I love my job. Really, I do. I love all the conversations I have with people about one of the most intimate parts of their lives – their money. After all, isn’t money the last taboo? And I get to be there with clients to help them wade through all the fears and expectations they’ve taken on over the course of their lives.
During these conversations, I’d say there’s one thing that I’m asked the most often. People ask all sorts of questions about their financial planning and their journey towards retirement, and there are several milestones along the way. But one sticks out as one of the most critical points of reference for my DINK and SINK clients, “How much money should I have?”
I wanted to share my answers here on the Prana Wealth blog to hopefully help as many other people start to address their financial situation with a greater sense of clarity. So I’m here to tell you: This is how much money DINKs should have by age 50.
The (Not So) Easy Math
People want to know if they’re on track for a comfortable, financially robust retirement. But it doesn’t happen by magic, and it certainly doesn’t happen by just sitting back and doing nothing. At some point, you’ve just got to do the math.
If you’re working hard for your retirement, or even if you haven’t really given it much thought yet, this is how to work out how much money DINKs should have by age 50. In fact, whatever age you are, you can work out how much money you should have saved.
What I want to do is give you a simple formula to help you calculate this. You know, just stick some numbers in and let the calculator work it all out for you. But as it turns out, even the simple way is not so simple. You might just want to hire a financial professional to have a look through it with you – I’m just saying.
However, in order to make this as simple as possible for you, I’ve created a spreadsheet that you can download. Then just input your own figures. I explain what you need to do, step by step, so you can’t go wrong – and it will calculate how much you should have saved up, specific to your own circumstances. It will calculate that magic number, all according to your age, your annual income, your savings and your planned retirement age.
How Much Money DINKs Should Have By Age 50
Download my super-straightforward spreadsheet spreadsheet that does all the heavy lifting by clicking here. You’ll then need to work out or find these three bits of information:
- Your current living expenses (Download the spreadsheet above, and click on the ‘Living Expenses’ tab for a quick and easy method to calculate this)
- The amount you save every year
- Your monthly Social Security retirement amount (Contact the Social Security Administration if you don’t know your projected monthly payments)
That’s it – it’s easy, right? So go download the spreadsheet I’ve created for you. It’ll just take five minutes to figure it out.
Calculate How Much Money DINKs Should Have By Age 50
In case you’d just like a run-down of the math, I thought I’d show you a quick example. I spoke to a client the other day who asked me just this question – he wanted to know if he was on the right path or not. We’ll call him Joe.
Joe has just turned 50 this year, and I think it’s fair to say he’s had a moment of panic about his big milestone number. He really wanted to have a quick look through his finances and make sure that everything looks in order.
Happy at work, Joe envisions working until he’s 67. He’s been steadily saving and knows how much monthly benefit he’ll get. He doesn’t want to have to change his lifestyle when he’s retired, so he doesn’t expect his annual living expenses to change.
Joe, Aged 50
- Desired retirement age: 67
- Annual living expenses: $120,000
- Annual portfolio contributions: $10,000
- Social Security monthly benefit: $3,100
- How much he should have: $1,347,484*
So after running the figures and looking at his retirement pot, Joe can see he’s on track. Suddenly 50 doesn’t feel so scary anymore.
Some Extra Considerations For Those Of Us Without Kids
For those of us who don’t have kids, retirement gets a little more complicated and there are some extra costs you might want to take into account. That’s why it makes even more sense to be aware of how much money DINKs should have by age 50, and keep your saving goals in sight.
As a DINK or a SINK, your annual living costs might increase as you progress through your retirement years, so here are a few considerations you might want to take into account and make sure your retirement pot is going to give you the retirement you want.
You might need to have:
- Funds to potentially hire a guardian in old age
- Resources to hire at-home assistance, if needed
- Money to pay for the kind of elder housing you’d want (rather than relying on someone to choose for you)
Between the age of 50 and 55 is also the time when it makes sense to make a decision about long-term care insurance. As you can imagine, that’s not cheap. At the moment, only a tiny percentage of Americans have long-term care insurance, but many of us will need it at some point of our lives.
Long-term care insurance covers lots of the costs of care as you age, and these aren’t expenses covered by Medicare. This could end up costing you a small fortune so protect your retirement funds by sorting out insurance.
Because of the additional retirement and late-in-life concerns that are unique to those of us who don’t have kids, it’s important to start setting yourself up for a financially independent retirement if you haven’t already.
If You’re A Little Behind, That’s OK
If you did this exercise and you’re in good shape, feeling financially fighting fit, congratulations! You’ve done a great job at saving so far. But if you’re a little (or a lot) behind, repeat after me: “I am going to be OK.”
When I meet with someone to talk money for the first time, at some point in the conversation, their tone transitions into something akin to a confessional.
“I should have more money than I do.”
Everyone says this. Everyone. Even if they have millions.
So, let’s put this thought in the scrap bin next to, “I should lose a few pounds.” We all know nachos and queso dip are delicious, so don’t beat yourself up.
None of us (myself included) go through life playing the money game perfectly. Chances are, you’re much better off than you give yourself credit for.
Plus, I’ve seen clients go from struggling to financially abundant in less than a year. That kind of change is easier than you think – if you’re willing to be honest with yourself and make bold decisions.
If you can get into a potentially awkward conversation with a financial planner over where you are financially, your odds of having a successful, comfortable retirement go way, way up. Over the years, believe me, I’ve seen it all. I’m certainly not going to judge you.
So, again, repeat after me: “I am going to be OK.” And get in touch – schedule a free introductory call to see if we’re potentially a good fit.