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Here’s How Much You Should Have Saved For Retirement At Every Age

Here’s How Much You Should Have Saved for Retirement at Every Age

Let’s face it: Saving money is hard. When you’re young, you tell yourself you’ll start saving once you start earning more. Then when that happens, you may have a mortgage or kids or other expenses that make it harder to save. Then all of a sudden you’re ready to retire and have little to no money in your retirement fund.

If that sounds like you, you’re not alone. According to a study by the Economic Policy Institute (EPI), the median amount saved by working-age families (defined by the EPI as those aged 32 to 61) is just $5,000. Even for people nearing retirement age (56 to 61 years old), the median savings is a mere $17,000.

retirement jar full of coins next to an alarm clock
Image source: Getty Images

Needless to say, most people are falling behind on saving for retirement. But how much should you have saved at each age to be on track to retire?

The track to retirement

First of all, it’s important to note that there’s no single savings number that everyone should strive for. In addition, the amount of savings you’ll need in retirement will depend on a variety of factors, such as the age at which you plan to retire, the kind of lifestyle you want to lead, and how long you expect to live (not a cheery thought, but an important one).

That said, a recent report by Fidelity lays out a simple path to a financially secure retirement, complete with savings targets you’ll need to reach along the way. Fidelity’s figures are based on a number of assumptions, so your goals may differ based on your situation. For example, Fidelity assumes you’ll retire at age 67 and need income until age 92. They also assume that your savings will provide 45% of your annual pre-retirement income and that between those savings and your Social Security benefits, you’ll be able to maintain your current lifestyle. Finally, Fidelity assumes that more than 50% of your retirement portfolio will be invested in stocks, which have historically returned about 7% per year, though future performance will vary.

Bearing in mind that your retirement plan should be tailored to your financial situation and your goals, Fidelity’s simple retirement roadmap should give you an idea of whether you’re in the ballpark.

By age 30

Although it’s tough to start saving in your 20s, it’s crucial, because it allows you to take advantage of compound interest. At this age, you’re probably just starting your career and opening a 401(k) or IRA, and you need to start using them immediately.

By the time you reach your 30s, you should try to have the equivalent of your annual salary saved for retirement. So if you earn $45,000 per year, that’s how much you should have saved. That money can come from different places, too, and it includes any matching employer contributions, the interest you’ve earned in savings accounts, or whatever extra cash you have saved here and there.

You can reach this goal by saving…

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