Level of Savings

Heat_Wave

Hi All,

Apologies if I am posting this in the wrong forum, but I'm just wondering, what level of savings should a 30 year old have (approximately)?

Thanks.

Smee_Again

How long is a piece of string?

There’s no way of answering that as it depends on circumstances, but I’d say 6 months living expenses which could also be put towards a house deposit at some point in the future.

Plus whatever pension contributions max out your employers contributions.

Buddy Bubs

When I was 29 I had 37k. When I was 30 I had none because I'd bought a house and paid a deposit and furnished it.
So, depends on circumstances really. Loads and loads of them.

Jim2007

Heat_Wave wrote: »

Hi All,

Apologies if I am posting this in the wrong forum, but I'm just wondering, what level of savings should a 30 year old have (approximately)?

Thanks.

I don't think yo can quantify it as peoples circumstances are going to be different.


I terms of behavior though I'd expect:
- You have a rainy day fund to cover say six months average living expenses.

- You have maxed out your pension contributions

- You have put something thinking into retirement planning and might even have a plan in place.


The problem about financial decisions like retirement planning etc... is that decisions made or not made when you are young become very expensive if not impossible to correct later in life.

Vestiapx

Heat_Wave wrote: »

Hi All,

Apologies if I am posting this in the wrong forum, but I'm just wondering, what level of savings should a 30 year old have (approximately)?

Thanks.

If the people that believe that inflation wlli be the natural side effect of this thing we are all going through then none, you should have none savings, I'm seriously considering buying asserts and going into debt so that if inflation happens the asserts will protect my wealth and the debt will be erroded. But realistically you should have a minimum of 100 a week in wealth put aside since you left college so at 30 you should have 30-40 k

Louis Friend

I’m a firm believer in having 6 months’ living expenses in cash.

DellyBelly

If you have been prudent you should hope to have around 35k saved I would say maybe even a bit more

Yyhhuuu

What would be the median savings of people in Ireland. I suppose could be called a heavy saver, saving about €20,000 a year. There seems to be a lot of people saving a lot of money since covid struck if we are to believe what we read in the papers.

Padre_Pio

Heat_Wave wrote: »

Hi All,

Apologies if I am posting this in the wrong forum, but I'm just wondering, what level of savings should a 30 year old have (approximately)?

Thanks.

Who knows. Depends on your job and circumstances. Some could have 100k tucked away, some would struggle to have 2k in the bank.

pwurple

Rule of thumb I go by... this is for pension savings.

By the time you are 30 you should have at least the equivalent of your annual income saved for retirement. By 40 it should be three times your annual income; by 50, six times; by 60, eight times and by retirement 10 times.


In quick access accounts I keep 3 months wages.

And then if saving for something in particular , like a car, holiday or house, a separate fund for that , with a plan on when to use it.

Batattackrat

pwurple wrote: »

Rule of thumb I go by... this is for pension savings.

By the time you are 30 you should have at least the equivalent of your annual income saved for retirement. By 40 it should be three times your annual income; by 50, six times; by 60, eight times and by retirement 10 times.


In quick access accounts I keep 3 months wages.

And then if saving for something in particular , like a car, holiday or house, a separate fund for that , with a plan on when to use it.

MEH, some people are fixated on pensions for the tax benefits even though the earliest age you can access is 60.

Save for a mortgage and after that maybe 20% of your monthly take home pay.

Always have a year in reserves for bills is my motto but the main piece of advice i give anyone is don't crazy on cars, no one cares if your driving a 21 bmw or a 08 corolla. Thats all in our head.

Louis Friend

Batattackrat wrote: »

MEH, some people are fixated on pensions for the tax benefits even though the earliest age you can access is 60.

Save for a mortgage and after that maybe 20% of your monthly take home pay.

Always have a year in reserves for bills is my motto but the main piece of advice i give anyone is don't crazy on cars, no one cares if your driving a 21 bmw or a 08 corolla. Thats all in our head.

Not true. They can generally be accessed at 50 and they should be the bedrock of someone’s plan.

Henry Ford III

Louis Friend wrote: »

Not true. They can generally be accessed at 50 and they should be the bedrock of someone’s plan.

Benefits from occupational schemes can be accessed from age 50 by way of early retirement, but those from PPPs and PRSAs can only be accessed from age 60 unless the plan owner is in serious ill health.

Padre_Pio

Henry Ford III wrote: »

Benefits from occupational schemes can be accessed from age 50 by way of early retirement, but those from PPPs and PRSAs can only be accessed from age 60 unless the plan owner is in serious ill health.

Remember that age 50 or 60 isn't long coming around.

If you're around 30 and you've worked since you were 18, you're nearly halfway through your working life (planning to retire or semi-retire around 50)

Batattackrat

No point been the richest man in the grave yard but no point been broke in retirement either.

Find a level your happy with. Excessive saving is going to ruin your life where peoples minds trick them into spending as little as possible.

Find a balance where you can live life to the max without compromising your happiness been too frugal.

Padre_Pio

Batattackrat wrote: »

Find a balance where you can live life to the max without compromising your happiness been too frugal.

Very true. That's why there's no "one size fits all" pension plan.

But a poster above said its good to have 6 months of living expenses saved.
Remember that when you retire, you'll need maybe 30 years of living expenses saved.

Louis Friend

Henry Ford III wrote: »

Benefits from occupational schemes can be accessed from age 50 by way of early retirement, but those from PPPs and PRSAs can only be accessed from age 60 unless the plan owner is in serious ill health.

That’s why I said “generally”, and most people aren’t self-employed

Buddy Bubs

Padre_Pio wrote: »

Remember that age 50 or 60 isn't long coming around.

If you're around 30 and you've worked since you were 18, you're nearly halfway through your working life (planning to retire or semi-retire around 50)

Hardly anybody retires or semi retires at 50. Doubt it's even 1%.
If you are 30 and working since 18, you are about a quarter of the way through your working life.
Still though, you should be funding a pension from early days, at least a small amount.

Jim2007

Buddy Bubs wrote: »

Hardly anybody retires or semi retires at 50. Doubt it's even 1%.
If you are 30 and working since 18, you are about a quarter of the way through your working life.
Still though, you should be funding a pension from early days, at least a small amount.

Probably correct for those in employment and not having plans for early retirement. On the other hand, most of the self employed people I know have at least cut back to 50% - 70% and we (five friends) retired between 52 - 54, but we had intended to do so since our early 20s.

pwurple

Batattackrat wrote: »

MEH, some people are fixated on pensions for the tax benefits even though the earliest age you can access is 60.

Save for a mortgage and after that maybe 20% of your monthly take home pay.

Always have a year in reserves for bills is my motto but the main piece of advice i give anyone is don't crazy on cars, no one cares if your driving a 21 bmw or a 08 corolla. Thats all in our head.

The OP didn’t say what they were saving for. By 30 a lot of people already have a mortgage and a car for example, as those were your guesses.

I gave options for retirement and rainy day fund. Who knows what the OP actually is looking for.

But, avoiding tax on your earnings is financial common sense. It’s a bonus on your money effectively. For each 60 euro you take out if your payslip, 100 goes into the pension savings. More if your employer matches some of it. It’s then invested to actively grow. The trick is managing the tax again on the way back out... a lump sum can be taken tax free for example.

If you consider the alternative of paying tax and then sticking it in a bank account to be eroded by inflation?



You can access a pension fund by 50. And those who plan for it, by saving, do retire then.

Henry Ford III

Louis Friend wrote: »

That’s why I said “generally”, and most people aren’t self-employed

Any evidence of that? Best estimate of pension coverage suggests c.50% coverage. Remembering that in the absence of a scheme an employee is treated as being in a non pensionable employment and is eligible to do a PPP or PRSA.

So your "generally" comment isn't accurate.

Kerry25x

Louis Friend wrote: »

I’m a firm believer in having 6 months’ living expenses in cash.

Does a couple need 6 months each or do you bank on it being very unlikely you'll both lose your jobs at the same time?

Smee_Again

Kerry25x wrote: »

Does a couple need 6 months each or do you bank on it being very unlikely you'll both lose your jobs at the same time?

Can you pay all the bills on 1 salary?

Louis Friend

Henry Ford III wrote: »

Any evidence of that? Best estimate of pension coverage suggests c.50% coverage. Remembering that in the absence of a scheme an employee is treated as being in a non pensionable employment and is eligible to do a PPP or PRSA.

So your "generally" comment isn't accurate.

It is actually. Unless you’re suggesting that more people are self-employed (potential pension access 60) than employed (potential pension access 50)?

In 2019, there were 320,000 self-employed people in Ireland.

And 2,000,000 employees...more than six times as many.

Kerry25x

Smee_Again wrote: »

Can you pay all the bills on 1 salary?

Let's say you couldn't, thats where the 6 months of living expenses saved for the out of work partner comes in.

Louis Friend

We have six months’ worth of household expenditure in cash.

Jim2007

Kerry25x wrote: »

Does a couple need 6 months each or do you bank on it being very unlikely you'll both lose your jobs at the same time?

If you are a couple then, you could combine it and target a figure of 6 months combined living expenses. And make sure it is average spending not the lowest estimate.


There are all kinds of reason why you might need to seriously live on theses savings for some time, even though it is not the normal situation:


- Unexpected financial commitments is the common one


- In theory, when made unemployed you should be able access unemployment benefits quickly and most people do. But it is also when FU are discovered. Employers failing to pay into the system, employers failing to keep proper records of payments, lost records on the authorities side etc... it really should not happen but we are all human.


- Disputes between insurance companies in accident and injury claims


- Redundancy payments in the case of a sudden closure of your employer etc....


- Missing official records. This really hit my father in law (RIP) big time. Here in Switzerland his name is a common as the typical John Smith and when he came to collect his pension they'd lost almost 3 quarters of his contributions as a result of the various system upgrades and changes over a 40+ year period. And they were very adamant that he had made no contributions. It took nearly 6 months to sort it out.

Henry Ford III

Louis Friend wrote: »

It is actually. Unless you’re suggesting that more people are self-employed (potential pension access 60) than employed (potential pension access 50)?

In 2019, there were 320,000 self-employed people in Ireland.

And 2,000,000 employees...more than six times as many.

You aren't getting it.

Using your figures that's mean 1,320,000 would be either self employed or in non pensionable employment.

Earliest possible retirement for any of those is age 60.

Louis Friend

Henry Ford III wrote: »

You aren't getting it.

Using your figures that's mean 1,320,000 would be either self employed or in non pensionable employment.

Earliest possible retirement for any of those is age 60.

I don’t agree with your analysis.

Pussyhands

There are 3 factors to how much you have at any age.

1 - your income.

2 - Your living arrangement. Do you live with parents rent free or rent? Are you renting alone or house sharing?

3 - Whether you have a mortgage. If you have one, then you'll have a chunk of your cash in the mortgage.

Anyone earning 40k+ and house sharing (paying 5-600 per month) can save 15k+ a year if they wanted to.

If you earn 40k that's a net income of 32k. 7500 on rent leaves 24.5k.

Saving 15k means you have 790 per month to spend on bills and luxuries.

Padre_Pio

Pussyhands wrote: »

If you earn 40k that's a net income of 32k. 7500 on rent leaves 24.5k.

Saving 15k means you have 790 per month to spend on bills and luxuries.

790 a month is less than 200 a week for bills and luxuriesnecessities.
Half that could easily go on a car (fuel, maintenance, insurance, tax)

Food, utilities, clothing etc would eat up the rest in no time at all.