How Much Should You Save By Age 30, 40, 50 or 60?

By Dave Rao
Tuesday, February 13, 2018

Strive to reach these benchmarks for each stage of life.

Dave Rao

It is agreed that the earlier you start saving for retirement, the better. The big question on the minds of many savers is, “How am I doing?” This article will provide some rough milestones to try and reach. Keep in mind that you may need to save more or less than these amounts based on your objectives, lifestyle and income needs.

Age 30

Can you save the equivalent of a year’s salary? Some 30-year-olds have that much money in debt. The thing is, you may be able to manage debt while also saving and investing to build wealth simultaneously. One way to plan to reach this goal is to save (and invest) about one-fifth of your after-tax income beginning at age 25. That assumes you start with no savings. If you start saving and investing earlier, the goal may be easier to attain.

Age 40

Will your savings be triple the amount of your yearly earnings? The average American currently saves about 3.5 percent of his or her income. Can you save 3.5 percent of what you earn at 25 or 30 and build a six-figure retirement fund by your 40th birthday? Perhaps, if you are an absolute investing wizard or start your career with a salary north of $100,000. Otherwise, saving and investing 10 to 15 percent of what you earn annually will be crucial in planning to reach this goal.

Age 50

Will your savings be close to 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 due to factors like child-rearing, divorce, periodic unemployment or health concerns. One response is to adjust your discretionary spending habits, if life allows.

Age 60

Will your savings equal eight or nine times what you earn annually? Amassing $500,000 or more in retirement assets should be a priority. Even if you have not managed this, other resources can help you generate retirement income in the years ahead. You will have Social Security benefits coming your way and possibly home equity, executive compensation or business proceeds to make your financial future more promising.


Our firm does not render legal or tax advice. This article was written for our firm and provided courtesy of MarketingPro. Investments in securities and insurance products are: NOT FDIC-INSURED/NOT BANK-GUARANTEED/MAY LOSE VALUE Rao Wealth Partners is an independent firm with securities offered through Summit Brokerage Services, Inc., member FINRA and SIPC. Advisory services are offered through Summit Financial Group, Inc., a registered investment adviser. Summit is an independent broker-dealer with client assets held at First Clearing, LLC (a wholly owned Wells Fargo subsidiary). Summit and its affiliates are under separate ownership from any other named entity.