There's no linear path to retirement. Some individuals accumulate their wealth early in life, while others fall short of their savings goals by the time they reach retirement.
Most workers aim to wind down their careers sometime in their 60s or 70s, so they can retire and focus on what they enjoy, whether it's spending time with their grandchildren, taking the opportunity to travel, or simply slowing the pace of their lives.
While there's no one-size-fits-all answer for how much to save for retirement, workers should regularly monitor their progress to ensure they're on track to reach their goals. Here's one way to determine how much retirees should have invested by age 65.
What the data and experts say about retirement savings
Luckily, experts have devoted considerable time to pondering how much to save for retirement, since it's a significant life event and a substantial part of someone's financial journey. Fidelity, one of the largest providers of individual retirement and 401(k) accounts, has published suggestions on the topic and recommends that people try to save different multiples of their annual salary by the time they reach certain ages.
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By age 30, Fidelity recommends a person have saved the equivalent of a year's salary. This recommendation increases with age, so that by 35, it is twice a year's salary, and by age 40, it is three times -- and so on.
By age 67, Fidelity recommends having saved 10 times your salary. So, if you're making $75,000 per year at 67, then the suggested goal is $750,000 in retirement savings.
In this scenario, Fidelity assumes that people save 15% of their income annually, starting at age 25, including any employer retirement contributions. It also assumes that people will invest more than half of their savings in stocks on average, retire at 67, and then lead a life similar to pre-retirement life.
This is just a recommendation, and I would argue that it's harder to save these days, given the growing cost of living -- from food to housing. The counterpoint could be that the stock market has done quite well since the Great Recession, so if you did manage to invest, you have likely seen strong growth.
Public data also details how much people have actually been able to save by retirement. According to the Federal Reserve's Survey of Consumer Finances, the average retirement savings of a U.S. family in 2022 was close to $334,000. However, this data can be skewed by outliers, especially due to the growing income inequality gap. So the median retirement savings of a U.S. family was much lower at $87,000.
Fidelity has its own data, showing the average 401(k) balance for people between the ages of 65 and 69 was $251,400 at the end of 2024. This data is based on 26,700 corporate defined-contribution plans and 24.5 million participants as of the end of 2024.
Keep your retirement goals in mind
Public data and expert advice are helpful as guidance, but there is no single correct answer for how much to save. A retiree who plans to live a simple life may need far less than one who plans to purchase a vacation home or travel extensively. The key is to have goals, so you can make a plan.
If you don't think about retirement at all, then you might find yourself flat-footed when the time arrives. However, if you set realistic goals and allocate a specific amount each year for retirement, then accumulating the right level of savings should not be overwhelming.
