Retirement savings benchmarks answer a simple question: given your age and income, are you roughly where you need to be? They're expressed as a multiple of your salary, so they scale with what you earn and the lifestyle you'll want to keep.
Retirement savings by age: the benchmarks
Here are the common salary multiples, and what they mean for someone earning $70,000 a year:
| By age | Saved | On a $70,000 salary |
|---|---|---|
| 30 | 1× salary | $70,000 |
| 40 | 3× salary | $210,000 |
| 50 | 6× salary | $420,000 |
| 60 | 8× salary | $560,000 |
| 67 | 10× salary | $700,000 |
These multiples assume you save about 15% of your pay (including any employer match) from your mid-20s, retire around 67, and get part of your income from Social Security. If you plan to retire early, expect to spend more than average, or won't get Social Security, aim higher.
Why starting early matters so much
Compound growth does most of the work over long periods. Here's what saving $500 a month grows to by age 67, at 6% a year, depending on when you start. The last column shows the total in today's money after 2.5% inflation:
| Start at | You contribute | Balance at 67 | In today's money |
|---|---|---|---|
| 25 | $252,000 | $1,135,080 | $402,369 |
| 35 | $192,000 | $578,840 | $262,661 |
| 45 | $132,000 | $273,113 | $158,642 |
Starting at 25 instead of 45 nearly doubles what you put in, but the final balance is about four times larger, because the early dollars have decades longer to compound. To match the 25-year-old's balance, someone starting at 45 would need to save about $2,080 a month. Run your own numbers in the compound interest calculator.
How to work out your own target
- Estimate your yearly spending in retirement. Many people use 70–80% of their current income. Your own budget is better.
- Subtract guaranteed income such as Social Security or a pension. Your Social Security statement at ssa.gov shows an estimate.
- Multiply the gap by 25. This is the 4% rule in reverse: a $30,000 yearly gap needs about $750,000 saved.
- Work out the monthly saving that gets you there. The savings goal calculator does this in today's money, with your expected return and inflation built in.
If you're behind, here's what moves the needle
- Take the full employer match. It's an instant return you can't get anywhere else.
- Raise your savings rate by 1% a year. Time it with raises so your take-home pay never falls. The paycheck calculator shows how a bigger 401(k) contribution changes your take-home pay.
- Clear high-interest debt. A 24% credit card cancels out a lot of investment growth. See debt snowball vs avalanche.
- Use catch-up contributions from age 50, which let you put more into 401(k)s and IRAs each year.
- Plan to work a little longer. Each extra year adds savings and growth, and means one fewer year to fund.
Your retirement savings are only part of the picture. To see everything together, add up your assets and debts with the net worth calculator, and compare with net worth by age. To see how inflation eats into cash savings, try the inflation calculator.
This guide is general information, not financial advice. Returns are not guaranteed, and the projections assume a steady return, monthly compounding and no fees or taxes.