This Is How Much You Should Have in Savings by 65. How Do You Compare?

When saving for retirement, it can be difficult to know how you compare with others in your age group. There is no hard-and-fast rule for how much is enough, but asking the right questions can help point you in the right direction. So, how much should you have saved by the time you're 65?

How much money is enough?

It can be challenging to know whether your savings will last you throughout retirement. Every saver has a unique situation, and some pieces of the puzzle can be very complex. What's more, the future is frustratingly uncertain -- how markets will perform, what tax rates will be, and what unexpected expenses lie in the future are all unknowns that can have a big impact on your retirement.

A rule of thumb won't tell you exactly how much you need to save for retirement, but it can get you in the ballpark. By age 65, most sources recommend having saved between eight and 12 times your annual salary. So, for an earner making $70,000 per year, a good goal would be over $500,000, according to the rule of thumb.

You can then adjust the above number based on a handful of factors. If your income sources in retirement, things like Social Security, pensions, and annuities, are greater than your monthly spending, you will likely need to save less. If you or your family have a history of expensive health issues, or above average longevity, it may be wise to save more.

Not there? Do this

Saving up over $500,000 is no easy task. Luckily, there are a few ways for those nearing retirement to increase their savings -- or do more with less. Let's focus on two strategies: building wealth and making it go further.

There are a few ways Americans can boost their assets in the years before retirement. First, 401(k)s and IRAs allow older Americans to save more each year in the form of catch-up contributions. In 2023, those over the age of 50 can save $7,500 more each year in their 401(k)s, and $1,000 more each year in their IRAs than younger workers. Another option is to delay retirement. Continuing to work for even a few extra years can allow you to continue building your savings, and your Social Security benefits may also increase.

It may also be helpful to look at post-retirement expenses, which can whittle away your savings. Reducing monthly expenses, even by a small amount, can compound over many decades spent in retirement. Entering retirement debt-free, if possible, can also help. Even low-rate debt can eat away at retirement balances -- and could make you miss out on years of compound growth.

What else you should know

Even with a long history of saving and investing wisely, many Americans can't help but feel uneasy about their retirement. Retirement brings with it many "what-ifs" that can't be answered with a rule of thumb. If you are uneasy about your financial future, a qualified professional may be able to help.

There is no one-size-fits-all when planning for retirement. A qualified fiduciary financial planner can provide an expert opinion and advice unique to your financial situation, and can answer all of your questions along the way. You are the foremost expert on your own personal finances -- but seeking a second opinion can go a long way toward achieving peace of mind.

How much do you need to have saved by age 65? The answer depends on your personal circumstances, and on factors like longevity, post-retirement income sources, tax rates, and more. Beyond a savings estimate, seeking the advice of a qualified professional can help inspire confidence in your ability to successfully retire.