Key Points
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After age 50, higher contributions and catch-up provisions can compound quickly.
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Consistent contributions to your retirement account matter more than occasional large deposits.
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Controlling debt can help ensure more retirement income.
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Reaching 50 with a solid nest egg is more than a financial milestone. It’s a powerful signal that years of careful planning and discipline are paying off. If you’ve saved roughly six times your annual salary for retirement by now, you’re not just on track; you’re ahead of the game.
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Retirement savings benchmarks by age
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Age
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Benchmarks
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30
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1x annual salary
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40
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3x annual salary
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50
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6x annual salary
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60
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8x annual salary
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67
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10x annual salary
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Data source: Fidelity Investments
In other words, if your annual salary is $100,000 and you have $600,000 tucked away in retirement accounts and other long-term investments, you’re on track.
Buying yourself flexibility
Being ahead of the benchmark as you plan for retirement doesn’t just look good on paper. It buys you flexibility. Here are some of the options being on track can offer:
- You may consider retiring a bit earlier than originally planned.
- You might decide to shift to less stressful work, even if the job pays less.
- You could find it easier to weather market downturns without drastically altering your lifestyle.
- You’re unlikely to spend as much time stressing over retirement-related concerns, like higher-than-expected taxes or healthcare expenses.
One size does not fit all
The reality is that your retirement plan may require you to save more — or it may require you to save less. And if you have other plans for post-retirement income, you may not need to save as much in a dedicated retirement account. Debt and your retirement plan shape your ultimate financial needs. If you’re entering retirement with high-interest debt or big travel plans for your golden years, you may need to hit those savings benchmarks. If your debts are low and your plans are modest, you may be able to get by with less.
Where savers stand, on average
If saving for retirement is a challenge for you, it’s easy to feel discouraged by benchmark numbers and believe you’re the only one who’s fallen behind. However, here’s a look at average 401(k) balances by age:
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Age
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Average Retirement Savings
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30-34
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$51,700
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40-44
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$120,100
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50-54
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$215,700
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60-64
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$257,400
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65-69
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$258,800
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Data source: Fidelity Investments.
Catching up
If your retirement savings aren’t where you want or need them to be, it’s not the end of the road. No matter how old you are, you can take steps to improve your situation. For example:
- Capture your employer’s full match: If your employer offers 401(k) matching, contribute at least that amount each payday. For example, if your company offers a 3% match, contribute at least 3% so you don’t miss out on free money.
- Raise your contributions: If you have a bit of runway before retirement and you’re not already reaching contribution limits, make it a point to increase your contributions by 1% to 2% annually, particularly after raises.
- Use catch-up contributions: If you’re 50 or older, take advantage of catch-up contributions. For example, 401(k)s generally allow an additional $8,000, and ages 60-63 may qualify for $11,250 in catch-up contributions.
If you’re concerned that you won’t hit your retirement income target, plan for it by reducing expenses now. Pay off high-interest debt and save for big-ticket items you expect to buy in retirement, like a new vehicle. Even if you don’t meet your ultimate goal, you’ll benefit by focusing on your retirement needs while still working.
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