Chris O'Shea
It can be difficult knowing just how much you should have saved for retirement. Is one million enough? More? Less? To make things a little less confusing, understand these retirement savings benchmarks.
401(k) By Age
If you have a 401(k), you can check how your savings stacks up against the average in your age group. In general, you want to aim to save at least 15% of what you earn — that number can include matching dollars from your employer. Here’s a breakdown of how savers are doing right now, via US News:
Age 25 to 34
Average 401(k) savings rate: 6.1%
Age 35 to 44
Average 401(k) savings rate: 6.6%
Age 45 to 54
Average 401(k) savings rate: 7.3%
Max It Out
One way to make sure you’re on track with retirement savings is to make sure you’re maxing out your 401(k). This is especially true if your employer matches contributions. You don’t want to be leaving free money on the table. The 401(k) contribution max for 2021 is $19,500.
Increase as You Go
Typically, you’ll make more money in your life the older you get. With that in mind, set goals of increasing your savings rate as you age. The easiest time to do this is when you get a raise. The more money you get, the more you should save. These incremental increases will go a long way toward a satisfactory retirement.
