I’m starting to contribute 800 a month to my savings. I invest in a etf that tracks the S&P and I have a government pension.
But I’m anxious if it’ll be enough to retire at 65. I see people here 30 and under way ahead and wonder if I’ll have to work the rest of my life.
Here’s the truth: starting late doesn’t mean you’re doomed—it just means the math looks different. Let’s break it down.
You’re 40, and you have $50,000 saved. You’re contributing $800/month ($9,600/year), investing in an ETF tracking the S&P 500, and you have a government pension. That’s a solid foundation.
The Math
If your investments grow at an average of 7% annually (a reasonable long-term expectation for the market), here’s what your savings could look like by 65:
- $50,000 grows to $271,000.
- Adding $800/month for 25 years, that’s another $815,000.
Combined, you’re looking at $1.086 million by 65—without factoring in your pension.
The Pension
Your government pension could be a game-changer. If it pays even a modest amount monthly, it’s essentially guaranteed income for life. This means your investments don’t have to cover 100% of your retirement expenses, which is a huge advantage.
Will It Be Enough?
This depends on two key numbers:
- How much you plan to spend in retirement.
- Take your monthly expenses today, subtract costs that’ll disappear (like commuting), and adjust for inflation.
- How much your pension will cover.
For example, if your expenses are $4,000/month and your pension covers $2,500, you’d only need to draw $1,500/month from your investments, which becomes very manageable.
The Real Question: What’s Next?
Instead of comparing yourself to others (they aren’t you, and they probably aren’t sharing their real numbers), focus on what you can control:
- Increase your contributions. Can you bump that $800 to $1,000 or more? Even an extra $100/month adds tens of thousands over 25 years.
- Maximize your pension. Check your eligibility to optimize payouts—delaying retirement or increasing contributions could make a big difference.
- Plan to work longer if needed. Even part-time work for a few years after 65 can drastically reduce how much you need to withdraw from your investments early on.
Perspective
The key isn’t to panic but to focus on what you can do. You’ve started investing, you’ve got a pension, and you’re contributing regularly. Those are huge wins. Keep going, stay consistent, and remember: retirement isn’t about hitting an arbitrary number, it’s about designing a lifestyle that works for you.
Don’t let anxiety about others’ progress derail you—just focus on your plan.