Current:Home > reviewsHow much should you have invested for retirement at age 50? -RiskWatch
How much should you have invested for retirement at age 50?
View
Date:2025-04-15 20:31:49
When you're 50, retirement is close on the horizon. It's a critical time in your life to make sure you're getting ready for a future without a paycheck when you'll have to support yourself with savings.
So, just how much should you have saved by the time you turn 50, and are most Americans on track? Let's take a look at some expert recommendations, along with some data on how much money most people have socked away in their retirement plans by their 50th birthday.
This is how much you should have saved by age 50
According to Fidelity, you should aim to have around six times your current annual salary saved by the age of 50. This would put you on track to have 10 times your final salary by 67, which is the full retirement age for Social Security benefits (making it a good time to retire since you can claim an unreduced retirement check). This would mean if you were making $60,000, you would ideally have around $360,000 in a 401(k) or other retirement plan by the time you turned 50.
Unfortunately, many people are very far behind when it comes to hitting their target of saving six times their salary by that age. The Bureau of Labor Statistics reports median annual earnings of $76,440 for men between the ages of 45 and 54, and median annual earnings of $59,852 for women. This would mean men should have around $458,640 for men and $359,112.
In reality, the Motley Fool's research revealed that median retirement savings in 2022 was $115,000 for Americans ages 45 to 54. That's far smaller than the recommendation for both men and women. Many people simply have not put aside enough money for their future and are not on track to replace the income they need as seniors.
How can you set your own savings goals?
The Fidelity estimates are a good rule of thumb aimed at making it easier to set savings goals, but they aren't necessarily accurate for everyone. For one thing, while it's true that women often earn less than men and have less income to replace, they also tend to live longer, so they may need more retirement savings than their male counterparts rather than far less, as Fidelity's formula suggests.
Another thing is that Fidelity's estimates are just generalized rules that don't take your own retirement plans into account. If you want to retire before 67 because you'd prefer to enjoy your freedom at a younger age, you'd need much more saved by 50 than six times your salary. Your savings would need to support you sooner, you'd have less time to grow your account balance, and you might end up with a smaller Social Security check if you claimed your benefits ahead of full retirement age to accommodate your early retirement.
You should think about how much you actually plan to spend as a senior and when you plan to retire. Then, work backward from there to decide how much to save. If you want your investments to produce $50,000 in income for you, multiply that number by 25 to figure out how much your final nest egg balance should be (assuming you plan to follow the 4% rule and withdraw 4% of your money in your first year of retirement and adjust upwards for inflation). Once you know your final desired number, you can use the calculators on Investor.gov to determine exactly how much you should be saving each month to achieve your goal by your desired retirement age.
Focusing specifically on how much you have saved by 50 isn't all that useful in this process since it doesn't matter in the end. If you have far less than you need by 50 but you get serious about saving, take advantage of catch-up contributions and devote yourself to investing aggressively, you can still end up with the money you need to leave work in your 60s and enjoy a comfortable future.
The key is to start from where you are today, figure out what you must save each month to have enough to retire at your desired age, and set up automatic contributions to your retirement plan for the necessary amount so you can make your retirement dreams a reality.
The Motley Fool has a disclosure policy.
The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY.
The $22,924 Social Security bonus most retirees completely overlook
Offer from the Motley Fool: If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $22,924 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.
View the "Social Security secrets" ›
veryGood! (935)
Related
- Apple iOS 18.2: What to know about top features, including Genmoji, AI updates
- Climate Change Made the Texas Heat Wave More Intense. Renewables Softened the Blow
- How Dueling PDFs Explain a Fight Over the Future of the Grid
- Bachelor Nation's Shawn Booth Expecting First Baby
- House passes bill to add 66 new federal judgeships, but prospects murky after Biden veto threat
- We've Uncovered Every Secret About Legally Blonde—What? Like It's Hard?
- We've Uncovered Every Secret About Legally Blonde—What? Like It's Hard?
- As the Colorado River Declines, Water Scarcity and the Hunt for New Sources Drive up Rates
- Senate begins final push to expand Social Security benefits for millions of people
- Maralee Nichols Shares Glimpse Inside Adventures With Her and Tristan Thompson's Son Theo
Ranking
- Newly elected West Virginia lawmaker arrested and accused of making terroristic threats
- Get the Know the New Real Housewives of New York City Cast
- States Test an Unusual Idea: Tying Electric Utilities’ Profit to Performance
- Preserving the Cowboy Way of Life
- The Daily Money: Spending more on holiday travel?
- From the Frontlines of the Climate Movement, A Message of Hope
- Lawsuit Asserting the ‘Rights of Salmon’ Ends in a Settlement That Benefits The Fish
- Have a Hassle-Free Beach Day With This Sand-Resistant Turkish Beach Towel That Has 5,000+ 5-Star Reviews
Recommendation
Mets have visions of grandeur, and a dynasty, with Juan Soto as major catalyst
Plastic Recycling Plant Could Send Toxic ‘Forever Chemicals’ Into the Susquehanna River, Polluting a Vital Drinking Water Source
California, Battered by Atmospheric Rivers, Faces a Big Melt This Spring
Harry Styles’ 7 New Wax Figures Will Have You Doing a Double Take
Most popular books of the week: See what topped USA TODAY's bestselling books list
Pregnant Kourtney Kardashian Says Bye Bye to Haters While Blocking Negative Accounts
Carlee Russell Found: Untangling Case of Alabama Woman Who Disappeared After Spotting Child on Interstate
EPA Proposes to Expand its Regulations on Dumps of Toxic Waste From Burning Coal