With Americans worried now more than ever about retirement and savings, what is the right amount of savings each person should have by a certain time? Acorns CEO Noah Kerner spoke to Yahoo Finance earlier this week on why nearly a quarter of Americans are worried about becoming homeless due to a variety of financial pressures, according to Acorns' 2024 Money Matters report.

Yahoo Finance Contributor and Maconomics Founder Ross Mac joins Wealth! to break down what savings accounts look like at every age and give insights into common retirement questions.

For more expert insight and the latest market action, click here to watch this full episode of Wealth!

This post was written by Nicholas Jacobino

Video Transcript

Do you know if you have enough money in your savings account?

Big question there.

A tiktoker recently answered that key question.

Can we normalize telling each other what our savings accounts are?

Because I really wanna know, I feel like I see people saying like they have no savings.

I feel like I see people having insane savings and I just don't know what the normal is.

And while discussing your savings balances publicly is an individual decision, we wanna find some answers of our own.

Yahoo finance contributor, Ross Mac joins us now to help answer all of your savings questions.

Hey, Ross Brad, how you doing, man?

I uh I happen to be on tiktok quite a bit and I saw this one going viral.

And the more interesting one that I saw that someone actually did a duet to that effectively saying let's not just talk about savings, let's talk about retirement.

And I think, you know, our generation now now that we have more social media, everybody is now have having and willing to have these open dialogues, right?

I think back when I was first, you know, getting into the workforce, these type of conversations were taboo.

Right.

I never knew exactly how much I should be contributing to my 401k.

I just heard, like, just do what you're employer matches, but I never knew exactly how much I should be going even beyond that.

So, I think it's a great, one, great conversation to start having.

But two, I think it's something that we should actually talk about.

Right.

I think it's troubling when you see that more than 50% of Americans feel as though they're not ready to actually have a comfortable retirement.

A and so with that in mind, I mean, have we adequately mapped out where everyone should be or the percentage that should make people comfortable with how much they're putting away in savings?

Absolutely.

Right.

So according to fidelity, by the time you reach the age of 30 you should have one times your actual salary.

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So if you're making $80,000 but guess what, you need to have about $80,000 in your different retirement accounts, right?

By the time you reach 40 we're talking three extra salary, by the time you get 50 we're talking six extra salary, 68 X and then 6710 X.

And so the idea of thinking about this and obviously another method is the fire method where it's literally saying you wanna have 25 X, your actual annual expenses.

And the way you wanna think about this is just saying, ok, how am I able to live comfortably by literally keeping my money invested and whether I'm just living off my dividends or, you know, capital gains, et cetera, that is the way you want to think about that.

And so obviously, right, the best time to plant a tree was 20 years ago.

The second best time is actually today.

And the idea is that sure you might feel as though you're behind, but it's never too late to actually catch up.

And so you ask yourself, how do you get to those numbers?

Well, one, you, you want to the target that I say you need to at a minimum be saving A K A investing roughly 15% of your actual uh your actual revenue, right?

That being your salary.

And then after that, I think another thing to take advantage of is just other tax advantage, retirement accounts, right?

So if your employer is willing to match, you call it, I don't know, 5% right?

Max that out.

But another thing to think about is, hey, we don't know what our ta the tax plan will be once we get to that retirement age.

So I love the idea of also opening a rough ira where that money, what you see is what you get because you would have been that money that you're invested has already been taxed.

And another thing you just want to automate your savings slash investing, right?

I think, you know, people can feel a little anxious when it comes to retirement.

But everything, you know, if you have your own retirement goals, it's gonna boil down to what you're doing today to ensure that you are gonna be comfortable once you get to that retirement age, right.

We're living a lot longer.

So, so the good thing, right?

We're living longer, but the bad thing is, hey, now you need a little more money when it comes to retirement, y'all.

Finance contributor, Ross Mac.

Thanks so much.

Thank you.