Retirement Benchmarks by Age: How Much Should You Have Saved?

You might be wondering how to hit those retirement savings benchmarks by age that financial experts always talk about. What are the recommended goals to hit in your 20s, 30s, 40s, 50s, and beyond? And more importantly, how can you actually get there? At Sound Credit Union, we understand that these questions can be overwhelming to think about, and we are here to help ease the stress.

This retirement guide will break down the benchmarks, show you the average savings by age, and share practical retirement planning advice to help you build the future you want.

What are Retirement Benchmarks by Age?

The most commonly cited benchmarks come from Fidelity Investments. They suggest you should aim to have saved:

• By age 30: 1x your annual income
• By age 40: 3x your annual income
• By age 50: 6x your annual income
• By age 60: 8x your annual income

For example, if you’re earning $50,000 a year at age 30, the benchmark would be $50,000 saved. At 40, if you’re earning $70,000, you’d aim for $210,000 saved. These numbers increase with your salary because your lifestyle often rises along with your income.

These benchmarks can feel daunting, but remember you’ve got time and the power of compound interest on your side.

What If You’re Behind on Savings?

If you’re not where you want to be, you’re in good company. According to Bankrate, 57% of American workers feel like they’re behind on their retirement goals. The good news? With the right retirement planning advice, you can still make progress. Even small changes in how you save and invest can help you close the gap.

Best Ways to Save for Retirement

Here are some of the most effective ways to build savings and hit those benchmarks:

1. Employer Sponsored Plans (401k)

For most people, a 401(k) is the single most powerful tool for hitting retirement benchmarks by age. These accounts are designed for long-term savings and often come with employer contributions that give your retirement balance a huge boost. If your employer offers a 401(k), start there.

In 2025, contribution limits are:

• Under 50: Contribute up to $23,500
• Age 50–59: Contribute up to $30,500
• Ages 60–63 (and 64+): Contribute up to $34,750

The real advantage of a 401(k) comes from tax benefits and employer matches:

• Contributions are made with pre-tax dollars (if traditional), which lowers your taxable income.
• Your money grows tax-deferred until withdrawal in retirement.
• Many employers match a percentage of your contributions, typically 3–6% of your salary. Not taking full advantage of this match is like leaving free money on the table.

401(k) Retirement Planning Advice

• If you’re just getting started, contribute at least enough to earn the full match.
• If you’re further along, aim for 10–15% of your income, working toward the annual maximum if possible.
• Over time, as raises or bonuses come in, “bank” them by increasing your contribution rate, this is one of the best ways to save for retirement faster without feeling the pinch in your day-to-day budget.

Most 401(k) plans include an employer match. Always contribute enough to get the full match; it’s essentially free money and the best way to save for retirement faster.

2. Health Savings Accounts (HSA)

A health savings account is one of the most underutilized retirement savings tools, but it can be incredibly powerful if you qualify. To open one, you need to be enrolled in a high-deductible health plan (HDHP).

Here’s why HSAs are unique: they offer a triple tax advantage:

1. Contributions are tax-deductible.
2. Funds grow tax-free.
3. Withdrawals are tax-free when used for qualified medical expenses.

After age 65, you can withdraw funds for any purpose without penalty (though non-medical withdrawals will be taxed as income). That effectively makes an HSA work like a traditional IRA, while still keeping the option of using it for medical costs along the way.

HSA Retirement Planning Advice

• Treat your HSA like a supplemental retirement account by contributing the max each year and investing the balance rather than leaving it in cash.
• If possible, pay current medical expenses out of pocket instead of tapping your HSA. This allows the account to grow long term.
• In retirement, you’ll be glad you have this extra pot of money since healthcare is one of the largest expenses retirees face.

While your HSA probably won’t cover all your retirement needs, it can play a helpful supporting role alongside your 401(k) and IRA.

3. Individual Retirement Accounts (IRA)

If you don’t have access to a 401(k), or if you simply want to save more, an IRA is your next best option. These accounts are available to anyone with earned income, and they come in two main flavors: Traditional IRA and Roth IRA.

Contribution limits for 2025 are:

• Under 50: Contribute up to $7,000
• Age 50+: Contribute up to $8,000

Traditional IRAs give you a tax deduction now, while Roth IRAs allow your money to grow and be withdrawn tax-free in retirement.

Traditional IRAs:

With a Traditional IRA, the money you put in may lower your taxable income for the year, which means you could pay less in taxes now. Your savings then grow without being taxed along the way. When you retire and start taking the money out, those withdrawals are taxed as regular income.

Roth IRAs:

With a Roth IRA, you don’t get a tax break upfront because you’re contributing money you’ve already paid taxes on. The big benefit comes later: your savings grow tax-free, and you won’t owe any taxes when you withdraw the money in retirement. Plus, unlike other retirement accounts, Roth IRAs don’t force you to take money out at a certain age, so you have more flexibility to decide when and how to use your savings.

IRA Retirement Planning Advice

• If you expect to be in a higher tax bracket in retirement, a Roth IRA often makes more sense.
• If you need the tax break now, a Traditional IRA may be better.
• If your income is too high for Roth contributions, you can use the “backdoor Roth IRA” strategy to still benefit from tax-free growth.

Together with your 401(k), an IRA helps you diversify your retirement savings and makes it easier to reach those all-important retirement benchmarks by age.

How Much Do I Need to Retire?

A common rule of thumb is to save 15% of your annual income. If you consistently hit this mark, you’ll likely get close to the retirement benchmarks by age. But life isn’t always predictable, so if you can, “over-contribute” in good years by maxing out accounts or adding to a brokerage account. This flexibility gives you a cushion and helps you stay on track even if some years are leaner.

How to Save for Retirement: Strategies to Boost Savings

• Bank your raises and bonuses: We understand, it’s tempting to spend a raise or bonus on something fun, like a vacation, new car, or upgraded lifestyle. But if you put that extra income directly into your retirement account, you’ll hardly miss it because you were already living on your old salary. Over time, these “found dollars” can make a huge difference in how quickly you reach your retirement benchmarks.
  • For example, redirecting a $3,000 bonus into your 401(k) could turn into tens of thousands of dollars by retirement thanks to compound growth.
  • This is not to say that treating yourself is not important; it is truly all about balance and budgeting.
• Negotiate your salary: Asking for a raise or negotiating a higher starting salary at a new job isn’t just about having more spending money; it’s also one of the most effective ways to boost your long-term savings. Even a small increase, like 3–5%, can add thousands to your retirement balance if you consistently save the extra income.
  • Use online tools like Glassdoor or Payscale to research what others in your field earn, and prepare your case by highlighting your contributions, achievements, and value to your employer.
• Automate your savings: One of the best ways to make saving painless is to set it on autopilot. Many retirement plans let you schedule automatic contributions from your paycheck. Better yet, you can set them to increase by 1–2% every year, often timed with your annual raise, so your savings rate grows without you feeling the pinch. This “set it and forget it” approach keeps you moving toward your retirement goals without relying on willpower or constant reminders.
• Stick to a realistic budget: A budget doesn’t have to be restrictive; it’s just a plan for where your money goes. The key is to make it realistic so you can actually follow it. If you set savings goals that are too aggressive, you may feel discouraged and give up altogether. Instead, aim for balance:
  • Cover your essentials
  • Allow yourself some spending money
  • Carve out room for retirement contributions. Even small, steady progress is better than big, unsustainable changes. Over time, consistency will get you much closer to your retirement targets than short bursts of over-saving followed by burnout.

Want to see how you’re doing today? Try Sound Credit Union’s Retirement Score tool to measure your progress and get personalized guidance.

Retirement Planning Advice: Stay Encouraged

It’s easy to compare yourself to the average savings by age, but remember that benchmarks are guidelines, not absolute requirements. If you’re behind, don’t panic. Focus on what you can control: earning more, saving more, and investing wisely.

Celebrate small wins along the way and keep your eyes on the long-term goal. Retirement planning isn’t about perfection; it’s about consistent progress. You don’t have to do it alone: Sound Credit Union is here to help you plan, save, and stay on track. Contact us today for support.