There are no hard-and-fast formulas to predict how much you should have in your retirement savings at any given time in your life, as there are just too many variables to take into consideration. But by looking at advised guidelines from various industry professionals, you can start to get a general idea of where you need to be.
Dan Kadlec of Time magazine and Ann Carrns of the New York Times both reference guidelines that state the following:
- At age 35, you should have an amount equal to your annual salary saved up.
- At age 45, you should have saved three times your annual salary.
- At age 55, you should have saved five times your annual salary.
- At general retirement age (67), you should have saved eight times your annual salary.
In a 2016 article, Jonnelle Marte of The Washington Post shares a large investment firm’s updated guideposts, which show just how quickly the “normal” target for savings can change.
These guideposts state that
- At age 30 (not 35), you should have an amount equal to your annual salary saved up
- At age 35, you should have saved twice your annual salary
- At age 40 (not 45), you should have saved three times your annual salary
- At age 67, you should have saved 10 times your annual salary
On the other hand, when taking into account a different set of assumptions—including how much you make, when you began to save, how much you contribute to savings, if there is an employer match, and what the inflation levels and portfolio growth rates are—a NerdWallet study from late 2016 reveals that 22 percent of pay may be the most on-point retirement goal for millennials.
In a CBS News article, Steve Vernon of MoneyWatch describes standards that measure goals differently, this time based on when you want to retire (and like the other sets of guideposts, this set comes with its own assumptions).
In a CBS News article, Steve Vernon of MoneyWatch describes standards that measure goals differently, this time based on when you want to retire (and like the other sets of guideposts, this set comes with its own assumptions).
According to the Boston College Center for Retirement (CRR),
- To retire at age 62, save 15 percent of pay
- To retire at age 65, save 10 percent of pay
- To retire at age 67, save 7 percent of pay
- To retire at age 70, save 4 percent of pay
In general, Vernon says, this matches up to another up-to-date analysis.
“A recent study by Transamerica reports that the median savings levels for millennials [are] currently seven percent of pay, not counting employer matching contributions, which should be counted toward meeting savings targets,” Vernon writes.
Of course, it may make you feel better just knowing how your savings stack up against others’ in your age bracket in real life—not under a study’s ideal circumstances. A survey from LearnVest and Chase Blueprint pared down data of men and women in various age ranges to find out how much they actually have saved:
- Women between the ages of 25 and 32 admitted to having an average of $37,000 in their retirement accounts.
- Men aged 25 to 54 admitted to having an average of $220,000 in their retirement accounts.
- Women between the ages of 45 and 54 admitted to having an average of $219,000 in their retirement accounts.
If you want to feel comfortable about the amount you are putting away toward retirement, consult with a financial advisor, who will discuss your goals and give you advice based on your own set of circumstances—and without assumptions.
