/necessary.

So you are living off of ~$200K. If so, you are likely well on track as you are saving $400K+/year. However, for retirement you need to consider healthcare cost for the family (until kids are in their own jobs post college)---that could run you $25-30K/year to self insure and have the deductibles that go with those plans (vs a really good plan many have trhu work).

So first, you need to determine what will your costs be during retirement. Is the house paid off? Do you plan to downsize and if so, what would a place you like cost? Even if no mortgage, there are HOA/taxes/maintenance to consider. Then what do you want to DO during retirement? IF you want to travel/golf/etc you need to estimate the annual costs and ensure you are set up to do that.
Do you have a plan for LTC?

You likely can retire at 57/58 with those savings, but only you know what you actually need each month to live (and actually live and do what you want). Also, are you ready to retire under 65? Will one or both of you go crazy not having something to do? I know my spouse would, so you need a plan to scale back not just completely stop working that young.

(OP just above)

Thanks for the responses, this is really helpful. Most of the savings is deferred comp and 401ks and matches, so pre-tax… I’d say the savings is def 400k+. This is relatively recent in the past 2-3 years as our income went up significantly.

We don’t live extravagantly but we also don’t really budget- head in the sand/flailing about seems to be our M.O and I’d like to become more organized.

We don’t want to retire for 3-4 more years (currently 52) until our kids are all off to college but I’d like the option to be there earlier if possible/necessary.

OP do you save 40% of gross or net?

You're prob netting 550-600k after taxes- do you save 400k or 220k-240k?

I have the lowest income on here so far at 150k as a single. Save 40% of pretax income plus whatever goes towards the equity from the mortgage.

We have a much lower HHI (315k) but we save and invest around 40%. Our expenses are probably 115k with two kids, but our goal is 4-5million with paid off income-generating rental property and ideally paid off primary home.

I think you have financial independence when you have enough saved that when you draw it down by 4% a year you maintain the lifestyle you desire. So if your annual expenses are $500,000 then $12,500,000 is a good target. I don’t know how old you are but if you are saving 40% a year and are investing wisely you should do fine. We always were aggressive savers, though I don’t know the percent, and we never really had a retirement target. My husband enjoyed working but when work weariness set in at 60 he retired at which point we probably had 2-3 times what we needed to maintain our lifestyle. Our spending in retirement is higher than our spending when we were working.

Financial independence to me was when we had our Expenses x 30. So we went on 200,000 x 30 = 6,000,000 + house

We have a high HHI (~1m) and save a fair amount (~40%) but I am wondering if this is on par with what we should be saving. I know people say on here that the 10x salary saved for retirement is for middle class salaries not 1%, but what is a good measure then? When do you have financial independence?