Retirement Savings Benchmarks: How Do You Stack Up Against Your Peers?

1. Understanding Retirement Savings Benchmarks

When planning for retirement in the U.S., it’s natural to wonder: “Am I saving enough compared to others my age?” That’s where retirement savings benchmarks come in. These benchmarks are guidelines showing how much money you should ideally have saved at different points in your career. They help you see if you’re on track—and give you a clear target to aim for.

What Are Retirement Savings Benchmarks?

Retirement savings benchmarks are reference points based on age, income, and lifestyle goals. Think of them as checkpoints on your journey to financial security in retirement. Major financial firms, like Fidelity and Vanguard, regularly publish suggested savings milestones that many Americans use to measure their progress.

Why Do These Benchmarks Matter?

They provide motivation and a sense of direction. Rather than guessing or feeling lost about your future, benchmarks let you compare your savings with what experts recommend for someone in your situation. This helps you make informed decisions about how much more you need to save, and whether you need to adjust your spending or investment strategy.

How Are They Set?

Benchmarks aren’t random—they’re typically based on:

• Age: The older you get, the more you should have saved.
• Income: Recommendations are often expressed as multiples of your current annual salary.
• Lifestyle Goals: If you plan to travel a lot or retire early, your benchmark might be higher.

Sample Retirement Savings Benchmarks by Age

This table gives a general idea—if you’re 40 and earning $60,000 per year, ideally you’d have around $180,000 saved for retirement. Remember, these are just guidelines; everyone’s situation is unique based on spending habits and retirement dreams.

2. How Much Should You Have Saved at Every Age?

When it comes to retirement planning, understanding how much you should have saved at different stages of life is key. In the U.S., financial experts and institutions like Fidelity, Charles Schwab, and Vanguard offer general guidelines to help you track your progress compared to others in your age group. Remember, these are just benchmarks—everyone’s situation is unique, but they can give you a helpful frame of reference.

Retirement Savings Milestones by Age

Below is a breakdown of recommended savings targets by decade. Most major financial institutions base these numbers on your annual salary. For example, Fidelity suggests aiming for a certain multiple of your income saved by specific ages:

Your 20s: Building the Foundation

This is the decade to start saving—even small amounts matter. Aim to contribute enough to get any employer match in your 401(k) or similar plan. The main goal is to develop good savings habits early.

Your 30s: Gaining Momentum

Try to have at least one year’s worth of salary saved by the time you turn 30. Keep increasing your contributions as your income grows. Consider opening an IRA if you haven’t already, and review your investment allocation to make sure it matches your long-term goals.

Your 40s: Accelerating Savings

This is often when people hit their peak earning years. By 40, shoot for three times your annual salary saved. Take advantage of catch-up opportunities if you’re behind, and keep an eye on lifestyle inflation so that increased spending doesn’t eat into potential savings.

Your 50s: Fine-Tuning Your Plan

Aim for six times your salary by age 50. This is a good time to reassess retirement goals, adjust investment risk levels, and consider making catch-up contributions allowed by the IRS if you’re over 50.

Your 60s: Final Prep for Retirement

By age 60, the target is eight times your annual salary. As you approach retirement (around age 67), try to reach that ten-times milestone. Begin thinking about when to claim Social Security and how you’ll transition from saving to spending.

3. Comparing Yourself to National Averages and Your Peers

Ever wonder how your retirement savings stack up against other Americans? You’re definitely not alone! Let’s break down the latest stats so you can see where you stand—whether you’re just starting out or already have a nice nest egg growing. We’ll look at averages by age, income, industry, and even region so you can get a clear picture.

Retirement Savings by Age Group

Knowing what others in your age group have saved can help you set realistic goals and understand if you’re on track. Here’s a snapshot of the average retirement savings by age bracket:

Savings Benchmarks by Income Level

Your income plays a big role in how much you’re able to save for retirement. Here’s how savings typically compare across different annual income levels:

How Industry Affects Retirement Savings

The type of work you do also impacts your savings habits. Certain industries offer more generous 401(k) matches or pensions. Here are some general trends:

• Healthcare & Education: Often have steady pension plans and higher participation rates.
• Tech & Finance: Tend to have higher salaries and employer matches, leading to bigger nest eggs.
• Retail & Hospitality: Lower average savings due to less access to employer-sponsored plans.

Regional Differences in Retirement Savings

Your location matters too! Cost of living and local wages affect how much folks can save. For example, people living in the Northeast and West Coast often report higher average balances than those in the Midwest or South.

A Friendly Reminder: Everyone’s Journey Is Different!

If your numbers don’t match the charts exactly, don’t stress—it’s just a benchmark. The most important thing is that you keep making progress toward your own retirement goals. Keep tracking your savings and stay motivated!

4. Factors Affecting Retirement Savings

Cost of Living Differences

One of the biggest reasons Americans save at different rates is the cost of living in their area. If you live in a big city like New York or San Francisco, everyday expenses—like housing, groceries, and transportation—are much higher than in smaller towns or rural areas. This can make it tougher to set aside money for retirement, even if your salary is higher.

Employer-Sponsored Retirement Plans

Having access to a 401(k) or similar plan through your job makes a huge difference. Many employers match contributions up to a certain percentage, which is basically free money for your retirement. But not everyone has this benefit—gig workers and small business employees may have to save on their own, which can be harder without automatic payroll deductions or employer matches.

Debt Burden

Student loans, credit cards, car payments—debt can eat into your monthly budget and leave less room for saving. Younger adults often struggle with student debt while older adults might still be paying off mortgages or helping kids with college. Prioritizing debt payments sometimes means putting retirement savings on the back burner.

Financial Literacy and Confidence

Understanding how retirement accounts work—and feeling confident about investing—can be just as important as how much you earn. People who know more about financial planning are likely to start saving earlier and take advantage of tools like IRAs or Roth accounts. Unfortunately, financial education isnt always taught in schools, so many Americans feel unsure about where to begin.

Key Influences at a Glance

The bottom line: How much you’ve managed to save for retirement depends on lots of moving pieces—from where you live to what benefits your job offers, your debt situation, and how comfortable you feel managing your money. Understanding these factors can help you spot opportunities to boost your own savings over time.

5. What To Do If You’re Behind (or Ahead) on Savings

Action Steps If You’re Playing Catch-Up

If you’ve checked the retirement savings benchmarks and realized you’re not where you want to be, don’t panic—there’s still plenty you can do. Here are some practical moves to help get back on track:

1. Max Out Your Retirement Accounts

• Contribute as much as you can to your 401(k), especially if your employer offers a match—this is free money.
• Don’t forget about IRAs. For 2024, you can contribute up to $7,000 ($8,000 if you’re 50 or older).

2. Take Advantage of Catch-Up Contributions

If you’re 50 or older, the IRS lets you put extra into your retirement accounts each year. Here’s what that looks like:

3. Revisit Your Budget

• Cut unnecessary expenses and redirect those funds toward retirement.
• Even small increases in contributions can add up over time thanks to compounding.

4. Consider Delaying Retirement

• The longer you work, the more time your investments have to grow.
• You’ll also boost your Social Security benefits by delaying claims past age 62.

If You’re Ahead: Make the Most of Your Lead

If you’re ahead of the curve—congrats! Here’s how to keep your momentum going and make sure you’re getting the most out of your advantage:

1. Diversify Investments Further

• Look beyond just stocks and bonds; consider real estate or even alternative assets if it fits your risk tolerance and goals.
• Rebalance your portfolio regularly to stay aligned with your target allocation.

2. Optimize Tax Strategies

• Consider Roth conversions for tax-free withdrawals in retirement.
• If you have a high income, look into backdoor Roth IRAs or a taxable brokerage account for additional investing opportunities.

3. Plan for Legacy and Charitable Giving

• If you’ve surpassed your own retirement needs, start thinking about how to pass wealth on efficiently or support causes that matter to you.
• A donor-advised fund or setting up a trust might be worth exploring with a financial advisor.

Your Next Steps: Stay Flexible & Informed

No matter where you fall compared to retirement savings benchmarks, the key is to stay proactive and adjust as needed. Regularly review your progress and adapt your plan so you’re always moving toward your goals with confidence.