Mastering Savings by Age: Expert Benchmarks for Every Decade
Discover how much you should save at every age with expert-backed targets and actionable steps to build lasting wealth. Unlock decade-by-decade savings insights to secure your financial future confidently.
Key Takeaways
- Start saving early—even small amounts build momentum through compound interest.
- Aim for 1x your salary saved by 30, 3x by 40, and 10x by 67.
- Automate savings and review budgets regularly to stay on track despite life’s expenses.
- Catch-up contributions and delaying retirement can help if you’re behind in your 50s.
- Shift to preserving wealth and managing risk as you approach retirement in your 60s.
Saving for retirement often feels like chasing a moving target. How much should you really have tucked away in your 30s, 40s, or by your last day on the job? Experts from Fidelity Investments and others offer clear benchmarks: aim to save 10 times your annual income by age 67, including all retirement funds, savings, and investments. But the journey is just as important as the destination. From the modest $7,000 average savings in your 20s to the strategic catch-up moves in your 50s, this decade-by-decade guide reveals how to build steady momentum. It’s not about perfection—it’s about consistent habits that grow your financial security. Let’s unpack the savings milestones you need to hit and how to course-correct if life’s curveballs have slowed you down.
Building Early Momentum
In your 20s, savings might seem like a distant dream, especially when the average is just over $7,000. But here’s the secret: it’s not about the size of your stash now, but the habit you build. Rachel Springall from Moneyfacts nails it—saving early, even a little, creates momentum. Think of it as planting seeds for a forest you’ll enjoy decades later. Experts recommend saving about 15% of your income annually, including any 401(k) match from your employer. This steady drip feeds the power of compound interest, turning modest contributions into substantial wealth over time.
Starting young also means you can afford to be patient and consistent. The goal by age 30 is to have saved the equivalent of your full annual salary. It’s less about hitting a magic number and more about setting a rhythm. Imagine Bo, who started with just $50 a month in a retirement account. Years later, that small habit blossomed into a comfortable cushion. The takeaway? Don’t wait for perfect conditions. Begin now, even if it feels small. Your future self will thank you for the head start.
Navigating Financial Pressures
Your 30s often feel like a financial tug-of-war. Income may rise, but so do expenses—think mortgages, student loans, and kids. U.S. data shows average savings hover between $9,500 and $13,000, which might feel underwhelming when bills pile up. Kevin Mountford, co-founder of Raisin, advises focusing on what you can control: automating savings and regularly reviewing your budget. Think of automation as your financial autopilot, steering cash into savings without daily effort.
The target by age 40 is to have saved three times your annual income. This decade demands discipline but also flexibility. It’s okay if you’re behind; starting where you are is the key. The myth that you need to save huge sums immediately can paralyze progress. Instead, steady contributions and smart budgeting keep you on track. Picture Sarah, juggling a mortgage and childcare, who automated 10% of her paycheck into retirement. Over time, that simple move eased her worries and built a growing safety net. The lesson? Even amid chaos, consistent savings win.
Maximizing Midlife Savings
Your 40s often bring the heaviest financial strain. College fees, home renovations, and elder care can stretch budgets thin. Yet, this is the decade when your savings discipline truly counts. Experts recommend ramping up savings to 20% of your income and ensuring your pension and 401(k) contributions are maximized. The average savings for this group is about $16,000, but many advisors encourage aiming higher.
Fidelity suggests having about six times your annual salary saved by age 50. For example, someone earning £60,000 should target £240,000 in savings. This might sound daunting, but reducing unnecessary expenses and focusing on retirement contributions can close the gap. Imagine Lisa, who cut back on dining out and redirected that money into her 401(k). Over a few years, her savings surged, easing her retirement fears. The takeaway? Even amid financial pressures, prioritizing savings can transform your future. It’s about smart choices, not sacrifice alone.
Catching Up and Adjusting
In your 50s, the finish line starts to come into view, but many find themselves behind on savings. U.S. data shows typical savings between $16,000 and $17,000, which may not reflect everyone’s reality. The good news? It’s not too late. Financial planners recommend several strategies: take advantage of catch-up contributions—an extra $7,500 for 401(k)s and $1,000 for IRAs in 2024—delay retirement to boost Social Security benefits by about 8% per year up to age 70, and review budgets to free up more savings.
Kevin Mountford emphasizes that even small, consistent contributions matter. Think of it as building habits that stick rather than chasing perfection. Consider Mark, who downsized his home and redirected savings into retirement accounts. His late start didn’t stop him from gaining momentum. The myth that you’re doomed if behind is just that—a myth. With focus and smart moves, your 50s can be a powerful decade for catching up and securing your future.
Preserving Wealth in Retirement
By your 60s, the game changes from growing your nest egg to preserving it and managing risk. Fidelity recommends aiming for 10 times your annual income saved by age 67. While average reported savings hover around $14,400, this figure often excludes those who retired early and rely on pensions or home equity. If you’re still working, keep saving, but shift your investments toward lower-risk, income-generating options like annuities or systematic withdrawal plans.
Sarah Coles from Hargreaves Lansdown highlights the importance of having three to six months’ living expenses in easy-to-access cash. Planning for healthcare and long-term care costs becomes critical. Imagine Joan, who transitioned her portfolio to safer bonds and maintained a cash cushion for emergencies. This approach brought peace of mind and steady income. The focus now is on preserving what you’ve built, ensuring your money lasts as long as you do. Retirement isn’t the end of saving—it’s a new chapter of smart stewardship.
Long Story Short
The path to a comfortable retirement isn’t a sprint; it’s a marathon marked by steady, intentional steps. Starting small in your 20s, even with just a few dollars, sets the stage for compound interest to work its magic. As expenses rise in your 30s and 40s, automating savings and trimming unnecessary costs become your best allies. If you find yourself behind in your 50s, don’t despair—catch-up contributions and delaying retirement can still turn the tide. By your 60s, the focus shifts from growing your nest egg to preserving it and managing risks wisely. Remember, these benchmarks are guides, not rigid rules. The real victory lies in asking, “What can I do right now?” and taking that step. The relief of a funded emergency account and the confidence of a growing retirement fund are rewards worth the discipline. Your future self will thank you.