Episode Overview

Title: Retirement Benchmarks by Age: 40, 50, 60 (And What If You’re Behind?)
Host: James Conole, CFP®
Date: November 4, 2025

Main Theme:
This episode tackles the concept of age-based retirement savings benchmarks—specifically, the popular idea that you should have a set multiple of your annual income saved by certain ages (40, 50, 60, and 67). James Conole explores both the usefulness and limitations of these rules of thumb, offers case studies showing where they work (or don’t), and ultimately presents a more tailored approach for determining your personal retirement savings target.

Key Discussion Points & Insights

1. The Appeal and Limits of Retirement Benchmarks [(00:00–05:18)]

• Benchmarks Defined:
  Common advice is to have a certain multiple of your salary saved at landmark ages, e.g., 3x income by 40, 6x by 50, 8x by 60, 10x by 67.

  • "If you're 40, you should have three times your annual income saved for retirement. ... If you're 50, you should have six times ... If you are 60, you should have eight times ..." — James Conole [00:46]

• The Problems:

  • These rules are generic and may cause anxiety or false confidence.
  • They don’t reflect personal situations—such as planned retirement age, pensions, home equity, or different spending needs.

• Why They Sometimes Work:
  The basic logic: If you retire at 67 earning $100K/year, with Social Security covering part of your needs, a portfolio of about 10x your salary could fund a 4% annual withdrawal to make up the difference.

  • "That $40,000 gap just so happens to represent 4% of a $1 million portfolio." — [03:18]

2. Where Benchmarks Fall Short: Real-Life Examples [(05:19–10:40)]

• Case 1: Early Retirement — Emily

  • Emily, age 40, earns $100K and has $300K saved (matches the 3x benchmark).
  • She wants to retire at 55 (not 67)—her $300K probably won’t suffice with a longer retirement and no Social Security right away.
  • Insight: The timing of retirement changes the viability of benchmarks significantly.

• Case 2: Significant Pension — Greg & Sherry

  • Both age 50, earn $120K (should have $720K saved but only have $400K).
  • Their pensions will cover 80% of income needs in retirement, so the benchmark overstates what they actually need.
  • Insight: Non-portfolio income sources (like pensions) reduce the need for huge investment portfolios.
  • "They don't need the full 10 times their annual salary at age 67 to retire because they have a pension that's going to cover so much of that." — [07:55]

• Case 3: Non-Traditional Assets — Michael

  • Michael, age 60, earns $80K, has $500K saved (benchmark is $800K).
  • He feels behind but will downsize his home and free up $400K equity when he retires.
  • Insight: Home equity, inheritances or windfalls can bridge the perceived gap.
  • "It's not just his $500,000 of existing liquid portfolio assets. There's also going to be an inflow when he downsizes his home." — [09:36]

3. A Better, Customized Approach to Retirement Planning [(10:41–17:57)]

James outlines a four-step process for tailoring retirement savings goals to your own situation:

Step 1: Estimate Retirement Expenses [11:12]

• Envision retirement lifestyle: What spending goes away (e.g., mortgage, kid expenses)? What rises (travel, hobbies)?
• "Having a somewhat clear understanding...is the absolute most important thing you can do here." — [11:41]

Step 2: Identify Non-Portfolio Income Sources [12:00]

• What will you receive in Social Security? Any pensions? Expected windfalls?
• Your expenses will likely be covered by a mix, not investments alone.
• "Does the combined amount of all these sources equal what you need it to..." — [13:05]

Step 3: Calculate the 'Gap' [13:35]

• Subtract projected non-portfolio income from desired retirement spending = amount investments must provide.
• Example: Desire $100K/year, $40K from Social Security, so $60K/year from investments.

Step 4: Determine Portfolio Needed & Backtrack to Today [14:49]

• Use a sustainable withdrawal rate (e.g., 4%) to see how much portfolio is needed to generate the gap.

  • $60,000 divided by 4% = $1.5 million needed at retirement.

• Calculate how much you need today to reach that future goal (assume returns and contributions, use calculators).

  • "Today, 10 years out from retirement, I would need just under $700,000 in my retirement portfolio to be on track to make it." — [16:58]

• Key Point: This is a personalized, scenario-based calculation—not just based on generic income multiples.

Notable Quotes & Memorable Moments

• On the Limitations of Benchmarks:

  • "It's very cookie-cutter. They don't apply in all situations equally." — James Conole [04:05]

• On the Value of a Custom Plan:

  • "It's not based upon current income. It's not based on your age alone. It's based upon where do you want to be in retirement?" — James Conole [17:19]

• Reassuring Listeners:

  • "If you’re 40, if you’re 50, if you’re 60 and you’re worried that these benchmarks you see aren’t exactly where you are, don’t fret too much. Run a more custom analysis..." — James Conole [17:49]

Timestamps for Key Segments

| Timestamp | Segment Description | |-----------|------------------------------------------------------------------| | 00:00 | Introduction to benchmarks & motivation for the episode | | 00:46 | Listing popular benchmarks (3x, 6x, 8x income by age) | | 03:18 | How the 10x benchmark “works” in an average 67-year-old case | | 05:19 | Example 1: Early retirement’s impact on benchmarks | | 07:55 | Example 2: Pensions and how they alter investment needs | | 09:36 | Example 3: Downsizing and non-portfolio assets | | 10:41 | Custom approach: Four-step process begins | | 11:41 | Emphasizing clarity on retirement expenses | | 13:05 | Integrating non-portfolio income (Social Security, pension) | | 14:49 | Using a withdrawal rate to estimate needed portfolio size | | 16:58 | Example calculation: Backdating needed portfolio to the present | | 17:19 | Customization over generic rules summarised | | 17:49 | Encouragement to focus on your personal situation |

Summary for Non-Listeners

This episode helps listeners rethink the “rules of thumb” for retirement savings, such as saving a certain multiple of salary by specific ages. While those rules can offer a basic starting point, James Conole emphasizes that real retirement planning must be personalized. Age, salary, and generic charts don’t capture your unique goals, likely expenses, non-investment income (like pensions or home equity), or the timing of your retirement. By following a straightforward four-step process—envisioning your spending, tallying income sources, calculating the gap, and running future value calculations—you can get a more accurate sense of what you need. The episode reassures those feeling ahead or behind according to charts: what matters is building a plan based on your numbers, not arbitrary benchmarks.