The average retirement age in the U.S. has remained steady, ranging from 60 to 62, since 2012, according to a Gallup and MassMutual study. In 2023, the average retirement age was 62.
However, many people are working longer than before, with some continuing their careers well into their 70s.
Contrary to popular belief, there’s no one-size-fits-all answer to how much you should save for retirement. Money isn’t everything, and many people lead fulfilling lives on a modest budget. Still, it’s a good idea to evaluate your current financial situation and see if you’re on track for retirement. Here’s a guideline for how much you should have saved by the time you’re 67.
Let’s Ask the Experts
Fidelity Investments, the largest brokerage in the U.S., with 15.3 million individual retirement accounts and nearly 24 million 401(k) participants in the first quarter of 2024, is well-versed in retirement savings.
Fidelity recommends saving about 10 times your pre-retirement income if you plan to retire at 67. For example, if you earn $100,000 per year, you should aim for around $1 million in savings. This estimate is based on the assumption that you save 15% of your income annually starting at age 25, including employer-matched contributions and investing half of your savings in stocks.
Fidelity also provides savings milestones to help you stay on track:
- Age 30: 1x your salary
- Age 40: 3x your salary
- Age 50: 6x your salary
- Age 60: 8x your salary
- Age 67: 10x your salary
It’s important to note that these are guidelines, and Fidelity acknowledges that your savings target may vary depending on your lifestyle.
For example, if you plan to live in a more affordable home and stick to a tighter budget, saving 8 times your salary might suffice. However, if you envision a lavish retirement with travel and a beach house, you might need to save 12 times your salary or more.
2 Tips to Max Out Your Retirement
To maximize your retirement savings, start investing early and make regular contributions. Warren Buffett, one of the most successful investors ever, attributes much of his success to his long-term investment strategy. He often says, “Our favorite holding period is forever.”
Consider this: If you invest $1,000 initially and add $500 annually, with a 10% annual return (similar to the S&P 500), here’s how your investment would grow by age 67:
| Age | Value at 67 |
|---|---|
| 20 | $524,185 |
| 30 | $199,023 |
| 40 | $73,660 |
| 50 | $25,327 |
| 60 | $6,692 |
The key takeaway: start investing young, and contribute consistently—even $500 a year (about $42 a month) can make a significant difference over time. Many retirement accounts also offer tax advantages.
The second tip is to make the most of Social Security. In September, retirees received an average monthly check of $1,921.50 ($23,058 annually). By delaying benefits until age 70, you can increase your monthly payout to as much as $5,108 ($61,296 annually). While it’s difficult to reach the maximum payout, the longer you wait, the higher your benefits will be.
By starting your investments early and waiting as long as possible to claim Social Security, you can significantly boost your retirement savings by age 67.