How much should you have saved for retirement by age 30 or 35? This MarketWatch article drove Millennials wild last week (read the comments) when it suggested 30-year-olds should have one year’s salary put away for their future, while those aged 35 should already have twice their salary saved for retirement.

I’ve written before about money milestones and age-based savings benchmarks. While they can be fun to look at to see how you stack up, you should take these recommendations with a big grain of salt.

Remember that we all start out at different times and at different speeds and with different opportunities. If you stayed in school to earn a graduate degree you might be years behind your peers and deep in debt as you begin your career. But, with increased earning potential, you may quickly catch and surpass those in your age group. In this case it’s not about how you start but how you finish.

“Comparison is the thief of joy.” – Theodore Roosevelt

Mad Money Milestones Edition

Ben Carlson at A Wealth of Common Sense dug into the numbers to see just how plausible it is to save twice your salary by age 35. Start at age 22 and you only need to save 11 percent of your salary each year. Wait until age 30 to start saving for retirement and you’ll need to sock away 30 percent of your income to double up your salary by age 35.

The key is to start the habit of saving, whether that’s $50 every paycheque or a certain percentage of your salary, and then make an effort to increase that amount each year – hopefully as your salary increases along with it.

I started saving small amounts in my early twenties. It wasn’t easy. Heck, my first real job paid just $26,000/year. But I stuck with it and made sure to take advantage of the odd bonus, promotion, and of the few years when my employer offered matching RRSP contributions.

The first $25,000 felt like an eternity. But then that quickly turned into $50,000, then $100,000, and now, at age 38, I have just over twice my salary tucked away inside my RRSP. It’s doable.

My advice is to forget about arbitrary age-based money milestones and instead set individual goals that focus on growing your savings rate and net worth each year. Do that, and you’ll be well on your way to a healthy retirement.

This Week’s Recap:

On Monday I offered some advice to members of Generation X on how to fix their finances.

On Wednesday Marie wrote about retirement planning for late starters.

And on Friday Marie offered some advice to those who have been asked to be an executor.

Many thanks to Rob Carrick for including Marie’s post on renting vs. owning in retirement in his latest Carrick on Money newsletter.

Finally, I had the pleasure of contributing to Tim Kiladze’s excellent piece in the Globe and Mail about why Air Canada is abandoning Aeroplan (Globe subscribers only, unfortunately).

American Express deal for business owners

I recently signed-up for the American Express Business Gold Rewards Card – which has a screaming deal on right now that gives you 40,000 Membership Rewards points when you spend $5,000 in the first three months, plus waives the $250 annual fee in the first year.

You can transfer Membership Rewards points 1:1 to Aeroplan. One Aeroplan mile is conservatively valued at 1.5 cents, which means you can earn $600 in travel rewards value with this deal.

If you’re a business owner you’ll want to take advantage of this offer today.

Weekend Reading:

The well-managed Canada Pension Plan increased its total assets by nearly $40B last year and earned 11.6 percent on its investments (after fees).

A Wealth of Common Sense blogger Ben Carlson explains how half a percent can change your retirement.

Here’s Morgan Housel on why the majority of forecasts either turn out wrong or can be ignored to begin with.

This former Winnipeg investment adviser was fined $485K for ‘misappropriating’ his wife’s RRSP money, which is a fancy way of saying he forged her signature 57 times over four years to withdraw more than $271,000.

A nice update from Regina, SK blogger Tim Stobbs who retired before his 40th birthday and has made the difficult transition from saver to spender.

“The first few weeks were great because you think, I can do whatever the heck I want today, and it feels like summer as a kid all over again or like a string of Saturdays.”

Up-and-coming blogger Nick Maggiulli, Of Dollars and Data, shares a cool story on why focusing on the long term is more important than ever.

Have you ever received bad financial advice from someone that truly thought they were helping you? Ben Felix latest video answers the question, do most advisors really know what they’re talking about?

Jonathan Chevreau says guaranteed income is a no-brainer in retirement. Just don’t call it an annuity.

Half Banked blogger Des Odjick’s take on mortgage insurance is music to my ears: Why most people really, truly, shouldn’t buy it.

Debt expert Scott Terrio explains why it isn’t wise to carry a savings balance alongside of high interest debt:

“In almost all cases it makes more sense financially to pay down credit card debt than it does to leave money in a savings account. Once your debt is paid off, you can always start saving again. Yes, we’d ALL like to have savings now, but when you are in a debt situation, your realistic options are limited. Back to prioritization.”

Use this life expectancy calculator to find the life expectancy for people of your age, country and gender, as well as the proportion of your life you can on average expect to be healthy.

“I just want a job.” Why some older workers feel they’re being passed over as Alberta’s economy starts to pick up steam.

Previous understanding of the new mortgage rules inferred that borrowers who switch lenders at renewal had to re-qualify at the bank’s posted rate. Not so fast, Mortgage expert Rob McLIster reports that new interpretation suggests borrowers can now switch from one lender to another provided there is no increase in risk. Read all about how to switch for a better deal here.

Ellen Roseman explains why you may have to fight to get repairs covered, even under warranty.

Finally, is the $900 Roomba vacuum cleaner worth the hype? MoneySense put it to the test:

Have a great weekend, everyone!

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