Katherine Tierney, CFA®
Senior Retirement Strategist, Client Needs Research
- Deciding how much to save for retirement can be confusing.
- Average savings benchmarks can show how you compare with others in your age bracket, but not how prepared you are to meet your individual needs. Determining that will require different tools and benchmarks.
- Your financial security after retirement will be unique to you: It will depend on things you control, such as spending habits and savings and things you don’t, such as financial market volatility and tax rates.
- To help you get started on an effective long-term strategy, we’ve calculated broad estimates of how much you should have saved during each decade of your career.
How much should I save for retirement?
The bottom-line goal of retirement planning is deceptively simple: accumulating enough money to live the life you want once your career is no longer occupying most of your time or generating a regular paycheck.
Achieving that goal requires asking questions that have no easy answers: How much money will you need? How can you measure your progress toward a target decades in the future?
A financial advisor can help you with those questions, then tailor a financial strategy to help you meet your individual goals.
Often, people trying to figure out how well they’re doing begin by comparing their own savings with those of others in the same age bracket. If you’re curious how you stack up, data collected by the Federal Reserve in its 2019 Survey of Consumer Finances, shown below, can tell you. What those numbers can’t do, though, is tell you how close you are to your goal.
Using them as a gauge is a little like comparing your SAT score with the average of your graduating class in high school to determine whether it’s high enough to get you into a particular university.
The one piece of data that’s crucial is the average SAT score of the freshmen the university admitted. Without that data point, you have no idea whether your score meets the institution’s standards.
Average retirement savings by age