The single most common retirement question—how much should I have saved by my age?—has a surprisingly useful answer, but it isn't a single number. It's a series of milestones tied to your salary, designed to keep you on track for a comfortable retirement without forcing you to guess your future expenses decades in advance. The framework most financial planners use comes from J.P. Morgan Asset Management and Fidelity, and it works because it scales with your income as your career progresses.
This guide walks through the age-based milestones, shows you how to calculate your personal retirement number, explains the account types you should be using, and covers what to do if you're starting late. The earlier you understand the math, the more time compound growth has to work in your favor.
The age-based retirement milestones
The widely cited milestones express your target retirement savings as a multiple of your current annual salary:
- Age 30 — save 1× your annual salary
- Age 40 — save 3× your annual salary
- Age 50 — save 6× your annual salary
- Age 60 — save 8× your annual salary
- Age 67 — save 10× your annual salary
So if you earn $80,000 at age 35, you should aim to have roughly $160,000–$240,000 saved (between the 2× and 3× mark). At age 50 with the same salary, you'd target about $480,000. These multiples assume you'll need to replace about 75–85% of your pre-retirement income, that Social Security will cover part of that, and that you'll withdraw about 4–5% of your portfolio per year in retirement.
Where the milestones come from
The milestones are derived from a steady-state savings rate of about 10–15% of gross income over a 30-plus year career, invested in a diversified portfolio returning roughly 5–6% real (after inflation). They're calibrated so that hitting each milestone makes the next one achievable through continued saving and reasonable investment growth. Fall behind at 30, and you need a higher savings rate at 40 to catch up.
Calculating your personal retirement number
The salary-multiple method is a great shortcut, but for a more precise target, calculate your own number using the 25× expenses rule. Here's how:
- Estimate your annual retirement expenses. A common starting point is 75–80% of your pre-retirement income, but the real number depends on whether you'll have a paid-off home, how much you'll travel, healthcare costs, and lifestyle.
- Subtract guaranteed income. Subtract your expected Social Security benefit (check your statement at ssa.gov) and any pension income. What's left is what your portfolio needs to cover.
- Multiply by 25. This gives you the portfolio size needed to sustain withdrawals at a 4% rate—the classic "safe withdrawal rate" from the Trinity Study.
Example: You estimate you'll need $60,000 per year in retirement. Social Security will pay $24,000. Your portfolio must cover $36,000 per year. $36,000 × 25 = $900,000 target portfolio. If you also want a cushion, aim for 30× ($1,080,000).
Adjusting for early retirement
The 4% rule assumes a 30-year retirement. If you plan to retire at 55 or earlier, your retirement could last 40+ years, and you should target a more conservative 3.5% withdrawal rate. That means multiplying your annual need by 28–30 instead of 25. For early retirees, the safe target is often 30× annual expenses.
Retirement account types and contribution limits
Where you save matters almost as much as how much you save. Tax-advantaged accounts in the United States dramatically accelerate compound growth:
401(k) and 403(b) plans
Employer-sponsored defined contribution plans. For 2024, you can contribute up to $23,000 per year ($30,500 if you're 50 or older via catch-up contributions). Many employers match contributions—typically 50% of your contributions up to 6% of salary, effectively a 3% raise. Always contribute at least enough to capture the full employer match. Not doing so is leaving free money on the table.
Traditional and Roth IRAs
Individual Retirement Accounts you open yourself. 2024 contribution limit is $7,000 ($8,000 if 50+). Traditional IRA contributions may be tax-deductible now and grow tax-deferred; Roth IRA contributions are made with after-tax dollars but grow tax-free forever. Income limits apply for direct Roth contributions—single filers above $161,000 (2024) must use the backdoor Roth strategy.
HSA (Health Savings Account)
The triple-tax-advantaged account nobody talks about. Contributions are tax-deductible, growth is tax-free, and withdrawals for qualified medical expenses are tax-free. After age 65, you can withdraw for any purpose penalty-free (paying ordinary income tax, like a traditional IRA)—making the HSA effectively a stealth retirement account. 2024 contribution limit is $4,150 for individuals, $8,300 for families, with a $1,000 catch-up at 55.
Taxable brokerage accounts
No contribution limits, no withdrawal restrictions, but you pay taxes on dividends and capital gains annually. Useful for early retirees who need to access funds before age 59½.
Catch-up contributions if you're starting late
If you're 50 or older and behind on the milestones, the IRS gives you a powerful tool: catch-up contributions. These let you stash significantly more in tax-advantaged accounts:
- 401(k): $7,500 extra in 2024, bringing total to $30,500
- IRA: $1,000 extra, bringing total to $8,000
- HSA: $1,000 extra at age 55
A 52-year-old couple could theoretically stash $30,500 × 2 (401k) + $8,000 × 2 (IRAs) + $8,300 (family HSA) = $85,300 per year in tax-advantaged accounts. Combined with employer match, that's $90,000+ per year of tax-sheltered savings.
Strategies if you're behind
Falling behind on milestones isn't catastrophic, but it does require adjustment. Options:
- Increase your savings rate aggressively. Going from 10% to 20% of income is painful but recoverable. Direct raises, bonuses, and tax refunds straight to retirement accounts.
- Use catch-up contributions starting at 50. The IRS built these specifically for late starters.
- Delay retirement by 2–5 years. Each year of delay has a triple benefit: another year of saving, another year of compound growth, and one fewer year of withdrawals. Delaying from 62 to 67 can boost lifetime retirement income by 30%+.
- Delay claiming Social Security. Benefits increase by about 8% per year between full retirement age and age 70. That's a guaranteed, inflation-adjusted return unmatched by any investment.
- Consider a Roth conversion ladder. If you have a large traditional IRA, converting portions to Roth during low-income years (early retirement) can save tens of thousands in lifetime taxes.
- Work part-time in retirement. Even $15,000–$20,000 of part-time income can dramatically reduce the portfolio withdrawals needed.
Social Security: what to expect
Social Security replaces about 40% of pre-retirement income for the average worker, but the exact amount depends on your 35 highest-earning years. For 2024, the maximum benefit at full retirement age is $3,822 per month, but the average retired worker receives about $1,900. Check your statement at ssa.gov annually—this is the most reliable projection of your future benefit.
The decision of when to claim matters enormously. Claiming at 62 reduces your monthly benefit by up to 30% versus waiting until full retirement age (67 for most current workers). Waiting until 70 increases it by 24% over full retirement age. For a worker with a $2,000 full-retirement-age benefit:
- Claim at 62: about $1,400/month
- Claim at 67: $2,000/month
- Claim at 70: about $2,480/month
For married couples, the higher earner should generally delay to 70 because the survivor benefit will be the higher of the two spouses' benefits. Coordinating spousal benefits can add tens of thousands of dollars in lifetime income.
Investment allocation by age
The milestones assume reasonable investment growth, which means you need an appropriate asset allocation. A common rule of thumb: 110 minus your age = percentage in stocks, with the rest in bonds. At 30, that's 80% stocks / 20% bonds. At 60, it's 50/50.
In practice, many planners now suggest being more aggressive given longer lifespans—120 minus age, or even 130 minus age for those with stable incomes and long horizons. The key is to take enough equity risk to outpace inflation, but not so much that a market crash right before retirement devastates your portfolio.
Glide paths and target-date funds
Target-date funds (like Vanguard Target Retirement 2055) automatically reduce equity exposure as the target date approaches. They're a "set it and forget it" option—useful for investors who don't want to rebalance manually. Expense ratios matter; choose funds below 0.20%.
Healthcare costs in retirement
A 65-year-old couple retiring today needs about $315,000 saved just for healthcare expenses over retirement, according to Fidelity's annual estimate—and that excludes long-term care. Medicare doesn't start until 65, so early retirees need to budget for ACA marketplace premiums or COBRA, often $1,000–$2,000 per month for a couple.
Long-term care insurance, while controversial, can protect against the catastrophic cost of extended nursing home care (now averaging $9,000–$11,000 per month). Most middle-class retirees are best served by either purchasing a hybrid life/LTC policy or self-insuring through HSA accumulations.
Common mistakes that derail retirement savings
- Cashing out a 401(k) when changing jobs. This triggers taxes plus a 10% penalty and resets your compound growth to zero. Always roll over to an IRA or new employer's plan.
- Taking 401(k) loans. Yes, you pay yourself interest, but you lose market growth on the borrowed amount and face taxes/penalties if you leave your job without repaying.
- Being too conservative. Holding 100% bonds at age 35 virtually guarantees you'll fall short of milestones.
- Being too aggressive. Concentrating in your employer's stock, crypto, or single-sector funds adds risk that can wipe out years of progress.
- Ignoring fees. A 1% expense ratio eats about 28% of your returns over 35 years. Choose low-cost index funds.
- Not increasing contributions with raises. Lifestyle creep is the silent retirement killer. Auto-escalate contributions 1% per year.
Putting it all together
Run your numbers at least annually. Calculate your current multiple (total retirement savings ÷ current salary), compare to the milestone for your age, and adjust your savings rate accordingly. If you're ahead of pace, you can consider retiring early or scaling back risk. If you're behind, the lever you control most directly is your savings rate—and time is still on your side if you act now.
To model your own trajectory with different savings rates, returns, and retirement ages, try our Retirement Calculator. It projects your nest egg at retirement based on your current savings, contributions, and expected returns—letting you see exactly what catching up looks like in dollars.