This Is How Much You Should Have in Savings by 40. How Do You Compare?

Saving money for retirement is often a multi-decade affair. And with many Americans needing over $500,000 to retire comfortably, it pays to check in long before you're ready to clock out. Keep reading to find out how much you should have saved by age 40 -- and how to catch up if you're behind.

The benchmark

Unfortunately, there is no single number that guarantees retirement readiness. Personal financial circumstances are unique, and countless factors can affect your retirement plan. However, rules of thumb can give you a general idea of whether your savings are enough.

Most sources recommend saving between two and three times your annual salary. With this approach, a 40-year-old American earning $50,000 per year would be on track only if they had over $100,000 in savings. Note that everyone's benchmark is different, and this multiplier of income approach is in part guessing at post-retirement spending.

But the rule leaves out many factors that could change how much you need to save to keep on track. For example, those with pensions may not need to rely on 401(k)s and IRAs as heavily as other Americans. Understanding your post-retirement budget, and how much you will need to rely on savings, can give you a good idea of whether you should aim higher or lower than the benchmark.

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How to boost your savings

If you fall shy of the benchmark, you're not alone -- and with the right strategy, you can make up for lost savings. Time is on your side, and you can still live a full retirement by both increasing the amount that you are saving and getting more out of your savings.

The first step toward boosting your retirement savings is getting serious about budgeting. Set a goal to save 15% of your income -- but don't worry if you can't do it right away. Many retirement plans offer escalating contributions, where your deferral rate goes up by a certain percentage every year. Taking advantage of this feature can help to gradually increase your savings rate -- without throwing you off of a cash flow cliff.

There are a few other ways to get the most out of your savings. This includes ensuring that you are getting your employer match and paying attention to your vesting schedule. Additionally, negotiating your salary is always a good idea, but can increase your savings without reducing your take-home. Finally, saving in a Roth IRA can allow your savings to grow and you can withdraw them tax-free in retirement.

Make a plan

Planning for retirement can be a complicated process full of unknowns, but you don't have to go it alone. Working with a qualified professional is a great way to get an objective opinion on your financial picture.

A fiduciary financial planner can provide insight into your unique financial situation, and offer actionable advice to get you from where you are to where you want to be. An experienced planner can keep a lookout for common pitfalls and even quantify your risk along the way. No one is better versed in your personal finances than yourself -- and combining your insight with a planner's expertise can help lighten the burden of planning your financial future.

Although many sources recommend having over double your salary saved by the age of 40, that's not the entire story. How much is enough is a very personal and difficult to answer question. Luckily, by boosting how and how much you're saving today, you can feel more confident in your ability to retire. And if in doubt, seek qualified help. As the saying goes, "If you want to go fast, go alone; if you want to go far, go together."