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How Much Should You Have Saved for Retirement?


SUMMARY: There’s one question that eventually enters every worker’s mind—how much should I have saved for retirement? Here’s a breakdown of the retirement milestones you should meet for each decade of your life.

Unless you’re independently wealthy or a member of the royal family, retirement is a near-universal goal for everyone who holds a job. This leads to a single question that, sooner or later, will enter every worker’s mind—how much do I need to have saved in order to comfortably retire?

The short answer is: It depends. If you’re in your mid-50s, that number will be far different than it would be in your late 20s. Every decade has its milestones and it’s important to be aware of each to avoid falling behind.

retirement savings by age

A brief overview

First, let’s state the obvious—the younger you start, the better, and the less you have to save up front, due to the power of compound interest. Over time, the amount you should be putting aside dramatically rises. A sobering CNBC chart breaks down the monthly stash you should have in order to reach $1 million by age 67.

In addition to a diverse portfolio of investments, you would be wise to have three to six months of living expenses saved in an emergency fund for more immediate, unplanned needs.

Brace yourselves—here is the amount, by decade, you should expect to save in order to set the stage for a comfortable retirement.

In your 20s

Ah, the much-discussed (and ranted-about) millennials. They are the newest generation to enter the workforce and start saving for retirement. But this is arguably the most important time to develop the saving habit, especially with an employer that matches contributions to a 401(k) or 403(b). In 2018, 20-somethings had, on average, $25,500 in their 401(k) and contributed 7.3 percent of their paychecks to it.

By age 30, aim to have a balance that matches (or is at least half of) your annual income. You will be well ahead of the curve, as two-thirds of millennials have no savings at all.

Secure your future with our free retirement calculators »

In your 30s

Americans in their 30s with 401(k) accounts tend to be on an upward swing with retirement savings—their average balance hovering around $42,700. They contribute 7.6 percent annually toward retirement, which their employers match at an average rate of 4.4 percent, a significant improvement over five years ago, which saw an average balance of $36,700, representing 6.8 percent of paychecks.

In your 40s

Welcome to your peak earning years, which for men is age 48 and women, age 39. You may have already reached the halfway mark on the road to retirement.

Average 401(k) balances may have as much as doubled to $103,500 with 8.4 percent of paychecks contributed, likely the largest jump between decades. Employers match an average of 4.6 percent.

Assuming they make their average household income of $92,576, 40-somethings have hopefully put away $277,728 in savings, roughly triple their salary.

In your 50s

As you continue to ride out peak earning season, your expenses will also peak at this point. With an average yearly income of $99,423, you’ll want as much as six times that ($596,538) in your retirement nest egg.

Your average 401(k) balance lands at around $174,200 with 10 percent of your paycheck being devoted each month. If you’re behind, never fear—this is the decade where the IRS allows for catch-up contributions, to the tune of an additional $6,000 a year.

In your 60s

Things start to settle down a bit. Earnings dip, but so does spending. Your average yearly income of $80,474 is solid, and of course you’ll have (yikes!) eight times that amount at the ready for retirement—$643,792.

Your 401(k) sits at $198,600. Again, the pace is slowing down, and you may even have started to draw from the balance.

Your personal retirement plan

Did any of these numbers come as a surprise for you? If you’re concerned about how much you have (or don’t have) in your bank account, we suggest reading additional articles about saving for retirement. You can also use one of our retirement calculators to help further evaluate your personal needs and how to achieve them.

retirement calculators