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How Much Money Should I Have Saved? (By Your Age)

Updated: Nov 3, 2020

The recent pandemic has taught the world the importance of savings and emergency funds. If the current situation has also made you wonder how much should I have saved right now so I can retire worry-free, then keep on reading.

It’s important to keep tabs on your savings to know if you’re on the right track or not. In this blog, we’ll discuss how much you should try to have saved at each age.

Factors Affecting Your Saving Goals

It’s hard to put a number to an age as far as how much you should have saved considering all the variables such as:

1. Your location: where you live heavily affects how much you’ll need when you retire. So for example, if you live in New York and want to stay there after retirement, you’ll need a lot more saved up as compared to if you live somewhere in the midwest.

2. Pension: Are you going to have a pension when you retire? If you do, you’ll need much less savings as compared to someone who does not have a pension.

3. Lifestyle: Everyone has a different standard of living. If you live an expensive lifestyle where it takes you $12,000 per month to get by, you’ll need to save much more than someone who lives on $4,000 per month.

4. How you’re currently saving: Another variable can be how you’re saving your money right now. If you have all your money saved up in traditional 401k or traditional IRAs, you need to save more than someone with a Roth 401k or Roth IRA.

How Much Should You Have Saved at Each Age

As we know there are a lot of factors affecting how much money you should have saved. But still, it is a good thing to discuss what a good number could look like according to your income, expenses, and goals.

In Your 20s

According to Fidelity, the average 401k balance for people in their 20s is $11,800, and the median balance is $4,300.

If you’re in your 20s and you start saving aggressively during this decade, you put yourself in such a great position going forward.

In your 20s, you have a lot of time left to take advantage of the compounding effect where your money can grow multiple times.

Just getting started and learning to save a big percentage of your income each and every month will set you up for long term success. This would put you ahead of most of the people in your age group, considering most don’t even start thinking about retirement or saving money for their future at this time.

Remember, it’s a critical decade that decides how the rest of your life is going to play out, and if you don’t get serious about your finances right now, it’ll be much harder down the line.

In Your 30s

Let’s take a look at how people in their 30s are doing with their savings. The average 401k balance is $42,400 and the median balance $16,500. So we can see the numbers getting better but it is still not very pretty.

Fidelity says that at age 30, you should have at least half of your salary saved. So if you’re making $70k in a year, you should have at least $35k in your retirement accounts.

I like to calculate it a different way. I think it is better to look at it in terms of your living expenses. In my opinion, you should have at least one time of your living expenses saved. So if your cost of living is $5,000 a month, a good number to have saved up is $60,000.

Also, by thirty, its good to start thinking about how much you will need for retirement, how much you should contribute, and how much you must save from this point forward.

So let’s play with some numbers and let’s assume that you wanna retire at 63, 33 years from now. So first, before you plan how much you would need, one thing to keep in consideration is the inflation rate. 33 years from now, you would need a lot more to live the same standard of life that you’re living today.

If you are currently 30, a nice goal to shoot for in retirement is $2 million. Now if you think that sounds high, then here’s a fact for you, 33 years from now $2 million would be equivalent to today’s $750k due to inflation.

How much money should a 30 year old have saved

So let’s see what it would take you to hit that goal. Let’s say you’re thirty and at the moment, you have saved $25,000 in your retirement account. You’re investing aggressively and getting a 7% rate of return over the next 33 years. Doing the math would tell you that you need to save $14,000 per year to hit $2 million by 63.

If you increase the current savings to $50,000, then the number of yearly savings drops down to $12,000 per year with the same ROI. However, if you can increase the return by just 3% to 10% per year, the number of $12,000 drops down to just $3,400 per year. So that’s kinda eye-opening in itself. The truth is though that most investors do not come close to a 10% return over the long run. 7% is a much more realistic number and even that is hard to achieve.

In Your 40s

For people in their 40s, Fidelity says you should have at least 2x of your salary saved. But again, I think it’s very low. You should have at least 4x of your annual expenses saved in your retirement account. If it takes $60,000 per year for you to live, you should at least have $240,000 saved up.

Now if you’re 40 years old and have saved next to nothing, then don’t feel bad about yourself. The goal isn’t to make you feel bad but to open your eyes. Remember, better late than never!

So we said for the 30s that the goal would be to hit about $2 million by retirement, but if you’re a 40-year-old, the goal comes down to about $1.5 million just because you would have 10 fewer years of inflation.

So let’s get to the numbers. Say you’ve been good with your savings so far and have nearly $250k saved already. With a 7% rate of return, you would just need to save $6,000 per year to hit $1.5 million by 63.

How much money should a 40 year old have saved

But let’s say you have only about $100k in savings, then you would need to save $19,000 annually at 7% ROI to reach the $1.5 million mark at the time of retirement.

In Your 50s

Its the last decade you have before you retire, which makes it a crucial time. You need to really juice it up and max out retirement accounts during this decade. According to Fidelity, you should have 4x of your income saved, but I believe you should have at least 8x of your annual expenses saved up.

If you’re 50 years old, then your retirement goal comes down to $1.1 million since again, 10 years less of inflation.

So let’s say you’ve done a very good job and saved around $500k in your retirement accounts by 50 years old. With a 7% rate of return, you don’t need to save anything and you would end up with $1.2 million by the age of 63, due to the compounding effect of that 7%. Nice!

How much money should a 50 year old have saved

But if you’re 50 and have about $250k saved at that point, then it's gonna be a struggle because you would have to save $23,000 per year if you wanna hit the number of $1.1 million.

By 60

If you’re 60 or around that age, then you’re right up against it. It is the time when most people hit the accelerator by increasing their savings, 401k contributions, and investments to try to plow money in before calling it quits.

If you want to retire by 63, then ideally, you should have about 12x of your annual living expenses saved up in retirement accounts by this time. If you don’t then there are several options like catch-up provisions where you can increase contribution to 401k and IRAs but really, the key is to start saving at an early age.


That is it for this one. To conclude, I’d say that it is always better to save or invest money no matter what your age is. If you want to retire and want to have a nice retirement, it is important to start saving as early as possible. But even if you missed that chance, remember late is always better than never.

Make sure to head over to to learn about joining our membership program where you can work 1-1 with me and start your journey of becoming great with money!


Rich McCormack, CFP®


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