We previously mentioned that graduate couples should have no problem saving $1 million.
Now, here’s a more precise way to calculate how much you should already have in savings based on your current age and current income. This method is taken from JP Morgan Asset Management’s Guide to Retirement 2014.
Calculate How Much Savings You Should Already Have
Refer to the table below (click to see a bigger version), go to the intersection of your current age and closest current annual salary, and note the number at that intersection. Take that number and multiply it with your current annual salary. The result is the ideal amount of savings you should already have.
For example, if you are 35 years old and earn $100k per annum, you should have 1.5 x $100k = $150k in savings. If you are 40 years old and make $200k, you should have 3.7 x $200k = $740k in savings.
This also means that a 40-year-old graduate couple, with each spouse earning $150k, should have $960k in combined savings. Very close to a million dollars.
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