Your humble blogger is looking at the encroaching new year with a sense of foreboding: that’s right, readers, I will be turning the corner to thirty years of age this May. I believe that’s around the time in life when most people will wonder aloud how you’re employed as a blogger, but I digress. My knees hurt. It’s dark out. I’m tired.

The late-millennial age group, one toward which so much discussion of personal finance principles has been directed in the last five to ten years (post-2008 recession at least,) is approaching their thirties as well. Just in time to catch the wave of media awareness of this demographic shift, financial editor Jean Chatzky of NBC’s Today Show stirred up significant controversy with a recent tweet.

By the time you’re 30, aim to have 1x your annual income set aside for retirement. At 40, 3x; at 50, 6x; at 60, 8x; and by retirement, 10x.

Needless to say, actual twenty- and thirtysomethings responded to Chatzky with an avalanche of sarcasm and snarky rebuttals – some outright humorous, and some more darkly so.

Many responders pointed out that by the age of thirty, economic pressures (often arising from the cost of education needed to build a stable career) have still left many smart, financially savvy people barely in a position to make ends meet. Chatzky’s supporters have suggested that her formula is based in simple economic sense, while detractors point out that day-to-day realities don’t often match up with textbook solutions.

There’s neither a concrete right or wrong answer as to whether Jean Chatzky’s guidelines are viable or not. The logic behind them is sound, but since they’re based on broad principles, they are by nature broad in application. This means they need to be tweaked – quite a lot – depending on factors like age, debt load, cost of living and average salaries, all of which vary significantly between late-millennial earners and their peers who are one generation older or more.

According to an analysis of American Federal Reserve data published by the advocacy group “Young Invincibles” in early 2017, late-period millennials earn 20 percent less than boomers did at the same stage of life, despite largely being better educated. Savings advice for the younger generation needs to be updated to reflect the changing context in which it is being dispense, lest it begin to feel like a mockery of maturing millennials’ well established financial literacy.

In short, if you’re a younger adult with savings goals in mind, don’t lose your head if you fall short of a metric like the one Chatzky proposes. The establishment  and maintenance of good guidelines and practices is more important than the achievement of a largely arbitrary savings goal: putting these goals together takes a significant degree of self-evaluation and reference to knowledgeable assistance, but once they are in place they will help anyone, at any age, plan for their financial futures with confidence.

Tags : advicebankingfinancefinancial literacyfinancial planningpersonal financestrategy