I have been reading a various retirement articles say how much you should have saved for retirement as a multiple of your income by age.

For instance, this page says:

  • 1x salary by age 30
  • 3x salary by age 40
  • 6x salary by age 50
  • 8x salary by age 60
  • 10x salary by age 67

This article goes on the say "The above savings guidelines include anything you have in a retirement account, like a 401(k) or Roth IRA, company matches, as well as your investments in things like index funds or through robo-advisers."

But can this really be true that one should only include 401k, IRA, and stocks, especially if those comprise a small portion of one's total net worth? From the 4% (or alternately, 3%) rule one needs 25x or 33x of their salary at retirement (presumably, the age 67 amount). I'm assuming that there is some assumption about social security, which by some accounts will become insolvent in the next 15-20 years unless benefits are cut substantially. Additionally the above doesn't mention savings in the form of (for example) equity in one's home. Supposing that one outright owned their home when they retired, they would need less money due to not having to pay rent or a mortgage. Shouldn't this affect how much one needs to have saved for retirement?

So what can I really include in retirement "savings"? Is there any good reason why I can't just treat my total net worth in this figure as long at my assets reduce or offset my retirement expenses?

  • 1
    Not sure what you are asking here. Work out a set of numbers that makes sense to you. Articles like the one linked are targeted to those who need introductory material or obsessed with Keeping Up with the Joneses retirement wise for the view/click traffic. Related: “One should save about 15% of their income for retirement.” What assumptions are implicit in that statement? Sep 28, 2020 at 6:51
  • The fact that you are even asking questions like your last line means that you are beyond the level of the article you linked to. That article is for the huge numbers of people who aren't even approaching saving enough for their retirement
    – AakashM
    Sep 28, 2020 at 8:32
  • 8
    The 4% rule calls for 25x your annual spending/expenses, not 25x your salary. If these numbers are the same (i.e. you are spending your entire salary), then where would the retirement savings come from?
    – yoozer8
    Sep 28, 2020 at 14:03
  • @yoozer8: Exactly! Like all too many such articles, this one is making the assumption that everyone spends their entire salary. (Admitted, that's true for a lot of people, but I hope we're smarter than that :-)) So you really need to look at what you realistically spend, and how that might change in retirement - e.g. you have a $2K/month mortgage payment now, but will have it paid off before retirement.
    – jamesqf
    Sep 28, 2020 at 16:46
  • You are misreading the sentence. It says "includes" not "only includes ". In can and should include other savings too. Sep 29, 2020 at 2:36

1 Answer 1


So what can I really include in retirement "savings"? Is there any good reason why I can't just treat my total net worth in this figure as long at my assets reduce or offset my retirement expenses?

You can include anything you want. There is no "retirement police" that will say you can't use whatever you have at your disposal. Seems like a silly response, but I think people sometimes forget that articles like what you've linked are just very general guidelines and suggestions. People will give you opinions about if you should or should not count on particular resources for financial security, but it's up to you to make the decision after conducting the proper research.

If you want to stash away $1M in gold bars and call that your retirement savings, then go for it. If you have 3 properties (real estate) that you can leverage for income or liquidate, great. The point that needs to be driven home is that you should have a plan. Only you can truly determine what your retirement needs will be and you need to plan accordingly. So many people hit retirement age with little to no understanding of how they will survive Life-After-Income, that they're actually not able to retire or at least nowhere close to the fashion that they were hoping to.

Personally, I work with a financial advisor who has helped me evaluate long-term goals and put plans in place to ensure we reach those goals. Their planning includes things like real estate value and accounts for inflation and the expectation that average life-spans are getting longer.

I think the key takeaway is that you should diversify. Stocks, 401Ks, IRAs, real estate, cash, etc. are all different components and work together to build a portfolio that can survive market turns and help ensure a more secure future for yourself.

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