How Much Money You Should Have Saved by Each Age
Justin Sayarath · Jan 29, 2019

As you try to determine how much of your budget to put towards retirement, it’s hard to know how much you ought to have saved up. The common wisdom, laid out by Fidelity Investments, is that by the time you retire you should have 8-10 times your salary saved for retirement.

The standard advice is to try to have your annual salary saved up by age 30, and to basically add that amount again to your retirement account every five years until you retire. That means if you want eight times your salary saved by age 65, you’ll want twice your salary by age 35, three times your salary at 40, etc.

On the one hand, this is perfectly good advice that most Americans would do well to follow. But if you spend any time on Twitter, you may recall some pushback on this recommendation. Many people found the idea of saving twice your salary by age 35 so implausible that it became a meme.

And in retrospect, it’s not hard to understand why. 1 in 3 Americans have less than $5,000 in retirement savings, and over 20% of Americans have no retirement savings at all. For someone burdened by a lot of debt, the idea of being able to put away a spare $50,000 into retirement savings may seem laughable. But how much is enough? Honestly, that really depends upon your individual situation, your own financial goals, and the kind of lifestyle you expect to be leading in retirement.

Clearly it’s safe to say that zero savings is too little. Even leaving retirement aside, most experts recommend having 3-6 months worth of income set aside as an emergency fund, to make sure you are covered in case of a sudden loss of income. But retirement accounts grow with compound interest and let you avoid taxes, making them not only an important place to put your money, but an advantageous one as well.

So while it would be ideal for everyone to save twice their salary for retirement by age 35, realistically not everyone will be able to reach that goal. If that seems too daunting, here’s a more attainable goal:

  • 30 - half your salary
  • 40 - twice your salary
  • 50 - 3.5 times your salary
  • 60 - 6 times your salary
  • Retirement - 7+ times your salary

The important thing to do is to do what is best given your own situation. As they say, the best time to start saving more for retirement is yesterday, and the second-best time is now.