Retirement savings by age is invariably tricky business.

Whether you like it or not, age plays a crucial factor.

It is essential to know whether you are ahead or behind the retirement savings curve.

This is the reason why retirement savings by age is considered an important element.

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Often this is that crucial factor that helps you assess the extent of your retirement savings appropriately.

In fact, often the trick and tips for retirement savings are closely linked to this factor.

After all, this is not just any savings but one of the most important financial goals for anybody.

Ideally this is your nest egg that will sustain you through ups and downs in your older days.

Retirement Savings by AgeThis is that kitty that will give you financial independence when you are no longer in a state to work.

It offers you that necessary confidence and means to live life your way after you retire.

But the trick is how you can tip the retirement savings scale in your favour.

Let’s face it; few start thinking about retirement in the late 20s or early 30s.

Mostly by the time, you start considering savings, you have passed your prime already.

That is why retirement savings by age becomes so crucial.

It gives you the confidence that it is never too late.

If you do a proper assessment, you can achieve your financial goals to a certain extent.

By the time you retire, the age by which you start the savings does not matter.

All that matters is the right amount of money is there at your disposal.

So we created this quick and convenient guide to help you glide through retirement with ease.

This is a handy retirement saving by age ready reckoner useful for all ages.

How Much Should You Save By Retirement?

The moment we discuss retirement savings by age, the critical concern is how much do you need.

The retirement savings amount will keep changing with age and your financial situation.

The 80% rule is perhaps the most pertinent.

Most financial experts believe that you must have at least 80% of your pre-retirement salary every year.

That means if you are earning around $100,000 just before retiring, you must be able to generate at least 80% of it.

That means your retirement income has to be around $80,000 annually.

That will make sure that you have a comfortable and well-provided life even after you retire.

Depending on the source of income and regularity of income, you may adjust this figure up and down.

It will also depend on the kind of lifestyle that you may choose to live after retirement.

Remember this is a ballpark figure.

It will change marginally depending on individual circumstances and situation.

The basic idea is to provide adequately for future necessities.

Most importantly, this savings has to be inflation adjusted.

That is exactly where retirement savings by age becomes very crucial.

But the question is how you make sure that you have $80,000 annually after retirement.

This is where the 4% savings rule comes to play.

This will give you a fair idea of the retirement savings you must have to generate the type of income you want.

Let us take the previous example of $80,000 annually.

Divide this amount by 4%.

So your nest egg has to be close to $2 million.

This, of course, assumes about 5% return on your investment and no scope of additional income.

But remember this is just a broad assumption.

The real needs may differ slightly depending on the variety of circumstances.

Average Retirement Savings Seen Thus Far

Now let us move from the realms of assumption into the reality.

It is a good idea to assess the average retirement savings by Americans.

That will give you a basic idea of how much you must have

We know that there is always one ideal savings limit.

But most times, this may be an uphill task for many.

The US Economic Policy Institute claims that the average retirement saving is well above $95,000.

But you must remember that almost half of US families do not have retirement savings.

The retirement super savers often boost the average number in this regard.

Perhaps the median retirement savings is a more realistic representation.

The median savings, in this case, is often as low as $5000.

Now that is a whopping $90,000 gap between the two numbers.

Probably it highlights the variations and differences in retirement savings trend in a conclusive fashion.

Different age groups have different savings habits.

But the good news here is whatever your age may be, there is always scope to save more.

We have broken down the average savings in an age-wise format.

This will help our readers how much they need to save and when.

The age wise formatting often helps to serve as a clarion call.

This will make sure that whatever age you may be, you can boost your retirement savings.

This, in many ways, will also help you estimate the tentative figures you have to keep in mind.

After all, retirement savings by age is creating a target based financial plan.

It makes sure you can fill up the savings gap in creating the appropriate nest egg at every level.

It is often the most realistic retirement savings plan for both professionals and business owners.

What Is the Ideal Retirement Savings by Age?

1. Ideal Limits for Those in the 20s

Most of us begin our careers in our mid to late twenties.

Most times savings is perhaps the last of the prerogatives.

There is that euphoria of income coming in.

Along with that individuals are struggling to balance low wages and huge student loan burden.

This is, after all, the millennium generation.

If you take a realistic retirement savings assumption, most estimates peg it around $30,000.

Most financial experts peg that at 25, they must save enough to make sure they have at least a year’s salary by 30 years.

According to the US Labor Bureau, the average salary of the 20 something is $40,000 plus annually.

This means that they may have to save close to 60-65% of their salaries as retirement savings.

That will make sure that they are definitely on track to save adequately for a decent nest egg by the end of their professional career.

Remember your savings will last you for at least 30 years after you retire.

So it is very important that you provide for your savings accordingly.

The average growth rate of your nest egg is around 5-6%.

This is taking into consideration only basic interest rate on savings.

It does not account for additional salary or heightened interest rates.

Those are always additional factors that can surely boost your savings to a large degree.

But the $30,000-31,000 is the key figure to take into consideration.

That amount will make sure that you provide for the nest egg appropriately at this stage.

2. Ideal Limits for Those in the 30s

This is a crucial phase in anyone’s life.

By the time you reach 30, you have been able to pay off most of the student loan.

Most importantly you learn how to negotiate salaries.

On an average, individuals start earning a lot more at this stage.

So they have a relatively higher amount of money that they can allocate to savings.

However, this is invariably also the age when they begin to consider settling down.

They get married and many have kids too.

Again, retirement savings is hardly on the priority list.

Marriage, house, children and their education is the predominant consideration.

But at the same time, remember even the smallest of savings can enhance the overall nest egg.

The stress should be creating effective savings habit.

Remember we spoke about the retirement supersavers skewing the balance, this is the age to get started.

Learn to create a budget and then stick to it in a holistic manner.

Create spending records to keep a careful track of every penny that you have spent.

The least that you can do is begin to match the 401(k) contributions.

That can go a long way in boosting the overall kitty.

Between the age of 32 and 37, the average savings hovers close to $32,000.

This amount increases dramatically as individuals move to their late 30s and approach early 40s.

Between 37 and 45 years of age, the salary and savings number sees a sudden jump.

The annual average salary spikes up closer to $68,000 as they approach closer to 40.

Now, this also has a relative bearing on the amount of desirable salary and what they can save.

So most experts say that by 35 individuals must have twice their annual salaries saved.

This is on the basis of various factors impacting savings

3. Ideal Limits for Those in the 40s

Now, 40s are one of the most crucial phases in an individual’s career.

The chances are your salary negotiation skills are at its zenith.

This also means you are earning a lot more than you ever did.

But the problem is that this is also a phase where your salary may be close to peaking.

You may be carrying a lot less debt and your salary is at the peak.

Therefore by the early forties, you must target at least 3 times your salary saved.

By the time you are forty-five, this amount needs to rise to 3.5x your annual salary.

But remember there are some crucial pressure points at this juncture.

Chances are your kids are graduating from school.

If you have not already provided for it, there is urgent need to address it.

The average salary at this juncture is around $67,000.

By late 40s, around 48-49 years the salary increases to over $80,000.

This is a crucial phase for individuals.

There is more money available and at the same time, you have time running out of hand.

On a monthly basis, if you apply the 80% or the 4% rule, you will still need to save 25-30% of your monthly salary.

That will hold you in good stead to work out a reasonable nest egg.

The actual savings rate of most Americans is much lower, barely 5%.

There is potential to save at least 20%.

So that is where the gap between average and median savings springs up.

Moreover, individual salaries and liabilities will also have to be accounted for.

On the whole, you can deduce that it will be a good bet to save anywhere between 20-25% of your salary.

This is often the make or break period in creating comfortable retirement savings.

4. Ideal Limits for Those in the 50s

The normal back of the hand calculation signals that by the time you are 50, you must have five times your annual salary.

You have already past the prime in terms of career and salary opportunities at that stage.

The only positive is at this stage, most of the liabilities are behind you.

The children are already pursuing their chosen career.

You may have already repaid your house loan, provided for children’s academic needs.

But this is also the stage where medical needs start taking precedence.

This is a phase where individuals begin to provide for their future medicare needs.

While you are in your early 50s, you may target 27% of your salary as retirement savings.

If you follow the retirement savings by age policy, this percentage reduces somewhat post 55.

Between 55-60years, individuals will have to target saving about 20-22% of their salary.

This is in many ways a phase when you can begin to take things a little easy.

If you have followed a decent savings graph thus far, you have a reasonable cushion to fall back on.

Another advantage is that post 50, you get an opportunity to supercharge your savings at this juncture.

You can even start making catch-up contribution in your 401(k) account.

As per targets set by financial experts, you need average $1 million retirement savings by the end of your 50s.

However, the real numbers are much lower.

On an average statistics indicate that the retirement savings at this age are closer to $164,000.

That is significantly lesser than what the experts suggest.

So 50s is practically your last chance to play catch-up on your savings.

This is the time you take stock and undertake whatever possible course correction.

Beyond this point, you may not get an opportunity to fill the gap.

5. Ideal Limits for Those in the 60s

When you are considering retirement savings by age, this is pretty much end of the road.

While you are in your early 60s, the average calculation points to 6 times your salary.

If you consider the median retirement age as 65, your savings have to continue at the same rate as your late 50s.

So target anywhere between 18-22% of your salary.

But remember the retirement savings amount that we have outlined thus far is the pre-tax amount.

It is also the time to take stock of the basic return on the savings you have done so far.

That will also have a bearing on the final nest egg.

Your late 60s is also the time that you have to start undertaking lifestyle changes.

The idea is to get used to a fixed income amount.

That means you do not sit back and relax with whatever you already have.

This is the time to explore every other opportunity to boost the retirement savings.

That is how you can make sure that you have a comfortable amount saved for your retirement days.

Taking a realistic perspective is very important at this juncture.

If at all there are options to boost your salary, this is perhaps the only opportunity left.


The numbers and percentages that I have offered here for creating retirement savings by age is an average.

Remember when it comes to savings and retirement nest egg, there is never a formula that fits all.

You have to take into account changing expense scenarios and differing lifestyle.

Moreover, no two people may be earning at the same rate.

You have to also account for social security money that will be added to your retirement savings.

But at the same time remember retirement savings by age is largely the pre-tax amount.

So you have to take steps to gradually add to your retirement savings.

Moreover, a systematic approach like retirement savings by age will ensure a comfortable nest egg.