Episode three ninety three, how much to have saved for retirement at thirty, forty and fifty.
Welcome to the Frugal Friends podcast, where you'll learn to save money, embrace simplicity, and de liver your life. Here your hosts Jen and Jill.
Welcome to the Frugal Friends podcast. My name is Jen, my name is Jill, and today we are talking about how much you should theoretically have saved at retirement for retirement at certain ages. We are not going to throw random numbers like you should have two extra salary, three extra salary. I don't care what your salary is. I care what you care about and what you want to do with your life.
Okay, yeow, come at the game.
You got to You got to make them understand. It's not an arbitrary number. It's not an arbitrary calculation. Like there are things that you can think about. You don't have to know exactly what you want to do in retirement, but if you start thinking about who you are now and start thinking about what those things cost to be who you are, you can start to think about it.
I still like to have a bit of a metric to kind of know, because this is something people don't totally talk about because it is a little fluid, but still getting some version of a baseline, and I do think that we will help you to define what that is in this episode. I'm super excited about it. I'm excited about these articles. And we also pulled you all in the friend letter before we get into those articles.
So for those of you getting the friend letter, you know, at the bottom of it, we always are asking some version of a lightning round question. You can answer and some and even respond to us give us more information. It's a really fun way of engaging. Now we're incorporating it into our episodes. So we asked you all how much do you have saved for retirement? And the majority of you are right in this middle portion of the answers. Somewhere between eleven thousand to two hundred and fifty thousand
is where the majority of you fall. That's a big, big span.
Yeah, most money and numbers.
Most people are in the eleven you know, eleven thousand to fifty thousand, because if you're single, that's going to make more sense if your dual income. Our second highest answer was one hundred, like one hundred and one to two hundred and fifty thousand, so that makes more sense if you're a dual income household, so that it does make a lot of sense. And but we just want
to normalize. Also, whatever you have saved is good, and the only bad thing is if you have if you want to have a Rolls Royce in retirement and maybe you only have ten thousand saved to forty, that might be bad. But the only bad thing about it is that you may want to shift away from a Rolls Royce and start enjoying toyotas, like that's that's the thing.
Whatever you have saved is good. Like we got some responses feeling like like I feel like I'm so far behind, I'm getting closer to pay off my debt and maybe investing is not number one on your list right now, that's okay as long as you're doing something to improve your finances. Don't feel like you're behind, don't feel like you don't know enough to catch up or to be where you want to be. All this we want to normalize and encourage you to do what you can with what you have.
Yeah, this episode is for you. If you're finding yourself feeling as though I don't know, am I behind, but based on what So let's define it for our different life stages.
But first, if you need more of this outside of the front, outside of the Frugal Friends podcast, get the friend letter Frugal friendspodcast dot com. We are talking about investing stuff. We mostly talk about freebies, savings tips, smart buying practices, so like not deals, but how you can get really good quality stuff without paying the overage of you know, hypie brands and social media viral nonsense.
Which those things are going to help you save both now and in the future. And those are practices and habit formation that will carry with you into retirements. Yeah, there's benefit across the board and friend.
Letter absolutely Frugal Friends podcast dot com. And if you are looking for more information about saving for retirement, we just did a couple really good episodes about your roth Ira. We're doing this roth Ira challenge and this is kind of the wrap up of that roth Ira challenge. We want you to feel confident in saving so that you can take advantage of this relatively low maximum threshold investment like tax advantage opportunity, so you do not get twenty
twenty three backs. So few things in life have a grace period. Your IRA is one of them, and so we want you to take advantage of it in the capacity that you have. So we have those and then we also have episodes like two ninety one what to Do if you have nothing saved for retirement and episode two seventy five Understanding your Workplace Retirement Accounts with Delian Barrows.
So this first article, I'm so stoked on it. I found it fascinating. It's from retire Guide and it's called average Retirement Spending in twenty twenty three Typical Expenses and Budgeting Tips. The whole point with this article was to help us understand average spending habits of current retirees so that we can inform our own retirement savings plan avoid accumulating debt. I think for many of us, retirement can
feel so far off. We don't really know who we're going to be, what we're going to need, what the economy is going to look like, and so that can be hard to make a plan to save because what will I even need, what will inflation look like by then? How much money is going to be a worthwhile amount? And while a lot of that is still shielded from our understanding, it is helpful to learn from those who have gone before us, those who are there right now.
And it may not be an exact description of what it's going to look like for us, but it is again one of those launching points of well, what are they doing? It's probably not going to look too much different for me, and or I can make my own decisions to make it look a little bit different for me. But not that the exact amounts of money are going to work for us. But to be able to talk in some of these percentages and where is the majority of money going, how is time being spent? Is really helpful.
So they gave this first little statistic that, according to the Bureau of Labor Statistics, on average, people ages sixty five and older spent about fifty two thousand dollars in twenty twenty one, which is fourteen thousand dollars less than the average spending of the general population. So sick about sixty seven thousand dollars is what the average population spent.
I found that so interesting that in retirement people are spending a little bit less than kind of what the general population is doing, which I think we often assume, like, oh, yeah, well, I won't need as much. But I always get nervous about that, like you might need more though than what you needed throughout the majority of your life. But it does look like even the spending kind of slows down, hits the slower pace.
Well, I mean, at this point, all of your kids are out of the house and out of college, so they should be financially stable and on their own. You're not going as many places, like, you're not taking as many family vacations, and when you do take vacations, they are a fraction of the price because you're usually not bringing everyone every single time. So yeah, like I can really see, like so obviously it's you know, twenty twenty
one spending is very different from twenty twenty four. But the article suggests that you're spending in retirement will be about eighty percent of your annual pre retirement It says income, but I would say, like, what is eighty percent of your pre retirement spending? Probably, so you can take if you're looking at your budget, looking at your ninety day transaction inventory, a very good baseline is to average out your monthly spend and then go eighty percent of that.
So that's going to be like a really you know that's that's going to be a bare minimum for you to start with.
But then they give this infographic of the typical spending in retirement and at that kind of fifty five thousand dollars mark was the average retirement income and average retirement expenses was fifty two thousand dollars. So this is really painting a paycheck to paycheck kind of picture that only leaves three thousand dollars annually leftover on average. That's not a lot of cushion month to month with this, so what's coming in is.
Kind of going out.
And then they break it down into well, where is the money going? And this was most intriguing to me that even in retirement, for on average these retirees, thirty percent of their retirement expenses was housing costs. And idiot thought was, I thought in retirement you'd have your house paid off And they said that, yeah, right, sometimes they don't.
But they were like, even with those people who had their houses paid off, there still they still broke it down into all the different types of expenses, so from housing supplies, household operations, that did seem like they added in other types of lodging. So I don't know if that means they're they're adding in like lodging on vacation or different types of things.
Yeah, not one dred percent, but.
Your taxes are increasing, You're still paying all of your utilities on your housing, so it still represented thirty percent of their income.
Yeah, it is interesting.
I don't know if I agree one hundred percent with all of the things they included in quote unquote housing costs. But for a lot of people, the house that you buy is not the house you stay in for thirty years. So a lot of people will buy two to three houses in their lifetime and you live in each one for five years. So it's very likely that when you're sixty five you're still going to have a house payment if you bought one when you were you know, forty
or forty five, hopefully not too long into retirement. But and then yeah, you definitely have your taxes, your insurance, all of that stuff, so you're still going to have home expenses, but they tend to drop off. And yeah, whether they're thirty percent or not. Again, eighty percent of your current spending is just a bare minimum. And if you want to shoot for one hundred percent equivalent, if you're in your thirties.
I know.
We I mean, we just got I don't remember if it was an email or what from somebody who said I'm thirty five and I feel like I'm so far behind. And I was like, girl, you are a year older than me. Like it's not I mean, yeah, I guess we've been doing this stuff for a while, but it's you're in your thirties.
You are not far behind.
You are at a good place to start, right The people in their forties and fifties are hearing that right now and be like, no, girl, you start now. You're in the perfect place.
So yeah, if you're in your sixties and you want to retire in the next few years, it is pedal to the metal time. But I just I found this interesting something to keep an eye on. I think we can assume once I own my home, that's the reason for home ownership, so that I can rest easy and retirement and retirees are currently telling us housing is still
a major expense for us, so factor that in. Yeah, we can be bummed about it, cry about it in the corner for a second, but then also realign your expectations that housing will still cost you money.
And I don't rest of your life. And if you have a mortgage in retirement, I don't think that's a bad thing. If you spent your working years prioritizing investing that has a higher rate of return typically than what your mortgage is costing you, you still made a good financial decision. You're still going to come out on top if you were investing instead of prioritizing your mortgage payoffs. So the next couple are healthcare, and this is one that I honestly think there should be a little bit
more so. They say it's about eight percent of retirement expenses, and I don't know at what part of retirement, but they said overall or on average, retirees reported that five percent of their monthly spending went toward out of pocket medical costs and eight percent went toward medical and health insurance. So I guess it is more than eight, you know,
eight plus five. So twenty percent of adults sixty five and older reported out of pocket medical expenses of more than two thousand dollars in twenty twenty one, which I
think is super conservative. We have heard from people like financial advisors that say that is the medical costs are the main expense in retirement, and so that's I think one of the reasons to if you can shoot for one hundred percent of your spending, and that's why we prioritize making sure our spending is in control and we're only spending on the things that we love and not mindlessly consuming into impulse spending. Because once you know that
you're spending, you feel good about your spending. That I mean, one hundred percent of that is far less than one hundred percent of spending on like all kinds of impulse things. Right, So that's why we say, get control of it now so that you feel better overall about saving for retirement.
Yeah.
The next one on here is transportation expenses being about twelve percent, which that's a little shocking to me too that it would be more than what you'd spend on medical, But they did give this stat In twenty twenty, there were about thirty one million licensed drivers ages seventy and older.
So people are still driving in retirement. So we still have the cost of car ownership or if you've got a car payment and maintenance and all of these things, and then especially if you don't have your license anymore, you maybe don't have a vehicle. You might need to then be paying people to take you places if public transportation is not an option, So still need to be factoring in how are we getting around?
Yes, and my favorite cost of food twenty five percent. So the thing that changes really between your working years and your your retirement is that slightly less on transportation and we bump food up to number two. Now, if food is already your number two, like, that's you're already living the dream you are retired. Congratulations you have achieved. But for most people with a car payment, who are
you know transporting kids have a commute? Stuff like that, transportation is usually number two and food will go to up to twenty five percent of your spending in retirement. They said food was the most common fastest growing expense reported by seniors in twenty twenty one. Sorry to seniors in twenty twenty four. Nobody, nobody could anticipate. I mean everybody could anticipate, but nobody could. Seventy three percent of the average food budget for people sixty five and older
was spent on food home. Where's about thirty percent was spent on eating out. So that's one hundred and three percent of your eating budget.
Yeah, so.
Food and housing is always going to cost you, always in forever. I mean, what the Big three that we always talk about, they're.
Not going away.
They are always going to be there.
The last thing I want to mention about this article is they talk about just debt, the crushing debt that retirees were reporting. So ninety six percent of retirees reported having debt in twenty twenty two. Ninety six percent. That's nearly all of them now much'all. Forty three percent of those ninety six described the debt as easily manageable, whereas
eleven percent reported it as crushing, unmanageable. But this was a huge takeaway for me as far as where we have choice agency in what retirement looks like, that we can again learn from those who have gone before. And if this is something we don't want to see in retirement, then we practice that now. Not having debt. Getting rid of debt now will only benefit us when we head into retirement. We don't have to be a generation that
has ninety six percent. Ninety six percent of us are in debt in our later years.
Yeah, and if we are, there's nothing like to be shamed about in that. But we want to do what we can to lighten that load on ourselves. We want to be able to enjoy those years and we don't want to leave our loved ones with, you know, with debts that don't go away when we die too. So there's a lot of things to think about. And if your plan at the end of your life is to just rack up a crap ton of credit card debt,
like leave it for the last year of your life. Okay, let's make sure we're prepared for for all the.
Times up to there.
You don't know exactly how long you'll live.
Right, so, like leave that as your last, last last resort and let's just try to plan as well as we can.
This next article comes from Trust and Will, so it's describing a guide to retirement savings by age twenties, thirties, forties, fifties, and sixties. So, like Jen said, we're not gonna apparently tell you.
We will say the numbers. I will admit that they are helpful. They are not helpful when people are you know, shoving it down your throat, being like, if you don't have two times your salary saved, you better get on it. Do some different with your life. It's a mindset problem that I don't like that, but.
I've just been here for too long.
Yeah, So they start off by talking about the rule of twenty five. So this isn't necessarily something that we think you have to take on as this is the exact prescription for what I need to do.
But I do like this better than the two extra salary, three extra salary. Yeah, I say go with the rule of twenty five before you go with any other number.
And I think it's a helpful Again, just baseline, what should I even be aiming for? What do I even need to be trying to do here? So they're describing that to calculate your retirement savings target, first you need to create an estimate of your monthly expenses. So let's say they give these numbers. Let's say you can comfortably live off of three thousand dollars a month. Multiply that by twelve to get your annual withdrawal amount. This would be what do you think you can live off of
per year? In this case, it would be thirty six thousand dollars. I don't think these numbers are anywhere close to what we need to be considering, but for the sake of giving an example, Let's say it's thirty six thousand dollars a year that you want to be pulling out annually in retirement. Then you want to take your withdrawal amount and multiply it by twenty five. I assume they're thinking you're going to be in retirement for twenty five years.
No, I mean, so this will just make sure that you have that you are If you withdraw at four percent, then you're never touching the nest egg. You're only ever withdrawing the growth. It ensures that there's at least at a at about a seven to ten percent growth rate, that the all thirty six thousand every year that you withdraw is always going to be annual growth. It's never going to be giving that nast egg RK.
So that would be a savings target of nine hundred thousand dollars with this example. And I think that they did this example because they wanted to highlight that not everybody needs to save one million dollars. That has been kind of this, especially within the fire movement financial independence retire early. It's always been save one hundred million. So then you can withdraw that one.
Hundred million, sorry one million.
You can withdraw that four percent, and really, this is not a realistic number. It's not thirty six thousand dollars a years is not a realistic number. Now, I can't imagine it's going to be a realistic number. If you are planning to retire in a few decades from now, it's.
Going to need to be more. I do think we need to adjust for inflation.
Yeah, we So some of this takes the seven percent growth rate does take into account inflation, because the stock market has in the past traditionally grown ten percent like over its entirety. But we use a seven percent calculation to account for a three percent inflation. But I mean, if you've been alive for the past couple of years, you know inflation has been far faster than that. But we had a really good decade where it was very slow, like light inflation.
So you're saying there could be years where you take more than four percent and you'd still not be touching the nest egg, correct.
Right, But you always have you know, those bear markets. You will have a bear market at some time or a correction at some time in your retirement, and you want to be able to have enough to still take out the thirty six thousand without touching the next nest egg. And that's why on those good years you don't take out more so that it compensates for the slower years.
And I do want to say, just vernacular, we are using the word savings and investing kind of interchangeably, which is unfortunate. We're not just talking put nine hundred thousand dollars under your mattress. We're talking invest for retirement and have this amount in your investment accounts by the time you reach retirement.
So another calculation with the rule of twenty five would be, say, maybe five thousand per month is what you spend, and you want to start with that conservative like I'm going to spend eighty percent of that in retirement, So eighty percent of five thousand is four thousand. We multiply that by twelve, and we're getting forty eight thousand in a year.
That's I think that's far better to think. So, and then you multiply that by twenty five and you get one point two million, So I think that's a far better goal. I think one point two million is a reasonable goal. May not sound reasonable to you right now, but we'll talk a little bit about how to get to that goal.
Well, and this is probably talking per person though too. So if you are you know, in a if you're married and you've got annual household income that's higher than yeah, then yes, take that into consideration.
So let's get into ages.
Yes, so let's start with twenties. We don't have a ton of people in their twenties who listen to the show, but shout out to you if you're starting young, and you can still relate to us because we're cool. So on average, Americans in their twenties have saved around ten five hundred toward retirement.
I was shocked at that. I did not think that'd be the case. I think we have four oh one ks to thank for that.
Yes, absolutely, the mandatory four o one K or the opt out four oh one K not mandatory, but it automatically enrolls you and you have to opt out. Is fantastic. If you are someone who that happened to and maybe you left that job, highly highly require you to roll over your old four oh one K into an IRA that you control, and you can usually actually use capitalized to do that. For Free Frugal Friends podcast dot com slash capitalize if you can type all of that in.
But so, yeah, in your twenties is just getting over the barrier to start saving. Anything that you can save in your twenties will grow. You have like over four decades to grow stuff. So, but first you want to shore up your emergency fund. You want to get over that barrier to entry. So start in your company's for owin k plan, open a roth IRA. These are going to be like your to do Listen. Fidelity recommends contributing about fifteen percent of your pre tax income into retirement accounts.
Yeah, if you can, I mean when you're in your twenties, I I'm going to move into the thirties.
Well okay, let's let's talk about like how much you would need to contribute.
Okay, yeah, so yeah, because that this is what can frustrate me about these types of articles is they can give this sense as if money is ever flowing, like, well, just max out your wrath IRA and just take this percentage of your pre tax income. Well, we don't get to take home pre tax income, so that's like more than fifteen percent of our actual income because of what we actually get to take home. And for many of us, that's just it's not reasonable. Many of us do not
have fifteen to thirty percent additional beyond our expenses. Yeah, to just like throw at this thing. So I just want to I get that all these numbers are on paper and telling us the right thing to do. But please know you're not alone if you're like, this just isn't possible for me. So here's a here's a baseline, something that you could be considering, but also know something is better than nothing.
Yeah, So if you want to get to that one point two million, then and you have a forty year time price, and so this would essentially be starting at twenty five years old and investing monthly. Again, we're using a seven percent return rate compounding quarterly. That's going to be about four hundred and sixty two dollars a month.
Your total contributions over forty years will be just over two hundred and twenty so like two hundred and twenty two thousand dollars around there, And the total interest that you will have but you didn't put in is over nine hundred and seventy eight thousand.
Yeah, so I did not have that money in my twenties. One did not. That's that's a relatively expensive car payment.
Yeah, yeah, no, it's definitely. So if we wanted to move that number to just a million, then that takes us down to saving three hundred and eighty five dollars a month. Again, pretty steep, especially if you have student loans.
Yeah.
So not everyone's going to be able to start this in their twenties.
Yeah, well, but start though, Like, I think that's the piece that kind of kept me in some ways from it, although there were months I didn't even.
Have twenty bucks to throw at it.
But if you're doing better than I did in my twenties and you've got twenty bucks, then another month you got one hundred, another month you got two hundred. Oh we're back down to thirty. Like, just put put it in, let it start growing. Don't let this kind of hack you out at the legs to begin with, because you still will be better off beginning in your twenties with whatever you.
Got to get.
Yeah. I think two hundred is a really good number if you can swing it in your twenties, because that money will just like compound and compound and compound. It's going to be difficult, there's going to be friction, you're gonna have to be very intentional, but two hundred dollars per month, it's a do whoople number. Yeah, it's not easy, but it's doable.
Yeah yeah, Okay, So moving on into your thirties, I felt this one in a real way. We're in our thirties and actually whooping back to the person who emailed us, like, I'm thirty five and I feel like I'm so far behind. I get that I feel that way too, and I do appreciate that this article calls it out, because your thirties are a time of they're calling it immense growth.
You might have found some career stability, maybe some raises and role changes at work, but this is the time when you are entering into romantic partnerships, getting married, having kids, buying a home, still likely paying off student loan debt, maybe starting to care for parents. Even at this age,
you might beginning caregiver types of roles. There are so many demands on our money at every stage of life, but particularly here when we're still just kind of getting our foot and so I think this is one of the reasons that it can feel like I'm so far behind because I don't have endless money to hemorrhage towards all of the goals, like buying a home is a very valuable goal. Also you can rent. That is fine too, because as we saw, when you're retired and your own home,
you still spend a ton of money on housing. But if this is something that you do want to be putting a bigger emphasis on, this is a very good time to do it. On average, Americans in their thirties have saved about thirty eight thousand dollars towards retirement. That number is a little bit lower than what we would want to see by the time we enter into our forties.
So they're recommending one of their baseline recommendations is that you've saved the equivalent of your annual salary by your thirties. So this, i would say annual household income, not just your salary, but if you're planning on retiring with the person you're currently living with now, if you're just starting in your thirties, then the percentage of our pretext income that we want to be putting into our retirement investment accounts does ramp up. So in our twenties it was
fifteen percent. Now in our thirties, if we're just starting, we want to increase that to somewhere between eighteen to twenty three percent of our pretext income. So quite a spike, but not nearly as much of a spike in percentage as it would be if we were just starting in our forties, and of course if we're just starting in our fifties, so it still does behoove us, get started, gets started, Get started.
Yeah.
So if we're looking at like, if you did the most in your twenty five and I'm going to start, I'm honestly going to start these decades in the middle, I like like twenty five to thirty five, thirty five
to forty five. It just makes it easier. So if you did the most, so you did your four hundred and sixty three a month in your twenties, then starting at twenty five, by thirty five, you'd have eighty thousand dollars and you only put in fifty five just over fifty five thousand of it, Okay, So that's doing that's doing the most. Though, if you just did two hundred, then you would have thirty about thirty five thousand saved, okay, and so and you would have put in about twenty
four thousand of that. So if we look at that, let's say you started, you know, with the two hundred dollars a month, you've got thirty five thousand dollars saved, and we're going to put this into our calculator. We're still going to use this first calculation to do the
one point two million. So if you're starting thirty five with thirty five thousand dollars saved, then and you want to get to one point two million, it would jump super up to you then need to save seven hundred and fifty nine dollars a month to get to that one point two million, which if you're a dual income household starting at thirty five, it's not impossible.
Yeah, yeah, I mean that's less than a duel income maxing out both of your four or one k's. Yeah, I'm sorry, roth Iris, sorry to confuse you.
Yeah.
So it is a lot higher though, which is why starting your twenties is so great, and if you're not your twenties, you should encourage people in their twenties to start investing. That goes down. If you want to just do one million, then that's just under six hundred bucks a month, So it's total, it's very feasible if maybe you just have thirty five thousand saved and this is after this is the thirty year time horizon, it shortening
it to thirty years. If you have about thirty five thousand dollars saved and you want to get to a million, still really doable. Still, that's three hundred dollars from each of you, and it's it is a friction, but.
Doable, not impossible.
We start when we get to these later, when we have fewer years to compound, fewer decades to compound, like twenty and ten, is when it starts to become harder.
Yeah, so what happens in the forties, Jen, So in.
Your forties you should and I'll just touch on THEE one X your salary, I would say, by honestly, like by.
The end of the decade.
I think that makes sense.
Yeah, you don't have to have it by the time you turn thirty, but before you turn forty. So in your forties, a person often gets to begin experience the rewards of their hard work and diligence when they.
Reach their forties.
I sure hope so.
And this would be I would say forty five, not at forty. The forties decade for our episode is starting at forty five. Say, on average, americans in their forties have about ninety three thousand, four hundred saved toward retirement. And so they say, at age forty you should have three times your annual salary already saved. And that sounds difficult, especially if you're starting in your thirties. It's but your money at compound interests pretty much. It's like a rule
of thumb. Compound interest will double your money every ten years. So if you put ten thousand dollars in the stock market in a total stock market, you know ETF for index fund, in ten years, that money, if you don't touch it, will probably look like twenty thousand, and in ten more years that twenty thousand will look like forty thousand. And so that's why this article is assuming you start in your twenties and then buy your forties. Yes, of
course your money has tripled. So it's you know, it makes sense, but it's harder the later you start.
Okay, so we're getting into our fifties, and this is where the article says it's time to put your retirement preparation on full steam ahead. Most Americans are far behind and meeting their savings targets. It is understandable cost of living, still supporting children through college usually in your fifties, paying for home repairs, increased medical cost definitely in caregiver roles in your fifties, that kind of sandwich generation of you're still kind of there for your kids as well as
your parents. So a lot of pressures happening here. But if you do plan to retire this when we talk about prioritization, this should be at the top of the list. On average, Americans in their fifties have saved about one hundred and sixty thousand dollars towards retirement. Again, we would want to see that number be a little bit higher when you're just less than ten years away from retirement age.
So this is where an aim can be having six times your annual salary saved, and this is where we can really be maxing out catch up contributions whenever possible, putting any additional money that you might have fine.
Well at at fifty five I can't remember, it's fifty five and a half or I'm sorry, I'm not consult your investing experts, but you do get an extra thousand dollars in your IRA extra a certain number in your four h one K, and so you can at fifty five contribute more to these tax advantaged accounts than somebody who's fifty four or younger, and you should take advantage
of that. If you have obviously less than especially less than three times your income, it becomes almost almost impossible to reach a million dollars if you only have one
hundred and sixty thousand dollars saved at fifty five. But I mean if you want to have you know, if you have one hundred and sixty thousand dollars save and you want in your targets maybe six hundred thousand over ten years, If you are investing sixteen hundred dollars a month, which with kids out of the house a lot more disposable income, you're still working, that becomes again difficult friction, but not impossible. In those years, you can still get
to six hundred thousand. So that's you know, one hundred and ninety four thousand you're putting in, but two hundred and forty two hundred and forty five thousand of interest that you did not put in. So again, sixteen hundred dollars is no joke. But there are still ways to make that last ten years really work for you.
Yeah, what about our friends in their sixties. We got some friends in their sixties listening to us.
Yeah, my mom's in her sixties. She's very excited to get to the point where she can get you know, between working and getting social Security for her Ami dad, she's actually going to be getting a raise. Whoa so, I so, And this is in like three months she does this. So she's going to take us out to dinner with her new rais.
Ow to caravas, to caravas.
Yeah, I mean this is I mean, we do have some people in their sixties listening to this. So the article says it's no longer appropriate to sugarcoat things. This should be a time in your life where you can sit back and relax. Unfortunately, most Americans are nowhere near the recommended savings target. I think a lot of our listeners are outside of that majority. But Americans in their sixties typically have one hundred and eighty two thousand saves
towards retirement. And that's nothing to laugh. I mean, there's nothing to like, turn your nose up at like one hundred and eighty two that can get you a long way if you're also coupling that with part time income and you know you're.
Medicaid all that stuff.
Yeah, supplementing your medical expenses absolutely.
Yeah, So definitely what you have is what you have, and so at that point you need to evaluate your non retirement assets. See what you can monetize, see what you can sell. Don't forget to take advantage of those Social Security benefits when you turn sixty two. If you still love your job or enjoy what you're doing, you can delay those benefits and then that will get you more money later on, Like my mom has delayed her
benefits as long as you know possible. So you can also consider investing your Social Security money in non retirement accounts if you feel comfortable doing so. This is the time, though, where we get really conservative with our bond funds, So I don't know that would be something to talk to your financial advisor about. This would be the time to get a financial advisor. I think the five years before you retire is a good time to be working with someone and then be sure to factor in the cost
of medical care. Again, just like fine tuning your retirement income to make sure you are not that you can be as little of a burden to the people you love as possible.
Start now, we recognize there's not any one singular goal for our money. There's so many different things that we can be putting it towards, and the closer and closer we get to retirement, the more and more this needs to be prioritized. But definitely recognize if you're in your twenties and thirties, you have to take all these other things into consideration. Definitely do something, but know that if you can't do all of the things.
It's okay. You will be okay. Yeah, So just.
To reiterate, general recommendations for your thirties, is one x your salary, but by the time you turn fifty, it's three x your salary, and then by the time you turn sixty it's six x. And if you're not there, don't be discouraged because what you're you could earn more than what you'll spend in retirement, and that's hopefully what
we're helping you do here. But again, just starting with that two hundred dollars a month, I think just starting with something and then reevaluating and always be upping it.
And if you're really pinched and you can't meet any of these goals. Then then reevaluating the jobs that we're in and our income streams and our skill sets. So finding these different inroads, but start somewhere. Do you know what also is encouraging? And I don't want a delay.
Yeah, I want it one hundred.
X by the time we turned thirty five.
By the time I turned thirty five.
The bill of.
The week, that's right, it's time for the best minute of your entire week. Maybe a baby was born and his name is Williams. Maybe you've paid off your mortgage, maybe your car died and you're happy to not have to pay that bill anymore. Best bills, Buffalo bills, Bill clion, This is the bill of the week.
Hi, fregal friends. This is the habit my husband and I have implemented that have helped us save on multiple bills, multiple expenses, things like that. So what we do is every week, typically on Saturday mornings, we'll make mimosas and it will spend like fifteen to thirty minutes talking about past expenses of that previous week. So for example, we'll go through what we spent on groceries, how much we have left in the grocery budget. We'll go to the
next category. Oh, this is our miscellaneous shopping budget. This is what we spent, This is how much we have left for this budget, Utilities, things like that, and then it kind of gives us like a good bird's eye view of that past week and a good bird'sye.
View of what we have left for the month.
We also talk about like maybe unexpected expenses thanks coming up that we were like invited to and we have to like bring a dish for so that might be more towards the grocery category. Things like that for example. It's really fun and just having that little pocket of time to be transparent about budget finances spending habits each week has really helped us long term because we have that built in time to talk about it instead of like, I don't know, just like a random Tuesday when we're
kind of like unprepared. We have that time to really connect and remember our goals, and it helps having that weekly reminder so it's always fresh in our brains. And who doesn't love them? A mosas so you can even do this at night after kids go to bed, get like margs or a glass of wine. Things like that, but just having that habit of it being a weekly fifteen to thirty minute pocket of time has helped tremendously. So just wanted to share if you wanted to try.
You know what, Jill, I might budget more if Travis would drink mimosa with me. Maybe that's why I don't like it, because I mean, I've never tried drinking and budgeting.
He would drink the orange juice.
He absolutely wouldn't. I can get tiny I could get tiny champagnes for me.
Yes, yeah, you're inspiring us a weekly meeting over mimosas about money.
It's alliteration and it's beautiful.
I just wish we had time on Monday so it could be a Monday morning mimosa meeting.
Actually we should probably those for us, your friends Monday meeting.
This is not the direction you thought this bill was going, and it's here.
What a good tip because you are implementing a routine and a habit that can potentially follow you throughout life. But it's not a huge time commitment, and you've made it fun. You've broken down some of these barriers to communicating about money. It's all so beautiful with a beautiful bill of the week. If you all listening, have a bill about Mimosa's meetings, mondays.
Money or your name is Bill.
For over podcast dot com slash Bill. Leave us your bill and now it's time for being around.
Me. Oh okay, So how much longer do you have until you hope to retire and what do you need to shift in order to be prepared?
Jill?
Okay, So I did Wow, I know I want to be retired today. Actually, actually I did try this. This is a side note for your vulnerability around Jen. I went to this wedding Mexico a few months ago where I didn't really know many people at the wedding and I did not feel like talking about myself.
I know that you.
Don't like this very much because you're like, do you need to tell them about our podcast? And it's just like not my m o. So I tried on for size, just telling people I was retired. Oh my god, Like when they asked me what do you do and I literally said I was retired, there were zero follow up questions. Attention went off of me onto other things. We were able to talk about all the cool things they were doing.
I love it.
I actually I do hate telling people.
I have a podcast.
This is true, though, it just feels so complicated, and I was tired and I didn't want to talk about it, so I said I was retired.
Nobody would believe me. If I said I was retired, would think, oh, you're stay at home mom.
Cool.
We were in a group of people who, I think all of them were relatively independently wealthy, so no one really bad than I, and that, you know, that was the benefit of being around a ton of wealthy people is it doesn't really matter.
You could kind of just be yourself.
Anyhow, or be not yourself because you're not retired to it, you'd be somebody different me.
Apart from my work though, just me showing up with nothing to prove. So I did write twenty two years in all reality because I thought that, like fifty six might be a decent retirement age.
But I don't think that's a classic retirement.
It's it's not.
So The statistics actually are most people plan to retire at sixty five, and the average retirement age is around sixty two. And that's not by choice, not because people get so wealthy they get surprised and retire early. But a lot of people are forced out of the workplace because of illness, physical disability, caretaking, a relative pushed out just because of you know, their industry is going toward AI. I don't know, but yeah, that's that's a lot of the reason.
Yeah, and I would want to plan more for that. I would hate to be surprised like, oh no, I really needed to hold out for another four years and I can't. I'd rather be prepared for sooner whether yeah, I mean hopefully by choice, but if I am forced sooner, I want to prepare for that.
So fifty six is my goal? No, all right, so I got twenty eight years. If it is sixty two, wow, okay, I don't want to work for that long.
But but what this is telling me is I'm I'm with that thirty five year old woman who emailed us like I got I got to increase this thing.
Why do you hate your job so much?
I don't hate my job, that's not it. I'm just tired, just and it's not this. This is actually what's very life giving to me. It's my like decade and a half working in social work that exhausted me, and I'm still recovering. I think this is helping me to recover because I do still have to work even though I'm burn out.
But she's a woman and the people.
Yeah, it will, it will shift.
I know that things will be restored to me and my inner being. But at this moment, working for another twenty eight years does sound exhausting. But I'm encouraged to know, like we can find life giving work.
We can do.
Work that's entirely different, that exercises a different part of who we are. That can like, we can work even when burnt out. If it's in a different way area, then maybe the field that burnt us out and we may return to that field in the future.
Yeah.
Yeah, that's great perspective.
Thanks. Yeah, okay, what about you?
So, as I look at my retirement planner on Empower, it's saying that I can comfortably retire at sixty and that is my goal. My actual true goal is to retire when my first child has my first grandchild.
That is when I want to retire.
Yeah.
Nice, So I would like to be prepared by for that.
Bye.
So I had Kai at thirty, So if he has a child at thirty, then that would put.
Me at sixty.
Nice.
But he could have a child earlier.
You have always predicted that.
Yeah, so I though it may be Atlas at this point he is a renegade, so it could be fifty five. I don't know, but I would like to prepare somewhere between fifty five and sixty. It really will be that grand baby that determines it.
Okay, and is there anything you need to shift to be prepared?
No, ePower says, I am in good shape. They forecast I have a ninety four percent chance that my portfolio will support my goals.
Yeah, so you just stay the course. The amount of money you're currently investing can stay the same.
It changes, and well, it has decreased over the years. The amount I have invested has decreased. We put We went really hard in our twenties, Like we went super hard before we had kids. There was a year, one year we maxed out iras, two iras and one four A one k, right, so we went super hard so that we could ease.
Off when we had kids.
Well done, So I mean if you yeah, I mean it's great. It has really worked out for us, and we still do. We prioritize our iras over our kids five twenty nights, so as you should yeah, I mean we Yeah, we still in back.
Gift to them that they won't have to care for you financially.
We even have let off the gas a little bit more during this renovation and Travis's job shift, and you know we're still in track. It does put that fifty five. It has moved that fifty five to sixty, but we can always catch up later because we have the foundation we built.
I love that. Well, Jen's crushing it. I've got work to do. I thanks for listening.
I put in the work when I had the capacity, so that now when I do not have the capacity, I don't feel so bad about it.
Yep.
And so maybe you're maybe you didn't and you feel bad, but know that in the future there will be additional hard times. Right, So maybe right now is a hard time, so when you get out of it, you can go hard and prepare for the next time when you're capacity. Yeah, we ken swindled.
Ever go back, but collecting information now and informing ourselves now is still better than later. I mean, imagine not getting this information until ten years from now. So do what you can with what you've got. We're all on different journeys, yep. Thanks for listening. Many of you know that we do have a newsletter. It's called the friend Letter. We talk about it all the time. It goes out three times a week. We send out freebie savings tips,
life hacks to help you save money. And when you email us back, when we send you an email and then you email us back, we get it. This one comes from Alex, who just said thank you for all the valuable materials.
God bless us the team richly. Thank you.
Alex.
I was like, wait, what.
Is this last sentence saying that's amazing? What a lovely response. Thanks for getting the friend Letter. If you're not getting the friend Letter, you totally should.
Frugal Friends podcast dot com.
Thanks for listening everybody, Thanks for signing up for the friend Letter. Thanks for being here. Go invest in your future.
Go We love you.
Bye.
Frugal Friends is produced by Eric Sirianni Jill tell everyone real quick about your.
White glove service.
Arilogies for that sound.
Eric and I on a Friday night to this night market where this produce stand was set up. It wasn't a typical produce stand where you could just buy from them. They were advertising their service. So they are a company who buys fresh produce for local restaurants in Saint Pete, and they end up with so much additional produce that they've started a side business where they deliver their leftovers to residences in Saint Pete. So you could sign up for a weekly or bi weekly produce box from them.
So they go and they shop. There's apparently a farmer's market somewhere in Tampa that operates seven days a week, so they send people to go shop for the restaurants every single day to this market, and then they're leftovers they send out to people who want to buy the subscription. So forty five dollars for one duffed box of an incredible variety of fresh produce. I was like, I'm signing up. I got a discount code to sign up for the subscription and I signed up. They ended up delivering me
a box the day I signed up. I was expecting to get it two weeks later, but that hour showed up two hours later with a box to my door, delivered.
From an electric vehicle. This is their whole thing.
Like, the reason we can get it too cheap is because we're already buying it for the restaurants we're delivering it to local restaurants. We're already in the area. We drive a car that doesn't cost us gas, and sure, we'll get it to your door for forty five bucks. So I get this box and I'm like, well, well, we'll just see, we'll see if it's all it's cracked up to be. Holy smokes, Jen, it was so much stuff. It took up when I took it out of the box. It took up my entire island. And I had to
price compare. I just had to. I couldn't move on with my life. I couldn't do other work until I did this.
I love it.
So I went onto Walmart, which is typically where I kept my produce. Now it's where I shop and price compared. Now, I don't know if all the things that I got in the box are organic, but they're at least very fresh,
and most of it locally grown by local farmers. But even compared to non organic things, So if I had bought all those things from Walmart, it would have been forty four dollars and two cents versus the box being forty five dollars, although I had a discount code, so it was actually thirty eight, So I definitely made out on this one. But four of the things that I got in the box were not available at Walmart. So I was able to see what would Walmart charge for this,
but they didn't have it. Rude a baga, pineapple, poblano peppers, grapefruit, I would not have even been able to get, but I got it in this box. And so it was a combination of citrus berries, squash, kale, root, vegetables, like so many different things that is now gonna kind of fuel the flame a bit for me. And what do I even make this week? Because I do get in a little bit of a rut even though I love
I'm learning to cook at home and repurpose ingredients. I've now got all these ingredients I wouldn't typically have purchased, and I'm finding new recipes.
To try with my love.
Those that was delivered to my door for forty five dollars. And I'm so sorry for all of you listeners that you all don't live in Saint Pete No.
But so many places have these secret like co ops that you don't know about. Yeah, and it's just the co op goes to like a like a church or a civic center. And usually you can like pick up a box every week or every other week yours special and that it was delivered to.
You, delivered to me.
But in these these are in a ton of cities. Yeah, and it does even if it if it like gives you the same price, right, you're not saving if you can freeze stuff, if you can if meal planning is hard. It gives you a guide on like what to look for. So it definitely is for you know, a season, no pun intended trying one of these out.
I like the variety of Yeah, it's not going to necessarily work for every person, but for me, it's exciting. And I was even reading their reviews on their website and a couple of people said, like me and my kids get excited to see what's in the box. And then she was describing how she found buy in with her kids in trying new things and making new dishes because they were kind of along the journey like what
did we get this week? So that's also kind of an a bonus point for getting your kids to eat vegetables and try new things.
If it feels like this fun.
Surprise, Yes, highly highly recommend.
Cool. That's my white glove service, love it