Savings by Age: How Much You Should Have Saved for Retirement
If you’ve ever wondered how much money you should have saved by different points in your life, you’re not alone. Most people have a hard time knowing where they stand financially and what they should aim for as they get older. In this post, I’m going to break down a straightforward rule of thumb for how much you should have saved by certain ages, based on your salary. This simple guideline can help you benchmark your progress, stay motivated, and ultimately build a solid financial foundation for your retirement.
You’ve probably heard the stats before, but they’re worth repeating because they’re pretty shocking. Nearly 70% of American adults have less than $1,000 saved. Think about it: a single unexpected expense—like a car repair or a medical bill—can wipe out that tiny emergency fund in a flash. And it gets worse when you look at retirement savings.
About half of U.S. families have zero dollars saved for retirement. That means millions of people are heading into their golden years with no nest egg at all. The scary part? Relying solely on Social Security or government programs might not be enough—and there’s no guarantee those will be around when you retire. Without proper savings, many retirees could face a tough financial reality.
One common misconception is that you’ll save more money once you start earning more. Unfortunately, that’s rarely the case. Studies show that as income rises, spending tends to rise right along with it. It’s human nature to want better things—a nicer car, fancier dinners, or a bigger house—when your paycheck grows.
Think about it: maybe you start out driving a modest car like a Ford, but once you can afford it, you upgrade to a Ferrari. Then, when you get tired of that, you want a Lamborghini. This cycle of upgrading can keep you from building financial security. The key is learning to be content and disciplined with your money, which will make you happier overall and help you save more for the future.
If there’s one piece of financial advice that’s evergreen, it’s this: start saving as early as possible. The reason? Compound interest.
Compound interest means your money earns money—and then that earned money earns even more money. Over time, this snowball effect can turn small savings into a significant nest egg. The earlier you start, the more time your money has to grow. So even if you can only save a little now, it’s better than waiting until later.
Now for the main event: the savings benchmark you can use to check your progress. This rule is based on your gross annual salary and gives you a target amount to have saved at various ages. Here’s the breakdown:
By the time you hit your 20s, aim to have saved the equivalent of 25% (a quarter) of your annual salary. For example, if you make $100,000 a year, you want to have about $25,000 saved across your retirement accounts and emergency funds combined.
This might sound like a lot at first, but even small, consistent savings can add up, especially if you’re investing in tax-advantaged accounts like a 401(k) or Roth IRA.
By 30, your savings goal should be equal to your full annual salary. So, if you’re earning $100k, you ideally want $100,000 saved. This shows you’re on track to replace your income in retirement eventually.
At 35, the target doubles to two times your annual salary. For someone earning $100,000, that’s $200,000 saved. This is where your savings start to gain real momentum if you’ve been consistent.
The rule continues by increasing your savings target by the equivalent of your salary every five years:
By the time you reach 65, ideally your retirement age, you want to have saved between eight to ten times your annual salary. This amount should be enough to fund 20-30 years of retirement lifestyle without relying heavily on your kids or government programs.
Following this benchmark can help you avoid the financial pitfalls many Americans face. It’s not just about retirement—it’s about financial freedom and peace of mind. When you know you have enough saved, you can make choices based on what you want, not just what you have to do.
It’s easy to say, “I’ll save more when I make more,” but actually doing it takes discipline and planning. Budgeting, tracking expenses, and automating savings can help make it easier.
Try to resist the urge to upgrade your lifestyle every time your income increases. Instead, funnel those extra dollars into your savings and investments.
Set up automatic transfers to your savings and retirement accounts so you don’t have to rely on willpower alone.
The ultimate goal of saving is to be financially independent and not burden your children or loved ones in retirement. Having a solid nest egg lets you enjoy your retirement years with dignity and peace, and maybe even help out your family instead of needing help yourself.
Remember, this isn’t about being perfect—it’s about progress. Start where you are, save what you can, and keep moving forward.
If you had to pick a dollar amount you need to retire comfortably, what would it be? Think about that and start planning today. Your future self will thank you.
If you found this guide helpful, don’t forget to like, comment, and share it with friends who need a financial wake-up call. Building wealth is a journey, and it’s easier when we learn and grow together. Here’s to a prosperous future!
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