How much should you have saved for retirement so far?
I’ve always wondered what the benchmarks were for saving, net worth and retirement numbers by age.
It can be so hard to judge all of that, seeing as our income varies over our lifetime, and we don’t know how long we’ll live or how much we will really need.
According to Fidelity, here are some numbers they tried to pony up for us:
By age 35, your goal is to save an amount equal to your annual pay.
By 45, you will want to have saved about three times your salary, rising to five times your salary by 55.
Typical wage earners should aim to save at least eight times their final annual pay to be sure they can afford basic living expenses in retirement.
Naturally, this is assuming that you will eventually get promotions and climb that proverbial ladder to earn $75,000 by the time you’re 55 or so.
Let’s say you get a 3% raise per year as an average, and you started working at 24 for about $30,000 a year.
Here are your numbers:
35: Saved $41,527 as your net worth (1 time)
45: Saved $167,426.51 as your net worth (3 times)
55: Saved $375,012.05 as your net worth (5 times)
65: Saved $806,375.74 as your net worth (8 times)
These numbers are not terribly realistic, as not many people at 65 will reach $100,000 as their annual income, but they’re a start for people to see where they’re at.
So if I made a chart for myself, it’d look like this:
- 35: Saved $221,377
- 45: Saved $750,000
- 55: Saved $1,250,000
- 65: Saved $2,000,000
1) I’d DEFINITELY max out at around $250,000 a year for an income, and
2) my average income has actually been around $75,000, accounting for the fact that I’ve been working 2 out of the 5 years.)
I’m on track then.
I am also aiming to save $1,000,000.
I don’t think I need $2M, and it’d be nice to have, but I’m not going to kill myself for it.