How Much Should You Save for Retirement by Age?

Fidelity’s Age-Based Retirement Benchmarks

Fidelity Investments publishes the most widely referenced retirement savings benchmarks. Their guidelines are based on a 15% savings rate (including employer match), starting at age 25, with a target retirement age of 67.

These benchmarks assume you will replace about 45% of your pre-retirement income from savings, with Social Security covering the rest (roughly 40% for median earners). If you expect higher spending in retirement or lower Social Security benefits, aim higher.

How Fidelity’s Benchmarks Compare to Other Firms

T. Rowe Price uses slightly different assumptions and recommends saving 0.5x by 30, 3.5x by 40, and 7x by 55. J.P. Morgan suggests a range depending on your income level: higher earners need higher multiples because Social Security replaces a smaller percentage of their income.

Regardless of the exact numbers, all major firms agree on the direction: save as much as you can, as early as you can. The specific multiple matters less than having a target and tracking your progress.

The 25x Rule: Your Personal Savings Target

While salary multiples are useful benchmarks, the 25x rule gives you a more personalized target based on your actual retirement spending needs.

Formula:(Annual retirement spending − Social Security − Pension) × 25 = Your savings target

How It Works

The 25x rule is the inverse of the 4% safe withdrawal rate, which originated from financial planner William Bengen’s 1994 research. If you withdraw 4% of your portfolio in year one and adjust for inflation each year, historical data shows a 95% probability your money lasts at least 30 years.

Example Calculation

According to the Bureau of Labor Statistics’ 2024 Consumer Expenditure Survey, the average retiree household spends approximately $52,000 per year. However, spending varies significantly based on location, health, and lifestyle. Create your own target using our retirement calculator.

Where Americans Actually Stand

The gap between recommended benchmarks and actual savings is significant. According to the Federal Reserve’s 2025 Survey of Consumer Finances:

The median American in their late 50s has less than one-third of what Fidelity recommends. This does not mean retirement is impossible — but it does mean many Americans will need to adjust their plans through a combination of increased savings, delayed retirement, and reduced spending expectations.

Breaking Down Each Decade

Your 20s: Build the Foundation

Your 20s are the most powerful savings decade because of compound interest. Every dollar invested at 25 has 42 years to grow before age 67. At a 7% average annual return, $1 invested at 25 becomes approximately $18 by 67.

Priority actions:

• Enroll in your employer’s 401(k) and contribute at least enough to get the full company match (free money)
• Target saving 10-15% of your gross income, including the employer match
• If no employer plan is available, open a Roth IRA ($7,000 annual limit in 2026)
• Invest aggressively — at this age, you have decades to recover from downturns. A 90/10 stock/bond allocation is reasonable.

Your 30s: Accelerate Growth

By 30, you should aim to have 1x your salary saved. By 35, the target is 2x. This decade is when your savings start to visibly compound.

Priority actions:

• Increase your savings rate by 1-2% annually until you reach 15-20%
• Maximize your 401(k) if possible ($23,500 in 2026)
• Consider a Roth IRA for tax diversification in retirement
• Avoid lifestyle inflation: when you get a raise, save at least half of the increase

According to Vanguard’s 2025 How America Saves report, the average 401(k) contribution rate among workers in their 30s is 8.9% (including employer match: 13.1%). Ideally, aim for 15%.

Your 40s: The Critical Decade

By 40, the target is 3x your salary. By 45, it is 4x. This is the decade where many people face competing financial demands: mortgages, children’s education, aging parents. It is also the decade where catching up becomes urgent.

Priority actions:

• Do not reduce retirement contributions to fund college. Student loans exist; retirement loans do not.
• Review your asset allocation — a 70/30 to 80/20 stock/bond mix is appropriate for most people in their 40s
• If your savings are below the benchmarks, this is your last decade to fully harness compounding. Increase contributions aggressively.
• Consider paying off high-interest debt to free up cash flow for savings

Your 50s: The Catch-Up Decade

By 50, the target is 6x your salary. By 55, it is 7x. This decade benefits from the highest earning years for most people — and access to catch-up contributions.

Priority actions:

• Take full advantage of catch-up contributions: an extra $7,500/year in your 401(k) (total limit: $31,000 in 2026), plus $1,000 extra in your IRA (total: $8,000)
• From ages 60-63, the SECURE 2.0 Act allows an even higher 401(k) catch-up of $11,250 (total: $34,750)
• Begin modeling your retirement date — use our retirement calculator to test scenarios
• Get a personalized Social Security estimate at ssa.gov/myaccount

Your 60s: The Home Stretch

By 60, the target is 8x your salary. At 67 (full retirement age for most), the target is 10x.

Priority actions:

• Decide when to claim Social Security — each year you delay past 62 increases your benefit by 6-8%, up to age 70
• Shift to a more conservative allocation (50/50 or 60/40 stock/bond) as you approach your withdrawal date
• Build a cash buffer of 1-2 years of expenses to avoid selling investments during market downturns in early retirement
• Estimate healthcare costs: Fidelity’s 2025 estimate is $315,000 per couple for retirement healthcare

The Role of Social Security

Social Security is designed to supplement — not replace — your retirement savings. According to the Social Security Administration, the average monthly benefit for a retired worker in 2026 is approximately $1,976/month ($23,712/year). The maximum benefit at full retirement age is about $4,018/month ($48,216/year).

For the median earner, Social Security replaces about 40% of pre-retirement income. For higher earners, the replacement rate drops to 25-30%. This means your personal savings need to cover the remaining 60-75% of your retirement spending.

Should You Count on Social Security?

The Social Security Board of Trustees projects that the trust fund will be depleted by approximately 2033, after which the system can only pay about 77-80% of promised benefits from ongoing payroll taxes. This does not mean Social Security will disappear, but benefits could be reduced. A prudent approach is to plan as if Social Security will cover 75% of your projected benefit and save enough to fill the gap.

Healthcare Costs: The Hidden Retirement Expense

Healthcare is consistently the most underestimated retirement expense. According to Fidelity’s 2025 Retiree Health Care Cost Estimate, an average 65-year-old couple retiring today needs approximately $315,000 saved specifically for healthcare expenses. This covers Medicare premiums, supplemental insurance, copays, prescriptions, dental, and vision — but not long-term care.

Annual healthcare costs in retirement typically run $6,000-$12,000 per person (or $12,000-$24,000 per couple), increasing with age. If you retire before 65, you will need to purchase private insurance to bridge the gap to Medicare, which can cost $500-$1,500/month per person.

Catch-Up Strategies If You Are Behind

If you are behind the benchmarks, do not panic. These strategies can close the gap:

1. Maximize Tax-Advantaged Contributions

In 2026, the 401(k) limit is $23,500 (plus $7,500 catch-up at 50+, or $11,250 at ages 60-63). The IRA limit is $7,000 (plus $1,000 catch-up at 50+). A couple in their 50s can shelter over $78,000/year in tax-advantaged retirement accounts.

2. Increase Your Savings Rate Aggressively

Each 1% increase in savings rate on a $100,000 salary is $1,000/year. Over 20 years at 7% returns, that extra $1,000/year grows to approximately $41,000. Increasing from 6% to 15% adds $9,000/year, which compounds to roughly $369,000 over 20 years.

3. Delay Retirement by 2-3 Years

Each additional year of work provides three benefits: one more year of saving, one more year of investment growth, and one fewer year of withdrawals. According to a National Bureau of Economic Research study, working from 65 to 68 can improve retirement finances by 20-30%.

4. Reduce Expected Retirement Spending

If your savings target feels unreachable, reassess your spending expectations. Downsizing your home, relocating to a lower-cost area, or planning a phased retirement with part-time work can all significantly reduce the nest egg you need.

5. Consider a Health Savings Account (HSA)

If you have a high-deductible health plan, an HSA is a powerful retirement tool. Contributions are tax-deductible, growth is tax-free, and withdrawals for qualified medical expenses are tax-free. In 2026, the HSA contribution limit is $4,300 for individuals and $8,550 for families (plus $1,000 catch-up at 55+). After age 65, HSA funds can be used for any purpose (taxed as income, like a traditional IRA).

Frequently Asked Questions

How much should I have saved for retirement by age 30?

Fidelity recommends having 1x your annual salary saved for retirement by age 30. If you earn $60,000, that means $60,000 in retirement accounts. This benchmark assumes you started saving 15% of your income (including any employer match) at age 25. If you are behind, focus on increasing your savings rate as quickly as possible — compound interest will do most of the heavy lifting over the next 35 years.

What is the 25x rule for retirement?

The 25x rule says you need 25 times your annual retirement spending (minus Social Security and pensions) saved before you retire. It is the inverse of the 4% safe withdrawal rate. For example, if you expect to spend $60,000/year in retirement and Social Security covers $24,000, you need ($60,000 − $24,000) × 25 = $900,000 in savings. This rule provides roughly a 95% historical probability of not running out of money over 30 years.

Can I catch up on retirement savings if I started late?

Yes. Key strategies include: maximizing 401(k) contributions ($23,500 in 2026, plus $7,500 catch-up if 50+), using catch-up IRA contributions ($8,000 if 50+), aggressively increasing your savings rate by 1-2% annually, delaying retirement by even 2-3 years (which improves your finances by 20-30%), and considering working part-time in early retirement. Even starting at 40, saving 20% of a $90,000 income can accumulate over $850,000 by age 67 at a 7% average return.