Am I Cooked?

Paul R. Ruedi, CFP®

I am always on the hunt for ideas for these columns, and some of my best ideas come from finance and retirement forums on reddit. Lately I’ve been noticing several posts with the same features pop up: a retirement account balance, current age, desired retirement age, and the question, “am I cooked?” 

I’ll admit, in my late 30s I feel I am too old to use “am I cooked” as slang for “am I done for?” This shows that there is a relatively young group of people concerned if they will be able to retire at a reasonable age. The good news is, they are usually less cooked than they think.

For example, I saw a post from someone who said she was 35 years old and wanted to retire at age 70. But she only had $13,000 in her 401(k) and was feeling very behind. Sure, she may be behind some of her wealthier peers, or perhaps even behind where she imagined she’d be. But with 35 years to save and invest, she is by no means cooked. 

So let’s assume she starts with her $13,000 in her 401(k) and invests it in a 100% stock portfolio that grows at an inflation-adjusted 7% compounded monthly (this is close to the historical average return of the S&P 500 index minus 3% to account for inflation). She would need to invest $472.18 at the end of each month to accumulate a million dollars in today’s dollars by retirement at age 70. Using the 4% rule to keep the math simple, that portfolio can produce $40,000 per year in retirement spending that can be adjusted for inflation every year.

She could then add the expected annual withdrawal from her retirement account to an estimate of her Social Security Benefit. According to the Social Security Administration's 2025 Annual Statistical Supplement, the average benefit for a woman age 70 who delayed past full retirement age was $2,689.67 per month or $32,276.04 per year. That $32,276.04 plus $40,000 in portfolio withdrawals results in annual spending higher than the median income of $57,520 for women employed full-time, year-round in the US, according to the Census Bureau's Income in the United States: 2024 report.

If you are young and feel like you are behind on your savings, you likely aren’t cooked. But you may need to consider increasing your savings now and giving your investments time to grow. If you need help figuring out exactly how much you would need to save to retire at your preferred age, you may want to talk to a retirement planner.

Paul R. Ruedi is a Certified Financial Planner™ professional with Ruedi Wealth Management in Champaign, Illinois.