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A Guide to Retirement Savings by Age: 20s, 30s, 40s, 50s, & 60s

How much should I have saved for retirement at my age? Get some helpful benchmarks for your retirement savings plan with this guide.

Patrick Hicks

Patrick Hicks, @PatrickHicks

Head of Legal, Trust & Will

Retirement planning is the process of setting savings goals, as well as taking actions to meet those goals, so that we can live our desired lifestyle when we retire. 

Most of us are aware that we should be saving for retirement, but exactly how much should we be saving? What are the benchmarks should we be hitting as we age? Look no further. This guide will break down retirement savings by age so you can be sure that you’re hitting important retirement planning benchmarks in your 20s, 30s, 40s, 50s, and 60s.

How much should I have saved for retirement?

The amount that you should have saved for retirement largely depends on the stage of life you are in, as well as your retirement savings goal. 

For instance, the savings benchmark for someone in their 30s is vastly different from that of someone in their 50s. Further, that benchmark can vary for 30-somethings based on the lifestyles they wish to maintain in retirement. 

Before you can identify the savings benchmark based on your age, you’ll want to determine your total retirement savings target. (How much money you want to have saved up by the time you retire.) 

Some financial advisors recommend a general savings target of $1 million. However, this is a one-size-fits-all solution for a situation that is anything but. Every retiree has different expenses and lifestyles to maintain and thus require individual savings goals. Therefore, we recommend using the Rule of 25 instead. 

Calculate your retirement savings goal: the rule of 25

To calculate your retirement savings target, first create an estimate of your monthly expenses. Let’s say that you think you can comfortably live off of $3,000 per month. Then, multiply this number by 12 to find your annual withdrawal amount. In your case, you would withdraw $36,000 from your retirement savings per year. Next, take your annual withdrawal amount and multiply it by 25 to find your retirement savings target of $900,000. 

This is how much you want to save so that you can withdraw $36,000 per year during retirement without having the fear of funds running out before you pass away.

This example highlights how not everyone needs to save $1 million. If you take social security benefits and other income streams into account, you won’t need to save as much. However, other individuals may find that they need to save much more if they wish to live a lavish lifestyle. Therefore, the Rule of 25 is a great method of finding your unique retirement savings target.

Next, we dive into the different stages of retirement planning, along with examples of benchmarks you’ll want to hit in each life stage.

Stages of retirement planning by age

Let’s circle back to our original question: how much should you have saved up for retirement, for someone your age? While you’ll want to seek out personalized advice based on your unique financial goals, you can still compare yourself to other savers in your age group. This will help you get a sense of whether you’re generally on track, or have some catching up to do.

20s

When we first embark into adulthood, we often don’t have a ton of free change to invest. However, the longer you have to allow your investments to grow, the easier time you’ll have saving up for retirement. By starting early, you can contribute much smaller amounts over time instead of having to play aggressive catch-up later in life. Even if you can only spare $25 per month, thanks to compound interest, those savings will grow three times more investing it in your 20s than if you wait until your 40s.

On average, Americans in their 20s have saved $10,500 toward retirement. Here are 3 retirement planning steps to consider in this age range:

  • Build up your emergency fund first. Unexpected expenses can arise, and having an emergency fund can help you avoid depleting your retirement savings.

  • Start contributing to your company’s 401(k) plan. If your employer offers contribution-matching, make sure you meet the contribution  minimums to qualify.

  • Fidelity Investments recommends contributing 15% of your pre-tax income to your retirement account if you can.

30s

Your 30s are a period of immense growth. You may have found some career stability, increased your status at work, and perhaps have increased your income. However, you’ll also have more expenses. You may be entering partnerships, having children, and getting ready to buy a home. On top of that, you’re likely still paying off student loan debt. This is likely a time when you’re tempted to put your retirement planning on the backburner, when in reality, this is when you should start ramping up your savings.

On average, Americans in their 30s have saved $38,400 toward retirement. Here are 3 retirement planning steps to consider in this age range:

  • It’s recommended that you have saved up the equivalent of your annual salary by your 30s.

  • Include 18 to 23 percent of your pre-tax income to your retirement account if you are beginning to save for retirement in your 30s. (You’ll realize that this is a significant amount and underlines why you should start in your 20s when possible.)

  • Based on your age, you can afford to make some bold investments since you’ll have plenty of time to absorb market fluctuations and recover. 

40s

A person often gets to begin experiencing the rewards of their hard work and diligence when they reach their 40s. Their career is likely approaching its peak, they’ve built up a good amount of savings, and perhaps they have finally paid off their student loans.

At the same time, however, they likely have other large expenses. Perhaps you’re paying for a mortgage while also getting ready to send your child or children off to college. By now, you’ve learned that life brings about an unending cycle of different types of expenses. However, you’ve hopefully achieved some stability and learned how to control your cash flow so that you can live comfortably.

On average, Americans in their 40s have saved $93,400 toward retirement. Here are 3 retirement planning steps to consider in this age range:

  • By age 40, you should have three times your annual salary already saved.

  • Max out your 401(k) if you are behind schedule. Also consider opening a separate Individual Retirement Account (IRA) and max it out as well. (The annual contribution limit is currently $6,000.)

  • Any time you receive a salary increase or cash windfall, consider boosting your retirement contributions. 

50s

Once you enter your 50s, it’s time to put your retirement preparation on full steam ahead. Most Americans are far behind on meeting their savings targets. This is understandable. Not only is the cost of living high, we are likely supporting children through college, paying for home repairs, and facing increased medical costs. Do whatever you can to catch up as much as possible.

On average, Americans in their 50s have saved $160,00 toward retirement. Here are 3 retirement planning steps to consider in this age range:

  • By age 50, you should have six times your annual salary already saved.

  • Max out “catch-up” contributions whenever possible.

  • You can start withdrawing from your retirement savings penalty-free at age 59 ½, but put it off and continue saving if you can.

  • Consider working with a financial planner to find out what more you can do. 

60s

When you reach your 60s, it is no longer appropriate to sugar coat things. This should be a time in your life where you can sit back, relax, and reap the rewards of your decades of hard work and dedication. Unfortunately, however, most Americans are nowhere near the recommended savings target by this age (ten times your annual salary) and time is running out.

On average, Americans in their 60s have saved $182,100 toward retirement. Here are 3 retirement planning steps to consider in this age range:

  • Evaluate your non-retirement assets and see what you can monetize in the future.

  • Don’t forget to take advantage of your social security benefits when you turn 62. If you’re still working, you can choose to delay taking your benefits. This can help shrink the deduction of your monthly checks. Alternatively, consider investing your social security money in non-retirement accounts if you feel comfortable doing so.

  • Be sure to factor in the cost of medical care when fine-tuning your retirement income and budget.

Retirement Goals by Age - At a Glance

Below you will find an at-a-glance chart that shows you how much Americans have saved up for retirement on average, organized by age group. It also shows the recommended savings goal by age. 

Age 20-29:

  • Average retirement savings: $10,500

  • Recommended savings goal: N/A

Age 30-39:

  • Average retirement savings: $38,400

  • Recommended savings goal: Equivalent of annual salary

Age 40-49:

  • Average retirement savings: $93,400

  • Recommended savings goal: Three times annual salary

Age 50-59:

  • Average retirement savings: $160,00

  • Recommended savings goal: Six times annual salary

Age 60-69:

  • Average retirement savings: $182,100

  • Recommended savings goal: Ten times annual salary

Make sure your retirement planning is included in your estate plan 

If you are in line with the average retirement savings by age group, congratulations. However, be careful not to stop there. You’ll soon realize that the average American is actually far behind the recommended savings goal. For instance, someone in their 30s should have at least the equivalent of their annual salary saved for retirement. The average retirement savings in this age group is $38,400, while the average salary for young professionals is closer to $50,000. 

If you’re reading this guide, consider this the perfect opportunity to evaluate where you’re at. If you’re behind in your retirement savings based on your age group, consider increasing your monthly retirement contributions. Thanks to compounding interest, any small amount you can put away today can grow to an impressive amount by the time you retire.

While you’re conducting your evaluation, make sure that your retirement planning includes your estate plan. Your Will or Trust should designate what should happen with your hard-earned retirement savings should anything happen to you. Many retirement accounts allow you to designate a beneficiary, meaning that it can pass directly to your spouse or heir outside of the probate process. 

Don’t have an estate plan yet? Don’t worry! A Will is a great place to start. With Trust & Will, you can create your Will online in just 10 minutes. It’s also super affordable.  When you’re done, you’ll have a plan for what should happen to your assets should anything happen. Take our free quiz to see where you should get started, or compare our different estate planning and settlement  options today!

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