Home Personal Finance I’m 47 with no retirement and an expert said I need to follow the ‘x25’ rule to save enough so I can retire on time

I’m 47 with no retirement and an expert said I need to follow the ‘x25’ rule to save enough so I can retire on time

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A 47-YEAR-OLD with no retirement savings has learned the exact rule he must follow to retire by 65.

A financial planner laid it all out in simple terms, explaining the “x25” method to save enough.

The x25 rule can help you save for retirement, no matter how late you startCredit: Getty

Allison Baggerly is a budget coach who helps her followers on TikTok (@inspiredbudget) save money and plan for retirement.

In a recent video, she told one couple exactly what they would have to do to retire at 65.

The couple had decided that they wanted a retirement income of $70,000 a year.

The wife was a teacher, so she would receive a pension of $40,000 a year.

That left a $30,000 gap that needed to be filled with investments in a 401k or an IRA.

However, the husband had nothing saved for retirement aged 47.


Allison explained that the “25x” rule would tell him how much he needed to save to make up this $30,000-a-year shortfall in retirement.

Under the rule, you take the amount you want to withdraw every year and multiply it by 25.

Doing the math – 30,000 x 25 – Allison figured out that the husband needed a total of $750,000 by the time he retired.

As he was starting from scratching at 47, he would have to save aggressively to build that nest egg.

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With compound interest working in his favor, the husband would need to invest $1,850 a month at a 7% interest rate for the next 18 years.

That would leave him with a final amount of $754,778, from which he could comfortably withdraw $30,000 a year.


The husband would have had a much easier time if he had started saving and investing earlier.

“The biggest takeaway here is that time equals growth when it comes to growing your money in the stock market,” said Allison.

Fortunately for this couple, they had no debt, so they could focus all their attention on building their retirement fund.

But they were also still working on building an emergency fund of three to six months of living expenses, as advised by other financial gurus like Dave Ramsey.

See how your car payments and credit card debts could be holding you back from retirement.

And find out the answer to 13 important Social Security questions that can stop you from making “tragic mistakes.”

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