Experts: Here's How Much You Should Have in Your Investment …

GoBankingRatesJohn CsiszarUpdated April 4, 2023, 5:05 AMMongkol Onnuan / Getty Images/iStockphotoMongkol Onnuan / Getty Images/iStockphoto

There’s no exact “right or wrong” number you should have in your investment account as it will vary based on your personal financial situation. However, if you’re looking to accumulate a certain amount by the time you retire, it’s a good idea to have checkpoints along the way so that you know you’re on the right track. The amount you should have in your investment account, therefore, is a combination of how old you are, how much you’re earning, how aggressive you are with your investments and how much you think you’ll need to fund your specific retirement lifestyle.

Find Out: What Happens to Social Security When You Die?
See: 3 Ways To Recession-Proof Your Retirement
As it can be hard to nail down all of these variables, it’s best to work with a financial advisor. However, to get a head start on your planning, here’s a look at the amounts you might want in your investment account at various times in your life, and according to various other parameters.

How Much Should You Be Setting Aside?

When you start your savings and investment program, there are two ways to determine how much you should set aside.

The first is a dollar amount and the second is a percentage of your earnings. Setting aside a dollar amount may be easier in terms of calculating your future nest egg, but choosing a percentage of your income to save may be more practical. Imagine that you want to have £1 million in your investment account by the time you retire.

Using any of a number of calculators that are available online, you can simply plug in your age and your expected rate of return to determine how much you need to put in your investment account every month. While numerous variables will affect this amount over time, it’s a good place to start. If you use the “dollar amount” strategy, however, it may not mirror the realities of your own cash flow.

If you calculate that you need to set aside £1,000 per month to reach your long-term savings goal but you only earn £2,000 per month, that’s a pretty unrealistic goal. On the other hand, if the calculator tells you that you only need to save £400 per month but you earn £10,000, you should clearly have room to beef up your savings. Using the “percentage strategy,” most advisors suggest that you should attempt to put aside at least 10% per month into your savings and investment accounts.

But some say that should be even higher. As Mark Henry, founder and CEO at Alloy Wealth Management, told Fortune magazine, “Ideally, you’ll invest somewhere around 15%-25% of your post-tax income. If you need to start smaller and work your way up to that goal, that’s fine.

The important part is that you actually start.” Take Our Poll: Do You Think the US Should Raise the Medicare Tax on High Earners To Help Save the Program?

How Much Should You Have at Various Ages?

It’s common in the financial industry to publish tables of how much money you should have in your investment account at various ages. Fidelity is one of the most well-known providers of this type of information, and it uses a clever way to arrive at a figure that’s tailored to each individual investor.

Specifically, the experts at Fidelity recommend that you have this much money in your investment account at each age:

  • Age 30: 1x your salary

  • Age 40: 3x your salary

  • Age 50: 6x your salary

  • Age 60: 8x your salary

  • Age 67 (full retirement age for most drawing Social Security): 10x your salary

These are excellent general guidelines, but you’ll have to adapt them to your specific lifestyle. For example, if your idea of retirement is around-the-world cruises and private jets, you’ll likely need more than 10x your salary by the time you retire. The opposite is also true — if you plan to hunker down and live a quiet, self-sustaining lifestyle, you may not need as much.

But the general outline is solid. If you’re earning £50,000 at age 40, for example, Fidelity recommends you have £150,000 in your account. If your earnings have jumped to £75,000 by age 60, then you should have £600,000.

The Bottom Line

The amount you should save varies based on your personal financial situation.

However, experts recommend using guidelines that you can tweak to meet your own needs so that you stay on track with your retirement goals. Start by estimating how much you think you might need to fund your retirement lifestyle and work backward. Constantly monitor your progress as you move through life, and work closely with a financial advisor to help you devise savings and investment strategies that can help you reach your goals.

More From GOBankingRates

This article originally appeared on GOBankingRates.com: Experts: Here’s How Much You Should Have in Your Investment Account

Originally published April 4, 2023, 5:00 AM

deep-sea-world listed on couponmatrix.ukflower-station listed on couponmatrix.ukhotel-du-vin listed on couponmatrix.ukopodo listed on couponmatrix.ukpink-boutique listed on couponmatrix.ukpockets listed on couponmatrix.uk
deep-sea-world listed on couponmatrix.ukWelcome to Deep Sea World, Scotland's national aquarium, bringing you sharks, fish and all manner of sea-creatures right in front of your eyes. If you want to get truly up close and personal you can even swim with the sharks - scary! Whether you're coming for school visits, with your family, friends, on a date or by your adventurous self, Deep Sea World will give you an experience you will never forget. With Deep Sea World vouchers you can enjoy the deep blue for less. Get close to nature with Deep Sea World.
flower-station listed on couponmatrix.ukFlower Station is your one-stop shop for any and all beautiful bouquets needed to make a much-loved face light up. Whether it’s their birthday coming up, they’re feeling a little low or you’re simply looking to surprise your partner, save on your spending with a Flower Station discount code. Flower Station also provide a decorative service for big events such as weddings and funerals, so be sure to hit them up if you’re in need of a quality florist.
hotel-du-vin listed on couponmatrix.ukIf you’ve always dreamed of a night in a fancy hotel, then it doesn't get more romantic or appealing than staying at a Hotel du Vin establishment. Scattered throughout the UK, Hotel du Vin offer a unique boutique hotel experience that you won’t forget in a hurry. And, with your Hotel du Vin discount code, you’ll be able to snap up a special night out of town or a weekend away for less than you might think.
opodo listed on couponmatrix.ukLooking for a low stress way to book a holiday or a trip away? Opodo will help you with its one-stop shop for holiday bookings. With an emphasis on making their website as fast, clear and useful as possible, they aim to help you book a holiday as quick as possible. Here at Groupon we look to make that process one step better by saving you money with an Opodo discount code, ensuring you've got your flight, hotel and car rental in one concise and reduced package.
pink-boutique listed on couponmatrix.ukFounded in just 2012, Pink Boutique has quickly made a name for itself as one of the UK’s best new clothing retailers. With a wide range of fun, affordable and on-trend fashion options to help women look and feel great, Pink Boutique has everything you need to create your dream aesthetic, so grab a Pink Boutique discount code and achieve this look for less. From dresses to denim, Pink Boutique has everything you’re after.
pockets listed on couponmatrix.ukMen with an eye for the exquisite will love a little Pockets clothing in their wardrobe. Sporting a collection of men’s designer threads from high-profile brands like Lacoste, Belstaff and Ralph Lauren, imagine the amount you can save when you shop smart using a Pockets discount code. Backed by a beautiful array of designer shoes, accessories and smart wear, nothing makes you feel quite as fancy as a fresh outfit from Pockets. At Groupon, we understand that saving money is important to our customers. That's why we work hard to find the best discount codes for Pockets products.We search the internet for discount codes and share them with our customers. We also offer a variety of ways to save money, including coupons and deals. If you're looking for ways to save money on Pockets products, Groupon is a great resource. We'll help you find the best discount codes and deals so you can save money on your next purchase. Smart up in the snazziest shirts for your next social occasion with Pockets and you’ll be the most high-class man in attendance. Be it from the designers at Hugo Boss or Paul Smith, you can save up to a triple-digit figure by making the most of any Pockets promo currently running. Shop a sleeve size by the season and start setting trends wherever you travel with Pockets superior shirts.