How much should you have saved for your retirement? The answer varies widely depending on your lifestyle goals. A cozy treehouse in the Midwest with great Wi-Fi won’t cost nearly as much as a penthouse in Manhattan. Regardless of your dream, there’s a financial plan that can help you achieve it.
Read on to discover the average retirement savings by age, along with benchmarks for your net worth!
Savings Benchmarks by Age
For each decade of life, you’ll find:
- Average (median) US retirement savings by age—pprovided by the Survey of Consumer Finances
- Recommended savings guidelines by age
- Benchmarks for your net worth
- Tips for saving during that decade
Understanding “Median” Savings
Imagine a line of people arranged by the amount in their retirement accounts, from least to most. The median savings is the amount held by the person in the middle of this line. Half have saved more, and half have saved less.
What Is Net Worth?
Net worth is calculated by adding up all your assets (cash, retirement savings, home value, etc.) and subtracting your liabilities (debt). This measure might be the most crucial retirement savings benchmark as it takes both savings and debt into account.
Now, let’s break down how much you should have saved by different ages.
Retirement Savings by Age
Under 35 Years Old
- Median retirement savings: $18,880
- Recommended savings: It’s crucial to start saving early. Financial advisors suggest saving 10% to 15% of your income from the beginning of your career. Don’t worry if student loans delay this; earning a degree typically pays off in the long run.
- Net worth benchmark: It’s common for young adults to have a negative net worth due to student loans and other debts. Focus on building your net worth over time by consistently saving and managing your debt.
Tips for Saving in Your 20s and Early 30s
- Focus on education and career growth: Invest in your education or career to increase your earning potential.
- Start saving early: Aim to save at least 10% of each paycheck, creating a strong habit that will benefit your retirement savings.
Ages 35 to 44
- Median retirement savings: $45,000
- Recommended savings: By this age, aim to have saved 1–2 times your annual salary. Consistent savings over this decade will help you reach this goal.
- Net worth benchmark: Total savings should be about 1–2 times your annual salary, with retirement savings making up a significant portion.
Tips for Saving in Your 30s and Early 40s
- Make saving a priority: Save before spending on discretionary items each month.
- Create a detailed budget. Track your expenses to ensure you’re saving sufficiently and spending wisely.
- Set clear financial goals: Plan for future expenses like home renovations or children’s education, and adjust your savings accordingly.
Ages 45 to 54
- Median retirement savings: $115,000
- Recommended savings: Aim to have 3–4 times your annual salary saved by the end of this decade.
- Net worth benchmark: By age 45, aim for a net worth of twice your annual salary, focusing on both debt reduction and savings growth.
Tips for Saving in Your Mid-40s to Mid-50s
- Automate your savings: Set up automatic contributions to retirement and other savings accounts.
- Diversify investments: Consider additional investments like a brokerage account or real estate.
- Use financial tools: Tools like Quicken can help you track your net worth and manage your finances efficiently.
Ages 55 to 64
- Median retirement savings: $185,000
- Recommended savings: Strive to have 8–10 times your annual salary saved by this stage, though personal retirement goals may alter this target.
- Net worth benchmark: Aiming for a net worth of 6 times your annual salary by age 64 is a good benchmark, but focus on what fits your retirement plans.
Tips for Saving in Your Late 50s and Early 60s
- Review your retirement plan: Ensure your savings and investments align with your retirement goals.
- Consider additional income streams: Explore part-time work or consulting to supplement your retirement income.
- Protect your savings: Adjust your lifestyle as necessary to ensure financial stability.
Ages 65 and Older
- Median retirement savings: $200,000
- Recommended savings: Savings should align with your specific retirement lifestyle needs.
- Net worth benchmark: Ensure your finances support a secure and comfortable retirement, focusing more on sustainability than specific benchmarks.
Tips for Managing Savings in Your 60s and Beyond
- Create a sustainable retirement plan: Ensure your retirement income supports your desired lifestyle.
- Explore flexible work options: Consider part-time or freelance work to enhance your retirement income.
- Monitor and adjust: Regularly review your finances to make necessary adjustments and protect your savings.
Building a Retirement Savings Plan That Works
If you’re unsure about your retirement plan, use a retirement calculator to see if you’re on track. Don’t forget to check for any unclaimed 401(k) accounts.
The Bottom Line
No matter your age, tracking your finances and planning to grow your net worth are essential steps toward achieving your retirement goals.
To see how Quicken can help you track and plan your retirement, start here.
Reach your financial goals with confidence. Try Quicken Simplifi or Quicken Classic today.
Source : https://www.quicken.com/