What is the correct amount to save for retirement, depending on your age? This is a question every working adult must confront, yet there is not a steadfast answer. From early-career workers to those nearing retirement age, age-based planning can boost financial and retirement prospects.
This guide will provide the essentials for how much you want to save for retirement, depending on your primary life stage. By using age-based, income-focused, and goal-based plans, you will learn about aligning your investment strategy to realistic financial benchmarks and taking full advantage of savings tools like a 401(k) or IRA.
If you're in your 20s and just getting started or in your 50s and trying to catch up, we'll give you the necessary steps to help you achieve your retirement savings goals.
Why Age-Based Retirement Planning Matters
The sooner you begin saving for retirement, the more opportunity there will be for compound interest to grow your money. Even if you wait until later in life, you can still catch up with the right plan in mind.
Planning based on age can help you modify your saving habits based on your financial realities. Age-based planning takes into account:
Income and expenses
Time to retirement
Risk tolerance
Employers' access to retirement accounts such as a 401(k) or IRA
Tax benefits and any contributions made by an employer
When you adjust your retirement savings plan based on age, you will ultimately have a better chance of achieving your financial milestones.
General Retirement Savings Benchmarks by Age
Many experts suggest saving around 10 to 15% of your gross annual income for retirement. Fidelity has established benchmarks that several people use often to determine where their savings should be at several different ages:
Age
Recommended Savings
30
1x your annual salary
40
3x your salary
50
6x your salary
60
8x your salary
67
10x your salary
Let’s break it down by age group with actionable tips for each stage.
In Your 20s: Laying the Foundation
Financial Focus:
Start a retirement account ASAP
Build emergency reserves (3-6 months of expenses)
Reduced high-interest debt (credit cards, etc.)
Retirement Goal:
By age 30, you have saved at least your annual salary.
In our twenties, retirement seems light-years away—but this is the best time to start! Because of compound interest, even small contributions today can be worth much money 40+ years from now.
Action Plans:
Sign up for your employer's 401(k) plan and put in enough to get the match.
If you don't have a 401(k) at work, open a Roth IRA—great for younger savers/those who fall into a lower tax bracket.
Try to save at least 15% of your income, with employer contributions included.
Investment Plan:
Invest in higher-growth assets, stock index funds, or target-date funds.
Try to keep fees low and diversify.
In Your 30s: Building Momentum
Financial Focus:
Increase contributions as income grows
Start a family or buy a home? Budget for long-term goals
Consolidate old retirement accounts
Retirement Goal:
Save 1–2x your salary by age 30; 3x by age 40
In your 30s, you're likely earning more and gaining financial stability. This is a crucial time to boost your retirement contributions.
Action Plan:
Max out your 401(k) if possible (the limit is $23,000 for 2025; check current limits).
Continue contributing to an IRA or start one if you haven’t yet.
Automate contributions to stay consistent.
Investment Strategy:
Maintain a growth-oriented portfolio with about 80–90% in equities.
Use target-date funds as a set-it-and-forget-it solution.
In Your 40s: Catching Up and Diversifying
Financial Focus:
Balance retirement savings with kids’ education expenses
Pay off high-interest debts
Revisit your financial goals and update your retirement plan
Retirement Goal:
Save at least 3x your salary by 40 and 6x by 50
This decade is a make-or-break period. Many in their 40s find themselves juggling competing financial priorities, but retirement must stay top of mind.
Action Plan:
Increase the savings rate to 20% or more, especially if behind.
Utilize catch-up contributions if you’re over 50 (starting this decade).
Consider a spousal IRA if one partner isn’t working.
Investment Strategy:
Gradually shift 10–20% of your portfolio into bonds for stability.
Rebalance your portfolio annually.
In Your 50s: Maximizing Contributions
Financial Focus:
Pay down your mortgage
Estimate your future retirement expenses
Consider long-term care planning
Retirement Goal:
6x your salary by 50; 8x by 60
With retirement on the horizon, your 50s are the time to get serious about locking in your plan. You can take advantage of all opportunities to save more.
Action Plan:
Use catch-up contributions: those 50+ can contribute extra to their 401(k) and IRA.
Reevaluate your expected retirement age and expenses.
Meet with a financial advisor to create a decumulation strategy (how you’ll withdraw in retirement).
Investment Strategy:
Shift to a 60/40 or 70/30 stocks-to-bonds mix.
Consider annuities or other guaranteed-income products for stability.
In Your 60s: Preparing for the Transition
Financial Focus:
Choose when to take Social Security
Finalize your retirement income plan
Understand Medicare and healthcare costs
Retirement Goal:
8–10x your salary by age 67
This is the last stretch before retirement. The focus here is on protecting your nest egg and setting up income streams for the future.
Action Plan:
Delay Social Security to increase benefits (up to age 70).
Consider downsizing or relocating to reduce expenses.
Make your 401(k) and IRA withdrawal plan tax-efficient.
Investment Strategy:
Prioritize capital preservation
Keep 40–60% of your portfolio in bonds or other conservative assets
Maintain some equity exposure to outpace inflation
How to Calculate Your Retirement Number
To estimate how much you'll need in retirement, consider the 80% rule: You’ll need around 80% of your pre-retirement income to maintain your lifestyle.
Quick formula:
Annual retirement income needed = Annual salary x 0.80
Total needed = Annual income required x 25 (for 25 years of retirement)
Example:
If you make $75,000/year:
$75,000 x 0.80 = $60,000 per year in retirement
$60,000 x 25 = $1.5 million needed by retirement
Adjust based on expected retirement age, lifestyle, and life expectancy.
Retirement Savings Vehicles
Understanding your options can optimize your strategy at every age.
1. 401(k) Plans
Employer-sponsored
Pre-tax or Roth options
Employer match = free money
Annual contribution limit (2025): $23,000 + $7,500 catch-up for age 50+
2. IRAs (Traditional and Roth)
Individual accounts
Contribution limit (2025): $7,000 + $1,000 catch-up for 50+
Traditional: tax-deferred
Roth: tax-free withdrawals in retirement
3. HSAs (Health Savings Accounts)
Triple tax advantage if used for healthcare
Can function as a stealth retirement account
4. Brokerage Accounts
No tax advantages, but no limits or penalties for withdrawals
Great for early retirees or those who max out tax-advantaged accounts
Tips for Boosting Retirement Savings at Any Age
No matter your stage of life, these habits can improve your long-term financial outlook:
Automate savings to remove guesswork and temptation
Increase contributions annually, especially after raises or bonuses
Live below your means and reduce lifestyle inflation
Avoid early withdrawals from retirement accounts—they come with taxes and penalties
Track your net worth and savings milestones each year
Mistakes to Avoid
Here are some common pitfalls to watch for:
Waiting too long to start saving
Ignoring employer 401(k) matches
Underestimating healthcare costs in retirement
Relying solely on Social Security
Failing to adjust your investment strategy with age
Avoiding these missteps can help you stay on track and meet your financial milestones.
Final Thoughts
Understanding exactly how much you should save for retirement based on age will allow you to make informed decisions. Whether you're 25 or 55, it's never too early - or too late - to take charge of your retirement future.
If you save the appropriate amount based on your age going forward, leverage retirement funding vehicles like a 401(k) or an IRA, and adopt a reasonable investment strategy, you will have a financial base to retire comfortably and with less stress.
So, please get started today: I want you to know that your future self will be grateful.
