Save. Spend. Splurge.

How much should you have saved for retirement so far by age?

The average household income is about $50,000 in America, but that takes into account ALL age groups.

Here’s what it looks like as an average household income of Americans by age:


Via: NPR


If we take this model and take a look at estimated required retirement savings, we can be a little more accurate and have average benchmarks for what you should have saved by retirement:

Age 35 = $77,376 saved (1X your salary)


Age 45 = $235,551 saved (3X your salary)


Age 55 = $377,585 saved (5X your salary)


Age 65 (retirement) = $604,136 saved (8X your salary)



It’s no wonder that people are delaying retirement until the age of 80 because they simply haven’t saved enough to retire:

While respondents said they will need a median of $300,000 in total savings to support themselves in retirement, the average amount saved is only $25,000.


Only 22% say they have calculated the amount of money needed for retirement — whereas 75% of respondents said they guess.

So to put it in perspective, 75% of people are guessing that they need about $300,000 saved for retirement (median number taken from all age groups), but they only have $25,000 saved.

Even more frightening news:

Seventy-five percent of Americans nearing retirement age in 2010 had less than $30,000 in their retirement accounts less than $30,000 in their retirement accounts. (Via)

For those NEARING retirement age, they still had less than $30,000 saved.

If you aren’t freaked out by now about your retirement (at any age that you’re at), you should be.


It isn’t rocket science.

It’s discipline, it’s boring & painful (at first!), and it’s work.

  1. Figure out your net income
  2. Build a preliminary budget based on your net income, based on what you think you spend
  3. Track your actual expenses; they are surely higher than what you’re estimating
  4. Review your budget each month against what you actually spent
  5. Trim your expenses (or be more realistic in your budget)
  6. Save at least 10% (I prefer 15% – 25%)
  7. If you still have a gaping hole in your budget, then make more money
  8. The younger you start, the better it is, otherwise you’ll have to work later and later

Are you on track?


  • Chris

    I haven’t read all of the entries above and this may have already been said, but most people today have most of their money in qualified “defined contribution” plans like 401K, 403B, etc. because most people are employees. Qualified plans are tax deferred during accumulation but fully taxed on distribution. My point is that when talk of financial readiness in retirement is focused on a number of dollars saved, as much of this discussion has been, we must always be mindful that we won’t have all of those dollars available to us. They may be in our accounts under our name, but as soon as we remove them, the government is going to take anywhere form 15 to 35% of them. So we have to include this in our calculations of what we need as net income. Of course, if you’ve been saving in a ROTH account (not taking tax breaks as you go) this point doesn’t apply.

  • Lynette

    Im learning so much about investing and i have regrets that i didnt quite get this understanding in my 20’s, i am 48 years old and don’t have nearly what i would have if i knew then what i know now such as atleast saving 5% to get the match from my employer. The way things look now i will have to work longer to have more time to save for retirement.

  • Rosanna

    Well…. Due to raising three children alone, going through a very messy and expensive child custody battle, having medical costs, and laid off from my job when the economy tanked, my savings have seen the black hole of emptiness. I am just about to turn 50, am two years from receiving a Bachelors degree (and a huge student loan). Because I live in Nevada everyone who is hiring at any level of employment will not hire if you do not speak fluent Spanish. Forget about experience- so I am trudging on my student loans for now. It is sad that after working from age 15 to 45 I am at this juncture. For those of you in your 20’s and 30’s, be happy with whatever job you have. Pray the company doesn’t lay you off, pray you can afford to pay for your medical needs without dipping into your savings, and pray your relationships stay strong!

    • save. spend. splurge.

      I hear you. I’m sorry you’re going through such a tough time, thank you for the warning and reminder.

    • jeff

      I am 62, Have student debt. Have a 13 year old. Going through chils support readjustment?
      Should I give up and work at Mcdonalds? Have 3 masters degrees

  • Anon

    #7 made me laugh uproariously.

    • save. spend. splurge.

      You mean make more money? Why would it be funny? People get part time jobs in addition to their full time ones all the time.

    • grinder

      #7. Been there. Instead of laughing uproariously, I got a second, and sometimes a third job. I’ll be laughing uproariously when the slackers show up with their hands out.

  • Daniel Bergstrom

    I’m 44 and have been saving as much as I could since I was 20. Currently we have around $840,000 in the market plus $400,000 equity in our home and some farmland worth around $350,000. We’re in good shape but I’ve sacrificed a lot in order to accomplish this and it hasn’t been easy. Currently I’m saving 25% of my income and so we don’t take a lot of vacations or have a lot of money for fancy cars or clothes. I guess some day I’ll be one of those millionaire next door types (who are wealthy but you’d never know if from external appearances). I wish schools taught young people about the importance of saving early. Fortunately for me, my father demonstrated the power of compound interest to me in a spreadsheet when I was 19. I remember being so amazed and just how big a difference it can make when you start saving early. I mostly invest in various stocks via a Motley Fool newsletter (which I recommend) and also use the TrendTimer software (which I also recommend).

    • Douglas Wright

      @ Daniel,

      CONGRATS! Your net worth is $1.59M making you a millionair. You didn’t mention any debt so just minus that from your $1.59M and see where you fall out.

      I couldn’t agree with you more that financial management should be taught in schools and it disgusts me that it never has thus the reason that most of our population relies so much on entitlments provided by our government. Some may argue that this is a topic for parents or guardians to teach but if we can teach sex education we should be able to give our young people the tools they need to manage their lives without subsidies or handouts. I don’t blame the youngsters because they don’t know what they don’t know. If parents and our society doesn’t put some level importance on the topic then none will be assumed. Just think how much money we could save as a nation by tesching our young the skills to be self sufficient. Instead we spend so much time teaching charity. Don’t get me wrong, teaching charity and giving is a good thing. But their has to be a balance. We need to emphasize self-reliance just as much. Your father teachings on compound interest was priceless. Unlike you and like most of this nation’s youth today, I was never taught financial responsibilty. I was taught that just because I had checks didn’t mean that I had money. I guess I should consider myself lucky that I was at least taught that. In fact, it took my neighbor to enlighten me and coach me along back 2000. I was 36 years old. I’m 49 now, and playing catchup. Due to my late start, I’ve had to max out my 401K contribution at $17,000 – $17,500 per year. Starting in January 2014, I will continue to max out my 401K contribution by increasing to $23,000. You want to talk about sacrifice? My father told me that nothing worth while comes without sacrifice. He had a bunch of other cliches that I won’t share here.

      Due to my lazy ignorance, I assumed that between SSI and my military retirement that I would be ok. And you know maybe I would be if I lived someplace other than California. Bottom line: we as a populus do not practice personal responsibility nor is it enstilled in our young which is making our nation stupider than the generation before and ever more reliant on GOVT.

      Whew, almost went into a rant there!


    • Thomas Newman

      I own my own place. Live in Naperville, Il . I started early too. I never made more than 21000. Have about 300000 in retirement. Net worth, over 400000, I know what you mean. I’ll coast into retirement, hopefully.

  • Douglas Wright

    I think any article written to inspire THOUGHT about retirement is beneficial, regardless of how misguided the assumptions may be. I think most people and articles (such as this) focus too much on basing retirement income on current income/salary levels and project forward. I’m of the opinion that, planners should focus on the lifestyle they want to live in retirement and when they want to begin living it. For me it’s age 62. The sooner I can begin living everyday without having to worry about a paycheck the better quality of life I can live.

    My suggestion is to decide your future lifestyle based on todays lifestyle. You should be mindful of the expenses you have today and measure that against your current income. Maybe your expenses equal 1/2 your income. Decide if you’re comfortable with that. Personaly – I’m not. My goal is to have retirement income of 5x my expenses as they will be projected in the future. I used excel to calculate future expenses by compounding todays expenses by a LIBERAL 3% every year for inflation. Once I got that number I was able to multiply that by five times. That is the income amount that I am striving to reach. To get there, figure in projected Social Security, your investments will make up the rest. Calculate the difference between what you need (5x expenses) and social security. What left is the income you will need from your retirement investments. You’ll have to figure how much you need in your investment acount at the time of retirement to make up that difference. Say you need to withdrawl $84,000 to make up that difference. For that amount of withdrawl, you’ll need roughly $1.4M in your account withdrawling 6%.

    There’s a bit more math to do to reach your $1.4M goal. But to get there you have to start at your goal and work a path back to NOW. That will tell you how much to should be putting away today. Simply basing your retirement goals off of your salary is doing yourself a great dis-service. We all deserve to live our golden years happy and comfortable. You’re going to have to figure have you want to live.

    Should anyone have questions as to my way of thinking, I’d be happy to answer them.

    • saverspender @ save. spend. splurge.

      I do like that idea of basing your retirement lifestyle on your lifestyle today. I can’t imagine moving to beans and rice when I am not used to eating like that.

      THank you kindly for your detailed explanation!! I hope everyone reads your comment.

      (I myself do not rely on Canada’s equivalent of Social Security because I am not sure it will be there. I will call that a bonus.)

    • Keith

      @Douglas Wright:

      I agree with this. The whole X Salary never made sense to me. That means someone who makes $250,000.00 HAS to have $2M dollars just to survive retirement. Whereas, someone who makes $30,000.00 only needs a mere $240,000.00 to survive the rest of their lives? That makes no logical sense whatsoever. It really should be, as you say, what you expect your lifestyle to be. I currently work in a very expensive city, so make a salary commensurate to being able to pay my housing and other expenses here. What if I want to move to a cheaper place when I retire? Why am I going to need 8 x my current annual salary? There are a plethora of retirement articles out there, and it seems like 99% of them are based on what you are making now and multiplying that by some random number. This does not seem the least bit logical or realistic to me. We really need to have more savvy investment professionals who look at anticipated lifestyles instead. Even lifestyle today is not completely accurate when you’re thinking of moving or are willing to live below your current means.

      • save. spend. splurge.

        …but how do you propose people who make only $30,000, save $2 million?

        I think the multiplying factors are trying to be realistic in what people can actually save in their retirement rather than giving them a goal they cannot reach.

        • Keith

          @save. spend. splurge.:

          Well, I don’t think they can save $2 million dollars. But, that’s not really the point. I don’t understand why someone who makes $250K a year NEEDS $2 million dollars. Sure, they may want that in order to maintain a certain lifestyle, but they certainly don’t need it. The point really is to figure out what a person needs to live in retirement, not to come up with some formula that gives such wild variations in amount.

          The reason this bothers me so much is because I want to know what I NEED in retirement so that I can truly plan adequately and accurately. I don’t make an assumption that 8 times my salary is enough. Maybe it’s actually too much. But, what I really need is someone who can give me a realistic average number that a normal person can expect to need to live and not be in poverty. I don’t need it to include extravagances or luxuries. And, if I’m only making $30K a year, I don’t want to be given a number that relegates me to poverty or homelessness during my retirement.

          Give me a real number so that I can plan an adequate lifestyle for how I want to live–and that’s not necessarily the lifestyle that I’m living now.

          • save. spend. splurge.

            AH! I see your point now.

            What each person needs is individual, because some might own a home (or not) when they retire, have work or government pension plans (or not), and/or have family help (or not), among a whole bunch of other factors such as health (how long will you live?) and other things you simply can’t control.

            Honestly, if you are worried about such things, you will probably have more than enough saved. My personal number is $1 million at a minimum, inflation included when I go to retire with a home paid full and clear. That should be enough to see me through basic living.

            • Keith

              @save. spend. splurge.:

              Thanks for the response. The million dollar number is something I have heard many times. Some have actually said $2M is more realistic. I think rough guidelines aren’t bad to look at. Although, probably everyone needs to talk to a financial adviser about their own wants and needs.

              Personally, I am hoping to retire early, which makes my situation different than the norm. I’m also completely willing to move to a cheaper area of the country if necessary to fulfill that early retirement wish. These days I’ve also found that saving as much as I can will allow me to buy a house outright in 5 years instead of paying a 30 year mortgage and wasting SO much money. There’s definitely a lot of interesting and complicated things to consider!

              • save. spend. splurge.

                I say $1 million because it’s easy to remember, you know? But that’s $1 million in cash with a house fully paid, assuming I also have a car and all those things already cleared.

                $2 million would be if I didn’t have a house paid and had to keep renting which is still an option because I could move to the boonies. Frankly, if things get really bad, there are places in the world to retire for $10,000 – $20,000 a year.

                I think it’s great that you want to retire early. I myself am casually aiming for 50 – 55, but am not adverse to working until I don’t want to any longer.

                I am also planning on buying my home outright in cash, or as much of it as possible. I have never been a fan of mortgages… even 5 years seems like a drain on my psyche, because I went through 18 months pummeling out $60,000 in student debt which changed my perspective on debt completely.

      • Iceman

        I so agree with you. Let’s say I need $5000 to live comfortably today. However I have no house payment and car payment when I retire. Let’s say that constitutes 50-60% of my expenses. Then I reduce my remaining g expenses, I would only need $1500 to live exactly the same as when I was working. Throw in a monthly $500 per mth for additional medical expenses and it would only take me $2000 per month vs $5000 per month. If Social Security pays me $1300 per month, that leaves me having to come up with $700 per mth to live the exact same life I lived making $5000 per mth.

  • ahp987

    Don’t be too discouraged by these average numbers. I say if you are the type of person to frequent personal finance blogs and look up such information. You are definitely on the right track, or at least you are coming up with an idea or plan to get there.

    Everyone’s situation is totally differently I believe. At least by your early 30s you may not be were you want to be or close to it. Or could be in a heap of student loan debt. Unless you went to school for a law degree, medical degree or anything that is in the high paying area then that is fine. Because you will probably pay off that debt fast and catch up on those savings.

  • ahp987

    These numbers have to be a joke. I am 29 years old and no college degree. But because of my experience and training in the military for 8 years. I am earning a 6 figure income, I just hit 300k net worth. This figure only includes cash and cash investments.

    • saverspender @ save. spend. splurge.

      1. You’re lucky that you are able to earn such money from being in the military.

      2. Humility goes a long way, and I find it strange that a military person such as yourself would say such things.

      Keep in mind that bragging doesn’t impress anyone here, especially when you say rather crude and insensitive remarks like “these numbers have to be a joke”, and saying “this figure of $300K net worth only includes cash and cash investments”.

      3. Not everyone has had the opportunities that you have had, or are able to get to where you’ve gotten, and it would do you some good to keep that in mind before you pass judgment on others.

      • ahp987

        @saverspender @ save. spend. splurge.:

        Sorry, I did not mean to come off that way.

        • ahp987


          “this figure of $300K net worth only includes cash and cash investments” When I said this I was not bragging, I was simply just stating how I calculated my net worth. Many people calculate things different and include things that I do not agree with in what exactly measures net worth.

        • saverspender @ save. spend. splurge.

          Just be careful when you’re writing on the ‘net. People can’t see the emotions / faces of someone talking and they don’t know you, so they have only your words to go by.

          • ahp987

            @saverspender @ save. spend. splurge.: I should at least expand on how I got to were I am by age 29. This will at least help some one who is at least 10 years younger than me to get a much higher net worth than the average person.

            I did not attend college after high school, I went into the Army. As a enlisted soldier you do not make a whole lot of money at all. Starting pay for some one in the pay grade of E1-E3 is around 14k a year. Military pay scales are easily found all over the internet, so its not any secret as to what we make. I was a lot different than my peers, I did not live the pay check to pay check life style like most did. A lot of young soldiers tend to waste they’re paychecks really quick, its usually just a lot of partying and buying the latest toys out there. I avoided most of that, I still had fun when I could but I budgeted myself so I could save as much as I could each month. I paid off my car really quickly and had no other debts ever. After serving 8 years, a few deployments, and still driving the same car today. I was able to save about 60k by the time I left the Army.

            I did not make a 6 figure income up until about two years ago. That is when I used my experience and certain skills that I learned from the military, to land my self a higher paying government contract job.

            It might sound easy or that I am lucky, but I have sacrificed a lot in the sense of my freedom, time, and having a “normal life”. Also haven’t had the chance yet to really get into a real relationship and start a family. Since my job and lifestyle has had me traveling and on the road a lot, I really don’t have any bills, because I got rid of my place that I was paying rent on because I am hardly home. An pretty much living a really low expense life style with a high income.

            The key I found to all this is, there is only so much saving we can do. But getting the right skills and education to land a higher paying job and making more money is the ultimate choice to really make head way on your net worth.

            Now that I am making more money, I have kept my personal expenses the same to when I was only making about 30k a year. When you make more, people tend to spend more, buy a new car, live in a more expensive apartment etc.

      • Angelica

        Thank you for your response !! I have the honor to have a son in law who served this country 5 times in Irak , ( now retired because injuries) and yet cannot said that , the government has not paid to this service people in a way that deserved …thanks God that my daughter had a college education and now she support the family …yes, it is pretty cruel that this ” gentleman ” take the time to disclose something that is quite revealing as ” cruel and simple as grating ” may the Lord bless you sir!!! And thank you for let it him know that this is not the place to do so!!!!!

  • Terry Pratt

    I’m not even close to being on track but then again, I think the benchmarks have a glaring flaw.

    The benchmarks call for an equal contribution from everyone, whether they earn 1x poverty level or 5x poverty level or 20x poverty level.

    The benchmarks say I should now have $60K saved for retirement.

    My net income is $12K, or $1K per month. Who wrote the benchmarks and how much do they seriously expect me to save each month?

    • saverspender @ save. spend. splurge.

      Believe me, when I read those benchmarks, I was really.. REALLY depressed when I was in debt.

      Then I felt like a big fat failure for not meeting these “expectations”, so I hear where you’re coming from.

      These benchmarks are averages (the big glaring flaw), written by people and formulated by those who did research and came up with an ‘average’ based on what they found out.


    Weirdly, I’m on track or ahead with retirement savings (according the calculators). Australian incomes (or my income) are higher than those you listed, but even still, the metrics of how many times at a certain age is true. I’m not yet at 1x my salary, but I’m not 35 either 😀 I started adding $50 per week two or three years ago, cause women almost ALWAYS end up behind on retirement savings.

    • saverspender @ save. spend. splurge.

      For me, any little bit counts. $50 per week, or $5 a week, it’s still SOMETHING.

      You are right that women are behind on retirement savings. It’s a chronic problem to forget about it because no one ever teaches girls at a young age that they have to save too.

  • Budget or Fudget

    Now I’m even more impressed by bf’s mom saying to me offhandedly when we were talking about retirement “bf’s dad just hit one million in his retirement and we just paid off the house!” Especially because he’s not raking in hundreds of thousands of dollars every year. Something for me to shoot for!

    • saverspender @ save. spend. splurge.

      That is admirable and inspirational!!!

      $1M in his retirement and having a fully paid house is something they should be very proud about, and should be able to crow about 🙂

      My parents just cleared their house but they have $0 in savings and are near retirement. Let that sink in….. 🙂

  • Sara

    We’re behind, but I’m also not done with school. While I generally think delaying graduate school for a few years is a good idea, it means that my late 20s will be playing catch up in terms of retirement savings.

  • Liquid_Independence

    Everyone should think about saving and planning how to live off their retirement some day. Of course a public school teacher who has a define benefit pension and never want to have children of his or her own should set different savings goal than someone else who has no pension waiting tables and plans to have kids in another five to ten years. I’m 25, what should be the salary multiplier I should use for my savings? I’ve not saved 1x my salary yet, but hopefully I’m on the right track.

  • alwayshungry4

    I will be a ~1-2 years behind for the 35 year benchmark, but have every intention of ramping up once this debt stuff is behind me. $25k is kind of frightening.

  • My Shiny Pennies

    I’m on track based on the data, but I also set me own retirement goals. I plan on withdrawing 4% from retirement funds annually and based on my annual spending, I will be able to retire when my savings reach $750,000. I’m not including social security since its future is uncertain. I’m also basing the number on the assumption that my mortgage isn’t completely paid off. Yeah, I like to be conservative.

  • Tim

    Well, I’m turning 35 this year and my amount saved is closer to the 45 benchmark. Yes I’m obessive with saving.
    Yet what is really interesting about those numbers is that the average income of 65+ is $43,000/year, but if you take 4% of that $604K, that works out to like $24,000/year. My research for Canada showned the majority of people retire with anywhere in that spread of income levels ($24k to $40K), regardless of their pre-retirement incomes! So perhaps we can finally stop using the stupid 70% income replacement rule and accept the facts. Most people don’t get to that level of income replacement (except very low income people which with government programs exceed it).

  • Debt Perception

    On track? I’m so screwed! Student loans eat all my income. Maybe when I’m approaching 50 and my loans are finally paid off I’ll be able to start saving for retirement. 🙁

  • Do or Debt

    Ugh. My retirement benchmark for my age bracket is pretty much the same amount I owe in student loans 🙁 Oh well, I know once I get them paid off, I will focus on retirement!

  • Mrs PoP @ PlantingOurPennies

    We don’t like to use our salary as a benchmark because the goal is to keep our spending roughly the same no matter how high our income goes. Besides 8x your salary isn’t going to provide a whole heck of a lot if you follow the 4% rule at retirement. That’d just be 24% of your salary – which if you’re used to spending 75-85% of it, is going to feel REALLY tough.

    • Mrs PoP @ PlantingOurPennies

      But yeah, we’re totally on track. Even on track for retiring in our 30’s, hopefully!

      • Mochi & Macarons

        I’d agree with not using your salary. I focus on my expenses, not my salary, although lately, it hasn’t felt like that to me, but I have time on my side.

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