"How much money should I have saved by 50?"

That is the title of an article at Yahoo where they look at savings benchmarks for 30, 40, 50 and I am guessing one will get published for 60. This topic can be useful and my hunch is that Yahoo has run pretty much the same series several times before but either way there's utility here and hopefully I can add a little nuance to it. 

It was sort of a list of important but not really new ideas. At 50 they say we should have 5-6 times annual salary which works out to about $350,000 by their research, they explain catchup contributions (starting at 50, most retirement account types allow for larger contributions). It then gets into figuring out when you want to retire which is important, looking at your asset allocation but I would argue that should be ongoing, if you're likely behind the pace at 50 then figure out what you need to do to get on track, review spending habits (focus on the big things) and look for ways to reduce fees which seems the least capable of moving the needle. Yes, throwing money away on a streaming service you don't use or an online subscription you don't read is not good and there's no reason not to cancel, I just don't know that there can be much of an impact from that. 

Something that the article touched on but I would give more prominence to is the persistent reality that it is very common for people to have their hand forced into retirement much earlier than they planned on. Maybe it's a health issue or something bad happens at work but either way, the latest numbers are something like people plan to retire at an average age of 67 but end up retiring at 62. 

What would you do if your money had to start producing an income five years earlier than you were expecting? There's a double effect here, one is it's five fewer years that your entire pot is allowed to grow and the amount you have accumulated has to be relied on for five more years than you were planning. 

We've talked about this plenty about actively pursuing a Plan B, not waiting for something negative or unexpected to happen and I am coming to think this is far more important than I previously realized. The 67 versus 62 gap is potentially very serious for what we are told is an under-saved population. 

Instead of focusing solely on how much money we should have by some random age, I would also add in some different types of benchmarks that I believe are very important. 

At some point around 50, earlier would be better, if someone has been gainfully employed and not had some sort of very expensive tragedy, I think there should be some measure of financial independence. This includes a decent (intentionally vague word) retirement account balance, a few months of emergency money and not choking on debt. This benchmark becomes much easier to achieve for anyone who has made good decisions about their mortgage and at 50 is close to being paid off and has avoided the treadmill of new cars every five years. 

If that wasn't harsh enough, I think it is important to take health matters into our own hands, doing all we can to give ourselves the best chance of avoiding chronic illness. Being sick has a triple effect. There is a poor quality of life, it is expensive and potentially hampers or takes away completely the ability to earn an income. Outcomes are of course out of our control, but doing all that we can is within our control. Cutting carbs and lifting weights can not only stave off a lot of problems, it can reverse a lot of problems, there's plenty of research on this.  

Another benchmark builds from above which is to have already done some work to figure out what you'd do if your hand was forced and your job was gone. I am guessing most people don't expect this to happen to them but the visibility, based on top down stats, is quite high. Starting from scratch after you lost your job is not a good way to go. In the world of preventing/solving your own problem, being able to take something up right away if you had to is some pretty robust planning. 

Maybe not a benchmark so much but I think 50 is close enough to when most people retire that it is possible to start framing what your idea of retirement would look like, what would you actually do with your time? If you're relatively healthy you can pretty much do whatever you want to avoid being the stereotype of sitting in a recliner yelling at either Fox News or MSNBC.

One more is to cultivate some sort of post-retirement income stream beyond Social Security and your investment portfolio in case you need it and you would rather not work at some sort of store in your town. At 50, you probably don't need to have this completely dialed in but maybe have a high level understanding of a few different ideas.

Sorry, one more. I think at 50 it is reasonable to have some understanding of how Social Security works and what your benefit is scheduled to be. This includes understanding that benefits are lower when taken early and grow if you wait and how the spousal benefit works. I am not saying everyone should wait to take it, I'm saying to understand how that works and what the dollars and cents are to make an informed decision. 

These things take work but it is your retirement. It is up to us first and foremost to determine our outcomes because no one will care more about your retirement than you.

And finally, something clicked regarding the HSA update I posted recently. The very short version is that for the first time in several years an HSA through the marketplace makes economic sense for us for 2024. The contribution limits creep upward in most years, for 2024 the limit is $4150 x 2 plus the $1000 catchup for my being older than 55 for a total of $9300.

The way things are now, no expectation this will change, once you go on Medicare you can't contribute to an HSA anymore. The thing that clicked is that I am six years older than my wife. She will need health insurance of course and she can get an HSA eligible plan if it still makes economic sense and keep contributing to the HSA account. In 2024 dollars, she could put in $4150 plus the $1000 catchup for an additional $30,900 potentially over six years. I don't know why that never clicked before but there you go.