How Much Should You Save for Retirement by Age?

Fidelity Retirement Savings Benchmarks

Fidelity, one of the largest 401(k) administrators, publishes industry-standard benchmarks based on decades of retirement data. These assume:

• Starting to save at 25.
• Retiring at 67.
• Living to age 92.
• 6% annual return on investments.
• 2% wage growth per year.
• Inflation of 2.5% annually.

For a $100,000 earner: $100,000 by 30, $300,000 by 40, $600,000 by 50, $1,000,000 by 67.

For a $50,000 earner: $50,000 by 30, $150,000 by 40, $300,000 by 50, $500,000 by 67.

These benchmarks account for employer matches (~3% of salary annually), which significantly accelerate savings.

How These Benchmarks Are Calculated

The formula assumes:

1. Employer provides a 3% match (many employers do).
2. Employee contributes 6% of salary (total 9% saved including match).
3. Employer pays half of employee's Social Security and Medicare (FICA).
4. Annual raises approximate inflation (so real salary growth is minimal).
5. Investments earn 6% annual return (historical stock market average is 10%, but this accounts for bonds, inflation, fees).
6. Withdrawals in retirement start at 4% of portfolio value (the "4% rule").

At 4% withdrawal rate, a $700,000 portfolio generates $28,000/year. Combined with Social Security (~$35,000/year average), total retirement income is $63,000—roughly 90% of pre-retirement salary ($70,000).

Falling Behind: What To Do

If you're behind the benchmarks, don't panic:

Age 30 and behind?

• Max out 401(k) ($23,500 + employer match ~$3,000 = $26,500/year).
• Add Roth IRA ($7,000/year).
• Total savings: $33,500/year.
• After 10 years (age 40), assuming 8% growth: $520,000 (higher than 3x salary benchmark for many earners).

Even starting late, aggressive saving catches up quickly.

Age 40 and behind?

• Increase contributions (if possible).
• Work longer (each extra year delays withdrawals and increases savings).
• Plan to spend less in retirement.
• Delay Social Security (claiming at 70 instead of 62 increases benefits ~24%/year).

Age 50+?

• Max out catch-up contributions: $31,000 401(k) + $8,000 Roth IRA = $39,000/year.
• Maximize employer match.
• If self-employed, max SEP-IRA or Solo 401(k) ($69,000).
• Work longer if possible.

Adjusting for Your Circumstances

The Fidelity benchmarks are averages. Your target might differ:

Factors to increase your target:

• High lifestyle spending (expensive home, frequent travel, healthcare costs).
• Longer life expectancy (family history of longevity).
• Early retirement (retiring at 55 instead of 67 means more years to fund).
• No Social Security (self-employed, not eligible).

Factors to decrease your target:

• Low lifestyle spending (modest home, inexpensive hobbies).
• High Social Security income (high-earning career, delayed claiming).
• Pension income (especially if you have a traditional pension).
• Inheritance or large assets.

The 4% Rule and Withdrawal Strategy

The "4% rule" says you can withdraw 4% of your retirement portfolio in year one, then increase withdrawals by inflation annually, and your money will last 30+ years.

Example: $700,000 portfolio, 4% withdrawal = $28,000 year one.

• Year 2 (assuming 2.5% inflation): $28,700 withdrawal.
• Year 3: $29,418 withdrawal.
• (And so on.)

Research suggests the 4% rule succeeds 90%+ of the time (portfolio doesn't run out before death) given historical returns and spending patterns. More conservative withdrawals (3%) have even higher success rates.

For your retirement savings target: Work backwards from your desired withdrawal amount.

• Desired annual spending: $70,000.
• Social Security: $35,000 (average).
• Withdrawal needed from portfolio: $35,000.
• Portfolio required (at 4% rule): $35,000 / 0.04 = $875,000.

So if you want $70,000/year in retirement and have average Social Security, you need roughly $875,000 saved (higher than the Fidelity $700,000 benchmark for a $70,000 earner, which accounts for higher Social Security for higher earners).

Starting Late: The Power of Catch-Up Contributions

If you're 50+ and behind, catch-up contributions are powerful:

Example: Age 50, $400,000 saved (behind the benchmark of 6x salary = $420,000 for a $70k earner).

Years until 67: 17 years.

Contribution strategy:

• 401(k) deferral + catch-up: $31,000/year.
• Roth IRA + catch-up: $8,000/year.
• Total: $39,000/year.

After 17 years at 8% return: $1,850,000 saved (well above target).

Catch-up contributions ($7,500 for 401(k), $1,000 for IRA) let people age 50+ accelerate savings significantly.

Early Retirement Adjustments

If you want to retire before 67:

Age 55 retirement goal: 12 years until retirement.

• Benchmarks suggest 8x salary ($560,000 for a $70k earner) by 60.
• But retiring at 55 means 4 additional years of withdrawals (ages 55–59 before Social Security).
• Adjusted target: 12–14x salary, depending on lifestyle.

Age 50 retirement goal: 25 years until death (age 75), then relying on Social Security.

• Very aggressive target: 15–20x salary.

Use the /products/fire-calculator tool to model early retirement scenarios.

The Role of Social Security

Social Security provides a guaranteed income floor in retirement. The higher your benefits, the lower your portfolio needs to be.

• High earner claiming at 70: ~$48,000/year (2026 estimate).
• Average earner claiming at 67: ~$35,000/year.
• Low earner claiming at 62: ~$18,000/year.

Someone with $48,000 Social Security needs much less portfolio savings than someone with $18,000.

Claim strategy impact:

• Claiming at 62: ~$28,000/year permanent benefit.
• Claiming at 67: ~$35,000/year permanent benefit.
• Claiming at 70: ~$48,000/year permanent benefit.

Delaying Social Security reduces portfolio requirements significantly. Use the /products/social-security-breakeven tool to determine your break-even age.

Pensions and Retirement Security

If you have a pension (defined benefit plan from a former employer), it reduces your portfolio needs dramatically.

Example: Retiree with $30,000/year pension + $35,000 Social Security = $65,000/year guaranteed income.

If spending is $70,000/year, you only need $5,000/year from your portfolio. At 4% withdrawal rate, a $125,000 portfolio is sufficient. This is far below the Fidelity benchmarks.

Many government and union workers have pensions—take them into account when setting retirement savings targets.

Catch-Up Savings in Your 60s

If you're in your early 60s with less saved than benchmarks, you have options:

1. Max out contributions: $31,000 401(k) + $8,000 Roth + $69,000 SEP (if self-employed) annually.
2. Work longer: Each extra year of work adds savings and delays portfolio depletion.
3. Plan part-time work in early retirement: Earn $30,000–$40,000/year ages 62–67, reducing portfolio withdrawals.

A 62-year-old with $400,000 saved can contribute $40,000/year for 5 years (ages 62–67), reaching $600,000+, then claim Social Security at 67 and work part-time for 5 more years if desired.

Online Tools and Calculators

Use the /products/compound-interest-calculator to model how much your current savings will grow.

Example: $200,000 saved, age 40, earning $70,000/year.

• Assuming $30,000/year additional contribution (9% + 3% match).
• 8% annual return.
• By age 67: $1,450,000.

This significantly exceeds the 10x benchmark, indicating flexibility to spend more or retire earlier.

Sources

• Fidelity. "How Much Should I Have Saved for Retirement?" Fidelity.com.
• Vanguard. "How Much Do I Need to Retire?" Vanguard.com.
• Internal Revenue Service. "Retirement Topics." IRS.gov.
• Social Security Administration. "Benefit Estimates." SSA.gov.
• CFA Institute. "Retirement Savings Benchmarks and Planning."