In Money

Saving for retirement: Start sooner, or save longer

  • A typical person in the U.S. nearing retirement has less than $100,000 saved.
  • If you start at 25, you will cut your savings rate by about two-thirds (versus someone who starts later).
  • If you start at 45, you can cut your savings rate by about the same rate, if you work until you’re 70.

Talk about a reality check!

I’m rather shocked at the average person nearing retirement only having about $100,000 saved, but it also doesn’t surprise me that much.


How much do you need to have saved for retirement so far?

The average metrics are:

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.

Read more about what those retirement numbers mean in real salary dollars here.

If you haven’t reached those numbers, you need to start ASAP and/or you need to save for much longer (depending on where you are on the age scale).

Never too late.

Some more retirement posts:

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Sherry of Save. Spend. Splurge.

Am my own Sugar Daddy. Am a millionaire at 36 after getting out of $60K of student debt in 18 months, a little over a decade earlier, using I have worked 50% of my career (taking 1-2 year breaks), and quadrupled my income within 2 years of graduating, going from $65K to $260K with an average lifetime savings rate of 50%. I have 11 side incomes that are on track in 2020 to make me $50K - $75K. I could retire today if I wanted, but love my work-life balance as a freelancing consultant in STEM (Science, Technology, Engineering, Math). I am all about balance - between time and money, and also enjoying my money. I also post daily on Instagram @saverspender.

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