May 16, 2026
Nicole and Shane thought they were doing almost everything right.
The East Coast couple (ages 40 and 48) had a combined household income of roughly $241,000, nearly $600,000 in net worth and more than $265,000 sitting in savings accounts. They tracked spending meticulously, saved aggressively and were projected to retire with about $1.7 million by age 65.
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Then they ran the numbers with financial expert Ramit Sethi. That's when they realized that even $1.7 million might not support the lifestyle they wanted.
"It's not enough," Nicole said during a recent episode of Sethi's I Will Teach You To Be Rich podcast (1), after learning the couple's projected retirement income would likely translate to roughly $130,000 annually when combined with Social Security.
The wake-up call wasn't about their spending on $500 dresses or luxury travel. According to Sethi, the biggest mistake was much simpler: they were holding far too much cash instead of investing it.
"They have hundreds of thousands of dollars sitting in savings accounts," Sethi said. "That money now is going to be very, very powerful down the road."
The one move they missed: investing earlier and more aggressively
Despite earning strong incomes and saving heavily, Nicole and Shane had allowed too much money to sit in low-yield savings accounts rather than compound in the market. At one point, the couple had more cash savings than retirement investments, even while worrying about affording private school tuition, a future home and retirement.
Sethi showed them how costly that decision could become. When they adjusted their projections to invest more aggressively, their projected retirement nest egg rose from roughly $2.1 million to over $3 million simply by extending the timeline and increasing investments.
That's the power of compounding, and financial experts say many Americans underestimate how much time matters.
According to Vanguard's 2025 "How America Saves" report (2), the average retirement contribution rate is about 12%, but many households still keep large amounts of cash on the sidelines instead of investing consistently. Fidelity also notes that Gen X households have average 401(k) balances of roughly $192,300, often far below what's needed for a long retirement (3).
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Holding too much cash can quietly erode long-term wealth. Fidelity warns that while cash feels "safe," it historically produces far lower long-term returns than stocks and bonds and can leave investors short of retirement goals because they miss years of compound growth.
The good news for Nicole and Shane: Sethi stressed it's "not too late" because they still have strong incomes, decades before retirement and significant savings they can reallocate into investments now.
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Millions of Americans are facing the same problem
Nicole and Shane's situation may sound privileged, but financial anxiety around retirement is widespread, even among higher earners.
A 2025 Bankrate survey found that 58% of American workers believe they are behind on retirement savings (4). Meanwhile, a recent Guardian survey found only 13% of workers feel fully on track to save enough for the retirement lifestyle they want (5).
Even households approaching retirement often haven't accumulated as much as expected. According to Vanguard data, Americans ages 45 to 54 have average retirement savings of about $168,646, and median balances are much lower (6).
Sethi's broader lesson for viewers wasn't necessarily to stop spending on travel or small luxuries. Instead, he argued that many people focus too heavily on tracking tiny expenses while ignoring bigger questions like whether their investments are actually growing fast enough to support their long-term goals.
For Nicole and Shane, the solution wasn't cutting out coffee or canceling date nights. It was finally putting their money to work.
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
YouTube (1); Vanguard (2),(6); Fidelity (3); Bankrate (4); Guardian (5)
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Clay Halton is an associate editor at Money.ca, covering a wide range of consumer-focused financial stories. He has over eight years of experience in digital publishing and has written and edited for outlets including PCMag and Investopedia.
