Here’s one of the ways she wrote about:
“1. By age 40, you’ve accumulated 1 to 3 times your annual income.
Many financial advisers use age-based targets for determining how much workers should save to be ready to retire. Fidelity Investments, for example, released a set of guidelines last year that said employees should have the equivalent of their annual salary in savings by age 35 in order to reach the first benchmark on the way to the retirement finish line.
Erin Baehr, a CFP in Stroudsburg, Pa., ascribes to similar guidelines. According to a strategy recommended by the Alliance of Cambridge Advisors, a group of fee-only financial planners of which Baehr is a member, someone between 30 and 40 is in the “early accumulation phase” and their net worth should be 1 to 3 times their annual income.
At that point, “you’ve most likely bought your first house, you’ve got good savings habits, you’re minimizing consumer debt. You’re at the point in your career where you’re able to accumulate savings,” says Baehr. When you get to three times your income, you’re in the rapid accumulation phase. (Note that net worth here includes equity in your house.)”