How much you should be saving for retirement?
We know most Americans are woefully behind when it comes to saving for retirement, but according the latest data, it’s never too late to start saving. And it might help to realize that with just a little extra effort, you can beat the average savings rate of your peers.
When it comes to saving for the future, the more you can set aside, the better off you’ll be. But just how much should you aim to have in order to set yourself up for a comfortable retirement?
Average 401K balance: $11,600
Median 401K balance: $4,000
By age 30, you should have the equivalent of one year’s salary saved for retirement.
“It’s never too late to start investing and the best time to start is now.”
Average 401K balance: $43,600
Median 401K balance: $16,500
By age 40, you should have three times your annual salary saved for retirement.
Average 401(k) balance: $106,200
Median 401(k) balance: $36,900
By age 50, you should have six times your annual salary saved for retirement.
Average 401K balance: $179,100
Median 401K balance: $62,700
By age 60, you should have eight times your annual salary saved for retirement.
Average 401K balance: $198,600
Median 401K balance: $63,000
By age 67, you should aim to have 10 times your annual salary in your retirement account.
Regardless your age or financial situation, to save more, start by revisiting your 401K plan if you have one and “increase what you’re saving by at least 1 or 2 percent.. That will get you back up to these numbers that you want to be at. Make sure you’re contributing enough to get the full 401K match if your company offers one. It’s essentially free money.
Then aim to work your way up to setting aside 10 to 15 percent of your income into a retirement fund.
If you’re one of the many Americans without access to a 401K, don’t stress, and don’t use that as an excuse to put off saving for retirement. You have plenty of other options, including a traditional, Roth or SEP IRA, a health savings account (HSA) or a normal investment account.
Read up on all of your options, choose an account to fund and start setting aside money for your future today.