How Much Money Should You Have Saved For Retirement By 40?

At some point or another, you’ve probably asked yourself, “how much money should I have saved by 40?”

It’s a valid question that can be daunting to think about. The good news is you’re probably already saving money for retirement. The bad news is, you might not be saving enough money to retire when you want.

There are different ways to save money for retirement. The sooner, the better—so that it can start adding up. And that’s exactly what an increasing number of people in their 20s and 30s have been doing.

A Bank of America report found that almost one in four millennials (ages 24-41) have $100,000 or more saved as of winter 2020—a nearly 17% increase compared to that same report in 2015. The rising numbers are promising, but are these savings even enough? We’ll dig deeper into the numbers.

How Much Should I Have Saved by 40?

A general rule of thumb is to have the equivalent of your annual salary saved by the time you’re 30. By your 40s, many financial advisors recommend having two to three times your annual salary saved in retirement money.

In your 50s, conventional wisdom holds that you should have six times your annual salary in your retirement savings by the end of the decade.

How Can I Get My Retirement Money On Track?

If you feel you don’t have enough money saved yet, it’s never too late to get back on track. As you reach your 40s, it’s likely that your income increases, but so do the obligations tied to your money.

You might be saving money for your kids’ college; you probably have mortgage payments and existing debt; you may even be taking care of aging parents. It’s a lot of financial multi-tasking and you have to prioritize.

The key is to establish money goals and create a budget. Tracking your income and spending can help you figure out how much money you need to save for each goal and what kind of investments or savings make sense to achieve your goals.

This can be made much easier by using SoFi Relay to know where you stand with your money, what you spend, and how to hit your financial goals. With SoFi Relay you can track all of your money in one place, plus get credit score monitoring, spending breakdowns, financial insights, and more.

A key priority to think over is paying off any high-interest debt, including credit card debt. Be sure to make the payments on any existing loans to avoid any late fees or penalties for missed payments. It may be worth reviewing any loans you currently hold to see if you could potentially refinance to a lower interest rate.

If you don’t have an emergency money fund yet, consider putting that at the top of your priority list. You could plan to have three to six months’ worth of expenses saved.

Once you have high-interest debt paid off and an emergency money saved, you can allot a larger portion of your funds to save for retirement and other money goals. If you’re playing catch-up with your retirement money, try contributing any financial windfalls toward your retirement savings.

Saving and Investing Money by 40

If you already have a 401(k), there are a number of strategies to max out your 401(k) that are worth looking into. For example, it might make sense to contribute at least enough to qualify for any employer matching your company offers. Why lose out on the “free” money that your employer is willing to contribute to your retirement savings?

Try setting monthly or weekly savings targets to help you stay on track for retirement. You can even set up automatic transfers or deposits, so you don’t have to think about it.

As you’re rethinking how much money you need to save for retirement, it also makes sense to look at your lifestyle goals. That includes figuring out when you might want to retire, what kind of lifestyle you want in retirement, and how much money you might have coming in during retirement.

Where to Save Money for Retirement

Next, you’ll also need to figure out which retirement plan is right for you. There are many ways to save for retirement, even beyond the popular employer-sponsored 401(k). Other options include a traditional IRA or a Roth IRA (to see how much you can contribute to a Roth IRA, check out our Roth Contribution Calculator).

Some people choose to put their retirement savings in more than one type of account. This is useful if you want to set aside more than the yearly contribution limits on 401(k) plans—whether because you’re a high-income earner, or you started saving later in life, or you’re trying to achieve financial independence at a younger age. In that case, it might make sense to leverage a Traditional IRA, Roth IRA, or after-tax account to save beyond the 401(k) limits.

Investing in a Roth IRA now, with post-tax dollars, can also be useful if you want to withdraw money in retirement without paying taxes on the money. In contrast, 401(k) contributions are tax-deferred, meaning you will be taxed on funds you withdraw in retirement. That said, there are income limits on Roth IRAs, so this might not be an option depending on your salary.

After-tax accounts can be appealing to individuals who plan to achieve financial independence at a younger age and retire early. Unlike qualified plans, which place penalties on withdrawing funds before a certain age, an after-tax account is a pool of money that you can withdraw from without having to worry about penalties if you access the account before age 59 ½.

The Takeaway

While there are conventional rules of thumb as to how much money you should have saved by 40, the truth is everyone’s path to a comfortable retirement looks different. One piece of advice is universal, however: The sooner you start saving for retirement, the better your chances of being in a financially desirable position later in life.

Interested in boosting your retirement savings? You can open a Traditional IRA, Roth IRA, or after-tax account with SoFi Invest® to supplement your 401(k) or other qualified retirement plan savings.

Find out how SoFi Invest can help you start saving for your future.



SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . The umbrella term “SoFi Invest” refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC Registered Investment Advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).

2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.

3) Digital Assets—The Digital Assets platform is owned by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.

For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, http://www.sofi.com/legal.

External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Source: sofi.com

What is Dash Cryptocurrency?

Cryptocurrency can sometimes be confusing to beginners because there are so many different cryptocurrency types with different purposes. Some cryptocurrencies are designed to act as fast digital cash, others as private digital cash, some as interest-bearing assets, others as cross-currency exchanges, and more. (Beginners can check out our comprehensive crypto guide for more details.)

Bitcoin is widely known as the premier cryptocurrency in large part because it was the first, yet altcoins such as Dash take existing intuitive technology and make other improvements upon it separately. Some of Bitcoin’s biggest flaws are precisely Dash’s strengths—including transaction speeds, fees, and privacy.

What is Dash?

Bitcoin fork, a split in the Bitcoin blockchain initiated by a group of Bitcoin miners with different views on certain network rules. Darkcoin was originally designed to uncompromisingly ensure user privacy and anonymity, as described in its 2014 whitepaper .

However, the next year the project was redesigned with other features in mind and rebranded as “Dash,” a mash-up of the phrase “digital cash.” As the name implies, the Dash coin is intended as a medium of exchange and has since shifted its primary focus to faster and less expensive transactions while maintaining its strong encryption properties. Since the 2015 rebranding, Dash has grown to become a popular altcoin for investors buying crypto and consistently ranks among the top 25 cryptocurrencies by market cap.

How Does Dash Work?

Similar to Ethereum’s ambitions, Dash uses a modification of the Proof of Stake algorithm known as X11. Proof of Stake is an alternative consensus mechanism to Bitcoin’s Proof of Work that replaces energy-intensive cryptocurrency miners with validators that verify transactions based on how many tokens they hold and stake on the network. In addition to confirming blocks, they also provide payment and privacy services on the network.

This model is viewed as less risky because it makes a potential network attack less rewarding than compensation for validating transactions which secure the network. Dash validators, or “Masternodes,” are full nodes that hold a minimum stake (or bond of collateral) of 1,000 DASH coins that perform network services and earn a return on their staked investment. Masternode services include private transactions (PrivateSend), Instant transactions (InstantSend), and the network’s governance and treasury systems. Dash’s model also addresses transaction scalability issues by reducing the amount of nodes required to approve a transaction to a manageable number.

Dash maintains a harmonious self-funding governance model by splitting block rewards between three critical stakeholders: Masternodes (45%), Miners (45%), and Treasury (10%). The first two are rewarded the bulk of block rewards for providing essential services and voting on development directions for the network, while the remaining 10% accrues to the Treasury to actually finance the voted-on future project developments.

What is Dash Used For?

Dash is intended to be used for daily transactions between peers. While Dash’s use is scattered, it is more concentrated in a few economically-distressed countries that are experimenting with cryptocurrencies.

Following the hyperinflation of the Venezuelan Bolivar, the South American country’s government passed an order instructing state-run agencies to accept any cryptocurrency for services. Dash has gained early momentum in the country after a series of popular conferences and educational efforts were made introducing crypto to the community as a replacement for devalued and unreliable local currency. Since then, acceptance of Dash in Venezuela has grown as thousands of merchants in the country, including Burger King, have enabled payments using Dash among other cryptos.

Dash adoption and use has spread in Latin America, also spurring bouts of growth in Brazil and interest from nearby Cabimas and Mexico, other countries with distressed economies and weak currencies. This comes as a result of local advocacy programs and merchant point-of-sale terminals integrating with Dash.

Is Dash Better than Bitcoin?

Some people prefer Dash for its fast speed, lower fees, and increased privacy. These properties give Dash technical advantages over Bitcoin’s current abilities as a medium of exchange.

Faster Speeds

One of the drawbacks to using a layer-one cryptocurrency network is that some network efficiency is sacrificed for decentralization. Many cryptocurrencies, like Bitcoin, still operate on the project’s original iteration which is designed for functionality now and scalability later. This affects the network’s speed, particularly the rate at which funds are transferred, confirmed, and received in recipients’ accounts. Bitcoin is the model for slow transaction times, sometimes taking hours for a transaction to be confirmed, especially during market congestion.

With Dash, most transactions are confirmed in seconds. As the name implies, Dash coins are meant to be used as a medium of exchange. Dash’s average block time is roughly two and a half minutes per transaction; nearly four times faster transactions than Bitcoin’s 10-minute block time. Dash users are free to send and receive transactions normally for a miniscule fee. Alternatively, Dash also instituted the InstantSend feature which allows masternodes to confirm transactions nearly instantly for an extra fee. With nearly instant transaction confirmations, Dash is among the fastest and most private cryptocurrency mediums of exchange, surpassing that of Bitcoin, Ethereum, Litecoin, and XRP.

There are other cryptocurrencies that also provide fast transaction confirmations like Dash, however only some of them lock down transactions after they are completed, thus disabling the same funds from being spent on two separate transactions. Networks that do not lock down confirmed transactions are technically vulnerable to a compromising phenomenon known as double spending. Double spending is a potential technical flaw in a digital currency network where the same single asset is spent more than once. InstantSend also solves the double spending issue by holding the amount of funds sent without having to wait for a block confirmation to officially confirm the transaction.

Lower Fees

In addition to faster block times, Dash transactions typically cost less than $0.01. Dash’s faster speeds and lower fees make it a far more efficient medium of exchange than cryptocurrencies like Bitcoin.

Privacy

One of the concerns with Bitcoin, according to privacy advocates, is its public ledger. All transactions and details on the Bitcoin blockchain such as sender, recipient, date, amount, and even previous Bitcoin addresses and transactions associated with each Bitcoin are publicly viewable by anyone and cannot be censored, modified, or deleted. While this creates a system of pseudo-honesty and transparency, users seeking privacy must look elsewhere.

Dash offers users a service known as “PrivateSend,” a layer of privacy and anonymity provided by Masternodes through a process known as automatic coinjoin mixing. Coinjoin mixing is a trustless privacy method that repackages multiple payments from multiple senders into a single transaction to obfuscate transaction details from outside parties.

Anonymizing Dash cryptocurrency transactions prevents them from being traced and users’ identities from being revealed, thus potentially providing an opportunity for users seeking to avoid paying taxes on crypto. Dash’s anonymizing privacy features are revered by users but scrutinized by regulators and centralized exchanges who must abide by strict cryptocurrency regulations.

Dash Crypto: Pros and Cons

When it comes to crypto, pros and cons can vary depending on what a user intends to do with the currency—whether interest-bearing assets or fast digital cash, for example.

Beyond the specific advantages Dash has over Bitcoin (outlined above), this cryptocurrency has pros and cons any potential user should be aware of.

Pros

•  Widely Accessible: Dash is available to buy or sell on most crypto exchanges in most countries with few exceptions. Being that Dash is a relatively larger-cap token, it is fairly ubiquitous—except for exchanges unfriendly to privacy-centric cryptocurrencies.
•  Efficient medium of exchange: Faster transaction speeds and cheaper fees make Dash a top-performing medium of exchange, especially when compared to wait times and fees experienced by users of marquee tokens like Bitcoin and Ethereum.
•  Private and anonymous: Darkcoin’s original privacy properties were maintained in Dash, autonomously obscuring transactions’ origins, senders, and other details by grouping transactions together to morph into a single new transaction with no similarities to the original senders.
•  Validators can stake DASH coins to earn passive block rewards: Validators, or nodes, attribute personally-owned DASH as part of the consensus mechanism to receive monetary compensation for providing crucial services to process transactions and secure the network.

Cons

•  Not as ubiquitous as mega-cap cryptos (e.g. Bitcoin, Ethereum): Whereas crypto is synonymous with Bitcoin and sometimes Ethereum, Dash doesn’t have the same caliber network effect and is not widely known by the average investor.
•  Masternodes are slightly more centralized than other cryptos: Owning and running a masternode requires staking 1,000 DASH, and there are currently more than 5,000 masternodes. However, it’s difficult to determine whether some people have multiple masternodes and thus centrally control a larger percentage of the network.
•  No academic or institution backing: Dash is entirely self-funded through its technical design and does not rely on nor receive support from prominent academics or institutions for advisement, technical support, or funding.
•  Strong competition (Bitcoin Cash, Litecoin, Monero, etc.): Currencies have been battling for the title of reserve currency for hundreds of years. The medium of exchange use case is saturated to say the least, and of the thousands of cryptocurrencies (and growing), Dash has to compete with other functional and efficient use cases with similar properties such as Bitcoin Cash, Litecoin, and others.

How Do You Invest in Dash?

6 things to know before investing in crypto.

The Takeaway

As cryptocurrency evolves, new projects are conceived and even spawn off of other projects in what’s known as a “fork.” One such fork is Dash, a 2015 offshoot of Bitcoin with many similarities but distinct improvements in critical areas that define money’s essence. Bitcoin historically dominates the crypto market share despite technical limitations, whereas projects like Dash have a smaller network effect and thus market cap despite superior real-world utility.

Regardless of your crypto project of choice, the vast number of cryptocurrency projects and tokens are showing a rapidly growing and maturing space that has already caused ripples in the investing world. As cryptocurrencies like Dash continue to become more mainstream, investors may look to capitalize on this new industry’s growth and adoption.

For investors looking to dip their toes in cryptocurrency investing without the responsibility of self-custodying their funds, SoFi Invest® helps beginners get started and learn along the way. Members can invest in Bitcoin, Ethereum, Litecoin, Bitcoin Cash, and Ethereum Classic.

Find out how to invest in cryptocurrency with SoFi Invest.


SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . The umbrella term “SoFi Invest” refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC Registered Investment Advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).

2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.

3) Digital Assets—The Digital Assets platform is owned by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.

For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, http://www.sofi.com/legal.

Third Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.
External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments.

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Source: sofi.com