Retirement Savings by Age: Are You on Track?
One of the most common financial questions is "Am I saving enough for retirement?" While there's no single right answer — everyone's situation is different — having benchmarks to measure against can help you gauge whether you're on track and what adjustments might be needed.
General Benchmarks by Age
Several major financial institutions publish retirement savings guidelines based on multiples of your annual salary. While these are rough guidelines and not precise targets, they provide a useful framework.
By Age 30: 1x Your Annual Salary Saved
If you earn $50,000, aim to have $50,000 saved for retirement by 30. This is ambitious for many people — especially those who started saving later or carry student loan debt. If you're behind, don't panic. You have decades of earning and compounding ahead of you.
By Age 35: 2x Your Annual Salary
The jump from 1x to 2x in five years reflects both continued contributions and the power of investment growth. This is typically when careers accelerate and saving capacity increases.
By Age 40: 3x Your Annual Salary
By 40, compounding is doing meaningful work. If you've been investing consistently in index funds or diversified funds, your investment gains may be contributing as much as your annual contributions.
By Age 45: 4x Your Annual Salary
This is the midpoint. If you're significantly behind at this stage, consider increasing your savings rate, delaying retirement by a year or two, or both. Small changes now still have 20+ years to compound.
By Age 50: 6x Your Annual Salary
The pace accelerates due to compounding. At 50, you also become eligible for catch-up contributions to your 401(k) and IRA — take advantage of these higher limits.
By Age 55: 7x Your Annual Salary
You're in the home stretch. If you're on track, maintain your savings rate and start thinking about retirement income planning. If you're behind, catching up requires aggressive saving and possibly working a few extra years.
By Age 60: 8x Your Annual Salary
As you approach retirement, your investment mix should gradually shift toward more conservative allocations to protect against market downturns in the years just before and after retirement.
By Age 67: 10x Your Annual Salary
This is the often-cited target for a comfortable retirement at 67 — enough to replace roughly 70–80% of pre-retirement income when combined with Social Security.
What If You're Behind?
First, don't let being behind discourage you from saving at all. The best time to start was years ago; the second-best time is today. Here's how to catch up:
- Increase your savings rate. Even 1–2% more of your income makes a difference over time.
- Maximize employer matches. If your employer offers a 401(k) match, contribute at least enough to get the full match — it's an immediate 50–100% return on your money.
- Use catch-up contributions. After 50, you can contribute extra to 401(k)s and IRAs above the standard limits.
- Reduce expenses. Our 50 money-saving tips can free up cash to redirect to retirement.
- Consider working longer. Every additional year you work means one more year of saving, one more year of compounding, and one fewer year of retirement to fund.
How to Calculate Your Number
A more personalized approach: estimate your annual retirement expenses, multiply by 25 (based on the 4% withdrawal rule), and that's your target nest egg. For example, if you expect to need $60,000 per year in retirement, you'd need $1.5 million saved.
Factor in Social Security benefits, any pension income, and expected changes in expenses (no mortgage, lower taxes, but potentially higher healthcare costs).
The Power of Starting Early
Someone who invests $200 per month starting at age 25, earning an average 7% annual return, would have roughly $525,000 by age 65. Waiting until 35 to start — investing the same amount — yields roughly $245,000. The ten-year head start nearly doubles the result, thanks to compounding.
If you haven't started yet, learn how in our investing for beginners guide. Starting today, with whatever you can afford, is the most impactful financial decision you can make.
Retirement planning isn't about perfection — it's about progress. Know your benchmarks, close the gap where you can, and let time work in your favor. Build a solid budget that prioritizes your future self alongside your present needs.
