Saving for retirement has become increasingly challenging as the cost of living rises and life expectancy increases as well. There’s no one-size-fits-all approach to retirement. Some people like to live on less and are happy being able to afford the necessities, while others aspire to buy second homes and regularly travel.

Regardless of your preference, it’s important to identify your goals as soon as you can — even if they will undoubtedly change over time — so you can start working to achieve them. Knowing where you should stand at your age can be helpful as you plan for retirement. Based on available data and expert knowledge, here’s how much retirees should have invested by age 65, as well as how much the average person actually has in their retirement accounts.

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What the pros say

The massive investment firm Fidelity, which oversees trillions in funds set aside for retirement, bases how much someone should save for retirement on their annual salary. Fidelity believes people should save one times their annual salary by age 30, two times their annual salary by age 35, and so forth.

Image source: Getty Images.

By age 60, Fidelity believes retirees should have saved eight times their salary and then 10 times their salary by age 67. So, if you retire at 67 and were making $100,000 per year, that means you should have $1 million saved. Fidelity uses a few assumptions within this rule, including people saving 15% of their income annually starting at age 25, investing more than 50% of their savings in stocks over their lifetime, and maintaining a similar lifestyle as they did before retirement.

Of course, best practices often differ from reality. Luckily, there’s data showing how much people have actually saved at various points throughout their lives.

Here is the average balance in individual retirement accounts (IRAs) by age at the end of 2024, according to Fidelity.

Data source: Fidelity Investments

These are wide age ranges, but they suggest many people are either unable or unwilling to meet Fidelity’s recommended savings benchmarks. IRA balances also don’t necessarily include all of someone’s assets. People often have brokerage accounts or real estate that has significantly appreciated.

Now, let’s take a look at average balances for 401(k)s, which are employer-sponsored accounts that often feature some kind of matching contribution.

Data source: Vanguard’s “How America Saves 2024” report.

The age ranges are not exactly the same as in the IRA table above, but 401(k) balances do tend to come in a bit higher, likely due to higher annual contribution limits and employers’ matching contributions.

Create a plan

Once again, there’s no one right way to approach retirement. The best thing you can right away is to make a plan. There are many retirement calculators out there that you can use to calculate how much you need to set aside and invest each year to obtain your desired goals. This will help your near-term budgeting process and give you a sense of whether you need to rein in spending or invest more to hit your goals.

The next best thing is to start saving and investing if you haven’t already. The earlier you start, the more time you give your holdings to grow. Compounding returns can turn even a modest amount of savings into a sizable nest egg over time.

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