How Much Should You Have Saved for Retirement?
When it comes to retirement, there’s no one-size-fits-all solution. However, setting clear goals for savings can help ensure you're on track.
While it might seem daunting, breaking your retirement savings goals into manageable stages makes the process easier to navigate. A popular benchmark is the “multiplier approach,” which offers a guideline for how much you should aim to save based on your age. These goals help put you on the right path to achieving a comfortable retirement.
So, how much SHOULD you have saved for retirement based on your age? Let’s break it down.
By Age 30: Save 1x Your Salary
As you enter your 30s, the idea of retirement may feel distant. However, this is one of the best times to get your financial house in order! The earlier you start saving, the more time your money has to grow through compound interest. Aim to save at least one-time (1x) your annual salary by the time you turn 30.
At this stage in life, you may be focusing on career advancement, paying off student loans, starting a family, or saving for a home, and setting aside additional money for retirement can leave you feeling restless. To sideline these feelings, understanding your budget, spending habits, and the power of saving early can help you overcome your doubt and begin saving for retirement with ease.
Setting up automatic contributions to your retirement account, like a 401(k) or IRA, can help build good habits that last throughout your career. These types of contributions can typically be made through your employer's payroll system, allowing you to designate a portion of each paycheck to go directly into your retirement account. This "set it and forget it" approach ensures consistency in saving, helps you take advantage of compounding growth over time, and may even reduce your taxable income if you're contributing to a traditional 401(k) or IRA. Additionally, many employers offer matching contributions for 401(k) plans, which is essentially free money that can further accelerate your retirement savings.
By Age 40: Save 3x Your Salary
By the time you hit 40, your earning potential is likely to have increased, and ideally, you’ve had at least a decade of consistent saving behind you. At this point, you should aim to have saved three times (3x) your annual salary for retirement. At 40, life can pivot your family obligations, like paying for a child’s education or caring for aging parents, so balancing savings with other financial goals can be tricky. However, the more you save now, the more flexibility you’ll have down the road.
Saving 3x your salary by 40 assumes you’ve been steadily saving and investing -- if you’re 40 and haven’t saved yet, it’s not too late to catch up and create goals for yourself! Here are a few strategies for those looking to catch up:
Consider Aggressive Investments - With two decades or more until retirement, maintaining a portfolio heavily weighted toward stocks can help maximize growth potential while still giving you time to recover from market fluctuations.
Open an IRA or Roth IRA - If you’ve maxed out contributions to a workplace plan like a 401(k), consider opening an IRA or Roth IRA for additional savings. These accounts offer tax advantages that can boost your long-term growth.
If you’ve been saving and you’re not on track, don’t panic. You can still take steps to close the gap and set yourself up for a fruitful retirement. Here are some practical strategies to help you achieve this milestone:
Increase Contributions Gradually - If saving a large percentage of your income feels overwhelming, start small and increase your savings rate by 1% annually. Over time, this approach can have a significant impact without drastically affecting your day-to-day budget.
Maximize Employer Match- If your employer offers matching contributions for your 401(k), make sure you’re contributing enough to take full advantage of it. This is essentially free money that can help accelerate your savings – a no-brainer!
By Age 50: Save 6x Your Salary
Reaching 50 is a critical time in your retirement planning -- At this stage, you should aim to have saved six times (6x) your annual salary. This is when you should begin to seriously focus on building up your savings, as there are fewer years ahead of you to work and save.
While you’re likely more established in your career, you may also have more significant responsibilities, such as paying for children’s college tuition or helping with family medical expenses. Despite these pressures, it’s essential to prioritize your retirement savings. If you haven’t met the 3x target by 40, now is the time to ramp up your efforts, whether through increased contributions or maximizing tax-advantaged accounts like IRAs or 401(k)s.
Take Advantage of Catch-Up Contributions - If you're over age 50, the IRS allows additional "catch-up" contributions to certain retirement.
401(k) Plans - In 2025, individuals aged 50 and older can contribute an additional $7,500 on top of the standard $23,500 limit, bringing the total possible contribution to $31,000.
IRAs - For IRAs in 2025, those aged 50 and older can contribute an extra $1,000 on top of the $7,000 limit, for a total of $8,000 annually.
Impact Example: If you start making catch-up contributions of $7,500 annually at age 50 and earn a 6% average annual return, these contributions alone could grow to over $125,000 by age 65!
By Age 60: Save 8x Your Salary
As you approach age 60, retirement is likely drawing closer. By this point, you should aim to have saved at least eight times (8x) your annual salary. Reaching this goal can provide a strong financial foundation for your retirement years, helping to transition you comfortably without the worry of outliving your savings.
It’s important to remember retirement doesn’t need to be an all-or-nothing transition. Many people choose to ease into retirement with part-time work or pursue passion projects before fully stepping away from the workforce. Others may decide to fully retire and focus on personal goals like traveling, spending time with loved ones, or simply unwinding after decades of hard work.
Having 8x your salary saved by age 60 gives you the freedom to enjoy retirement on your terms, whether it’s working less in a part-time role, traveling the world more, or simply relaxing.
Start Saving Early, Save Consistently
These retirement saving milestones serve as valuable guidelines to help you stay on track for a financially secure future. While they aren’t set in stone, they’re based on the idea you’ll need 70-80% of your pre-retirement income annually to maintain your lifestyle. By aiming to save 1x your salary by 30, 3x by 40, 6x by 50, and 8x by 60, you position yourself to accumulate enough wealth to meet that goal. The key is to start saving early and consistently—small contributions made today can grow significantly over time thanks to the power of compound interest. Whether retirement feels far away or just around the corner, establishing a clear savings plan and adjusting it as needed will give you the flexibility and confidence to enjoy your retirement years on your terms.
Contact a KerberRose Wealth Management advisor today for a consultation to ensure you’re on track for a solid retirement!
Alexandria Miller, CPFA® Financial Wellness Advocate