Saving

Here's how much money experts say you should have in savings at every age

Twenty/20

It's important to establish goals, whether they be career-related, personal, or financial. But many Americans struggle with defining their goals, especially when it comes to their money. For example, do you know how much money you should have saved up?

It can be difficult to conjure up an answer — especially given that there are many variables at play, including your age and your income.

When discussing "savings," it's also important to try and parse out precisely what you mean. Most experts would tell you that you should have several different buckets of savings: an emergency fund that's largely cash, for example, and could cover your living expenses for 3-6 months if necessary, and a different, less liquid account for midterm goals like travel, a wedding, or buying a home. 

Generally, when discussing long-term savings, the focus is on retirement savings. That's because, for most people, a comfortable retirement is the ultimate goal: You want to have enough money socked away to offset your expenses. 

How much you need to save for retirement, by age

So, how much do you need to have saved up to retire? It's hard to get an exact answer. Some experts will tell you that you need more than $1 million to live comfortably after you stop working. There are other guidelines that say you should save a certain multiple of your income by a certain age. 

"There are benchmarks," says Justin Halverson, a financial advisor at Minnesota-based financial firm Great Waters Financial. "One of the rules of thumb, for example, is to save up three-times your salary by age 40, six-times your salary by age 50, and so on."

That's certainly one way to do it, which is also a method championed by retirement plan providers like Fidelity. Here's the breakdown: 

  • Age 30: 1x your income in retirement savings
  • Age 40: 3x
  • Age 50: 6x
  • Age 60: 8x
  • Age 67 (retirement): 10x

For many people, these benchmarks are out of reach. The data shows just how far behind most Americans are: Almost two-thirds of Americans in their 40s have less than $100,000 in retirement savings, according to a 2020 TD Ameritrade report. Going by Fidelity's benchmarks, a 40-year-old earning $62,000, roughly the median household income, should have $186,000.

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Breaking down your savings goals

To stay on track, it may be helpful to break down that big retirement goal into smaller, annual ones. 

A report from Blacktower Financial Management Group released earlier this year estimated that the average millennial will need to put away $386,100 of their own money over their career, or a bit more than $8,000 a year, in order to retire at 67. The analysis expects that smart investing, compound interest, and making the most of an employer-sponsored retirement plan like a 401(k), will help savers reach their goal.

Under the right circumstances, it is possible to save $1 million or more in a 401(k) with an employer match, for less than $100 per paycheck.

Everyone's situation is different, though, and their goals are different, too. For that reason, it may be best to take a more personalized approach to your saving strategy. You can even use a retirement calculator, like the one from Grow, to figure out how much you think you'll need and to set some goals that make sense for you.

Think about savings in percentages, not hard numbers

Establishing some sort of savings goal — both for emergencies, retirement, and other future expenses — is "incredibly important," says Jacqui Kearns, the chief brand officer at New Jersey-based Affinity Federal Credit Union, who also leads the company's financial education initiatives.

But Kearns says that there's something important everyone should keep in mind: "You don't have to do it in any particular way."  She says that some people pick a dollar figure and start working toward it, while others look at their incomes, and instead make it a goal to "save a certain percentage" of that income.

This can be helpful for people who get stressed out or anxious about hitting a certain dollar amount. And it's also important to keep in mind that since everyone has different goals and is living under different circumstances, no single dollar-figure goal will work for everyone — especially if you need to save for other things concurrently, such as college tuition for your kids.

"I've got six kids," says Halverson. "So obviously, my savings goals are going to be different than somebody with no kids." It's important to "look at all of the factors in your life when considering savings goals."

Both Halverson and Kearns say it's important that you don't sacrifice too much today to feel better about retirement, which may be a long way off for some savers. "Balance it out," Halverson says. "Save and plan for the future while enjoying today."

Kearns agrees, and says that you should keep your goals in mind, save what you can, and not to worry too much about hitting specific targets.

"It's not a specific number," Kearns says. "It's what you can feel good about."

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