How much money should a married couple have saved up?

Question

I have heard that you should have half of your net income saved up and put away as a nestegg. Is this true? Should we shoot for more or just get to half of our income and then start putting more money towards our mortgage, etc.?

Answer 1

I would put more towards the mortgage right now. It is more effective to pay off your mortgage early in case one of you dies early. That way you have some savings and no house note.

Then when the mortgage is paid off you will put the extra mortgage money into your savings and save even more.

Never stop at half though. You don't know how far inflation will take you by the time you retire. YOu cannot predict inflation or taxes, and both are on the rise right now. Expect it to remain that way until you retire. Pay off the mortgage then focus on dumping the extra cash into your savings as your nest egg. The theory behind this is that the interest you pay out on your mortgage is always more than the interest you gain in your savings. If you cut out the higher interest going out then focus on the lower interest coming in then you are paying yourself more.

Good Luck, hope this helps.