How Much Should You Save for Retirement at Your Age?
Choose the category that fits you and find guidelines for your retirement savings goal by age and income.
Long Way to Go
I'm in my 20s and 30s or I have 30 to 40 years before retirement.
Well on My Way
I’m in my 40s and 50s or have 10 to 20 years before I retire.
The Countdown is On
I’m in my 60s and/or retirement is getting close (10 years or less).
Enjoying Retirement
I’m already in retirement and income is my biggest need.
Some financial planners suggest you put 5-to-20% of your income toward retirement each year, depending on your age. As you get closer to retirement, your savings should multiply along with your income. Are you finding this harder to do with recent market uncertainty and fears of a recession? Wondering how much to have saved at each age? Not sure where to start?
While those guidelines may seem like lofty goals, remember that your retirement savings might include more than just your contributions. Money from employer retirement plan matches, smart debt repayment and windfalls (such as bonuses, tax refunds and inheritance) can also put you ahead for retirement.
Want to see how you’re doing? We’ve got smart retirement savings tips, goals and checkpoints for any age and income level.
Long Way Until Retirement
Retirement may seem so far away that it’s hard to imagine. But there are some guidelines to help you know how much to save now, and how to do it if you’re not quite there.
How Much to Save in Your 20s
Savings Goal: 5-10% of your annual income
Savings Checkpoints: 0.5x-1x your annual salary by age 30
How Much to Save in Your 30s
Savings Goal: 10-15% of your annual income
Savings Checkpoints: 2x-3x of your annual salary by age 40
How to Get There
Start early and establish good investing habits
If you’re under 40, you still have many years to contribute toward your retirement and handle the ups and downs of the financial markets. Starting early can help you make the most impact at this stage of your working life. (Not sure if you’re saving enough? Get even more tips to boost your savings in your 20s and 30s.)
Invest the match
If your employer matches your workplace retirement plan contributions, make sure you meet the minimum for the match.
3% of your own contributions + 3% employer match = 6% invested each pay period
Bump up contributions
As you get older, your financial obligations might increase—but so could your income. Even if you already contribute a specific percentage of each paycheck to your employer’s retirement plan, many plans offer automatic annual increases (in 1 percent increments, for example). Opt in for a hassle-free way to increase your contributions.
Don’t have an employer plan? Learn more about different types of IRAs to invest on your own. And if you’re self-employed, workplace plans like SEP IRAs offer a way to save and get tax deductions for your business.
Balance debt and savings
You may find that paying off higher-interest loans might be more of a priority than extra retirement contributions. But if you have a lower rate on your loan, the return on your investments over time has the potential to offset any interest payments you’re making.
Learn more retirement savings hacks.
How do you know if you’ll be ready for retirement?
Find out whether you and your finances are ready for the transition.
The Countdown to Retirement Is On
With retirement less than 10 years away, you don’t want to stop saving. And in your 60s it’s a good time to plan when to take Social Security and how your portfolio may need to change for life after the job.
How Much to Save in Your 60s
Savings Goal: 20+% of your annual income, or as much as you can afford
Savings Checkpoints: 9x-10x annual salary by age 67
How to Get There
Make the most of your final savings years
These retirement savings tips for your 60s and beyond may help as you near the finish line.
Add, don’t subtract
Even if you can withdraw from retirement plans and IRAs at 59½, try to avoid it. Instead, continue to add to your IRAs and retirement plan as long as you still have earned income (no more age 70½ cutoff for traditional IRAs) and up to the maximum contribution limits, if possible.
Get your full benefits
Working a little longer will give you more time to save for retirement—and may help you increase your wages to maximize pension or Social Security benefits.
For example, if your full retirement age is 67, your Social Security benefit is reduced by 30 percent if you apply for benefits at 62. If you wait until 70, your benefit will increase by 24 percent.
Source: Social Security Administration. Full retirement age (FRA) is 67 for those born after 1960. For those born between 1937 and 1960, FRA is 65 plus two months for each year after 1937.
Look for extra contributions
You can use raises, bonuses, tax refunds, inheritance and settlements to boost retirement savings. Investing a lump sum can have its advantages; not only will you avoid spending the money right away, it may grow and compound over time.
Watch your investment mix
Keep an eye on how your retirement assets are invested as you approach retirement. While a more aggressive portfolio may seem attractive for the potential gains it may offer, you're also taking on additional risk. Too much volatility at this stage may make it difficult to recoup losses.
IRS Circular 230 Disclosure: American Century Companies, Inc. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with American Century Companies, Inc. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.
This information is for educational purposes only and is not intended as tax advice. Please consult your tax advisor for more detailed information or for advice regarding your individual situation.
You could lose money by investing in a mutual fund, even if through your employer's plan or an IRA. An investment in a mutual fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
Please consult your tax advisor for more detailed information regarding the Roth IRA or for advice regarding your individual situation.
Taxes are deferred until withdrawal if the requirements are met. A 10% penalty may be imposed for withdrawal prior to reaching age 59½.
Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.
This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.
