It is a common understanding that the earlier you start saving for retirement, the better. The big question on the minds of many savers, however, is: “How much should I save?”. It’s difficult to know if you are ahead or behind. That’s why it’s important to establish solid benchmarks to identify the amount you should have in savings.

We’re taking a dive into the numbers you should abide by when saving for retirement. Keep in mind that everyone has a different lifestyle and varying financial goals. You may need to save more or less than these amounts based on your objectives and income needs. Here is a breakdown of how much you should save each decade of your pre-retirement life.

At Age 30, Can You Have the Equivalent of a Year’s Salary Saved?

Some 30-year-olds have the equivalent of a one year’s salary in debt. Scary but true. While this may seem uncomfortable, the good news is that you can manage debt along with saving and investing to build wealth at the same time. One way you can manage debt repayment and savings is to put away at least 15% of your income beginning at age 25. That assumes you start at 25 with no savings and adhere to this rule.

By the time you’re 30, your goal should be to have at least half of one full year of your current salary saved. If you’re ambitious, it should be one full year of your annual salary. If you start saving and investing earlier than age 25, then you’ll definitely be able to reach the recommended saving benchmark. Enlisting the assistance of a financial coach or financial advisor even at this age can be helpful. A financial advisor will help you create your 10, 20, and 30-year financial plan that will offer you guidance on how to best achieve your retirement savings goals.

While different outlets will recommend different rates, the best practice to keep in mind is to aim to contribute at least 20% of your current income to savings from age 25 to 30. Once you turn 30 you will want to increase that amount, contributing up to 25% of your yearly earnings by the time you’re 35.

At Age 40, Will Your Savings Be Triple That of Your Yearly Earnings?

The average American currently saves about 3.5% of his or her income. Can you save 3.5% of what you earn at 25 or 30 and build a six-figure retirement fund by your 40th birthday? If you are an absolute investing wizard or start your career with a salary north of $100,000 this may be possible. Otherwise, saving and investing 10-15% of what you earn every year will be crucial in reaching this goal. If you can’t save 25% of your income initially, saving 5% -10% -15% are also great starting points.

By the age of 40, it is advisable that you have a minimum of two times your current annual salary saved for retirement. By 45, you’ll want three times. The jump from two times to three times your annual salary saved in five years seems huge. However, chances are your 40’s will be a time in your career in which your years of hard work will start to pay off.

Take advantage of the increased pay by keeping your cost of living low and your investment into your savings and retirement funds high. While it may be tempting to indulge, try to keep your head in the game. We’re not saying you shouldn’t enjoy the fruits of your labor. However, keep your end goal in mind and practice spending in moderation. A financial advisor may be the perfect person to help you keep on track, and can serve as a voice of reason when temptation arises.

When You Are 50, Will Your Savings Be About Six Times Your Salary?

Slow and steady saving and investing could get you there but building up $250,000 or more in retirement money can be a challenge. You have to consider the numerous life factors that will affect your ability to save like your children’s education costs, divorce, periodic unemployment, or health concerns. One response is to adjust your discretionary spending habits if life allows. Much like we mentioned above, be wise about your purchases and use caution when spending. Your main focus should be to provide for your family while also putting an ample amount toward your retirement savings.

Depending on your income level, you’ll want to have between 4 and 7 times your annual salary saved for retirement. If your current annual income is above $150,000 per year, you will want to increase the amount you save. When it comes time to retire, Social Security will only replace a lower percentage of your pre-retirement income. You don’t want to have a false sense of security in what you will receive in these benefits. Make sure to maintain an understanding of what you will receive in Social Security benefits, to assure you’re saving appropriately.

At 60, Will Your Savings Equal Eight or Nine Times What You Earn Annually?

Your 60’s are the age in which you want to be the most aggressive about saving for retirement. It’s like the final song in a musical. You want to go big or go home (but, don’t go home, just go big). Amassing $500,000 or more in retirement assets, or 8 to 11 times your annual salary, should be a priority. Even if you have not managed this, other resources can help you generate retirement income in the years ahead. Remember that you will have Social Security benefits coming your way, possible home equity, and executive compensation/business proceeds to make your financial future more promising.

Again, it is crucial to understand the benefits you will receive in retirement, outside of your personal savings. You cannot overeducate yourself in this facet of your financial security and keeping a running pulse on this information is of the utmost importance.

If you’re unable to save 50% of your income, saving and investing at least 15% of your annual pay merits serious consideration.

Through recurring contributions to tax-deferred retirement savings accounts, you can make saving and investing a regular process. Your future self will thank you.

The Bottom Line

For some, it may be difficult to imagine the far off possibility of retirement. However, for most, reaching retirement age will soon be a reality. Just because you can’t fathom being retirement age, does not mean it will not happen. That is why it is so important for you to start saving and planning for retirement now. Even if you’re starting a little later if you have a solid plan in place and the determination to achieve your goals, catching up is possible.

Remember, if you’re feeling lost when it comes to retirement planning, you are not alone. Navalign Wealth Partners can help you navigate your savings goals and investments. Financial planners can create a tailored plan to achieve a comfortable retirement, so don’t hesitate to ask for help. Prioritize your future self and treat your retirement savings and investments with the importance they deserve. You’ve earned it.