Keep your retirement savings headed in the right direction.
© bruno135_406, suphaporn/stock.adobe.com; Photo illustration EncyclopÊdia Britannica, Inc.
Life has a way of pushing retirement into the background. Between work, family, paying the bills, and everything else competing for your attention, itâs easy to let your retirement savings run on autopilot. Contributions come out of your paycheck, your investments do their thing, and you assume youâre making steady progress.
Key Points
- Age-based benchmarks can help you gauge your retirement progress.
- Savings goals depend on factors such as when you plan to retire, where youâll live, and the lifestyle you want.
- No single benchmark can tell you whether youâre ready for retirement.
Thatâs often a good approachâconsistently saving and investing is half the battle. But every so often, itâs worth taking a step back for a gut check. Comparing your savings with common benchmarks, reviewing your contribution rate, and thinking about the retirement you want can help you decide whether youâre still on track or whether itâs time to make a few adjustments.
Average retirement account balances by age
The first step to staying on track with your retirement goals is to know where you are. Vanguardâs annual How America Saves report compares U.S. workersâ average and median retirement account balances by age (figures are based on 2025 data, the latest available). The average is the total of all account balances divided by the number of participants, while the median represents the midpointâhalf of participants have more saved, and half have less.
How do your savings stack up?
| Age | Average retirement balance | Median retirement balance |
|---|
| Under 25 | $7,300 | $2,200 |
| 25â34 | $50,300 | $18,700 |
| 35â44 | $120,700 | $46,900 |
| 45â54 | $215,000 | $78,700 |
| 55â64 | $305,000 | $107,300 |
| 65 and older | $330,200 | $103,200 |
| Vanguard defined contribution plans, 2025: Account balances by participant demographics. (Numbers are rounded to the nearest $100.) |
Although these numbers might give you a baseline from which to compare your savings, they donât even come close to telling you how prepared you might be. The gap between the average and median is a clue: A relatively small number of large accounts can pull the average higher, while the median shows where the midpoint participant actually stands.
In other words, what if âaverageâ isnât good enough, especially if you plan to maintain your current level of comfort? The next step is to dig into the factors that determine how much youâll need.
Building a comfortable retirement typically involves combining Social Security with other sources of income.
EncyclopĂŠdia Britannica, Inc.
How much should you invest for retirement?
Deciding what to set aside for retirement depends on a number of factors, including:
Where you plan to live in retirement. Your retirement savings donât just buy investmentsâthey buy housing, groceries, health care, and everything else youâll need after you stop working. Those costs vary widely by location. According to the U.S. Bureau of Economic Analysis, housing costs in the highest-priced states are nearly three times those in the lowest-priced states, with even greater disparities between high-cost urban areas and lower-cost rural communities.
Your desired retirement lifestyle. A retirement that involves spending time with family, staying home most of the time, and remaining frugal probably doesnât need an aggressive savings plan. If you want to travel, take up interesting hobbies, and generally maintain a high quality of life, though, you need to plan on saving more.
How much can you safely withdraw?
Think ahead to what you want your retirement to look like. Then estimate a target monthly spend to make that happen. This will help you figure out how much you need to save to live how you want.
When you want to retire. The earlier you plan to retire, the more you need to save now. Someone planning to retire at age 55 needs to save much more by age 45 than someone who expects to work until age 70.
Keeping a part-time job after you reach a certain age can help you extend your nest egg, even if you consider yourself retired.
What about Social Security? Planning when to start taking Social Security benefits also makes a difference. If you put off drawing on Social Security, youâll have a higher monthly benefit.
On the other hand, if you start taking Social Security early to supplement an early retirement, youâll have a lower monthly benefitâand need to make up for it with more savings.
Setting retirement goals: Is your portfolio on track?
Fidelity offers one widely cited set of retirement savings guidelines based on how many times your annual salary you should have saved. Think of these multipliers as rough benchmarks, not hard-and-fast rules.
| Age | Salary multiplier |
|---|
| 30 | 1x |
| 35 | 2x |
| 40 | 3x |
| 45 | 4x |
| 50 | 6x |
| 55 | 7x |
| 60 | 8x |
| 67 | 10x |
| Fidelity.com offers these savings guidelines to âprovide a starting point to help you build your savings plan, and assess your progress.â |
By this measure, if you make $75,000 a year at age 45, you should have at least $300,000 in your retirement account if you want to stay on track toward a comfortable retirement.
Tips for staying on track with your retirement goals
There are several things you can do to stay on track over time:
- Start ASAP. The earlier you begin investing, the less youâll need to set aside to stay on track. Even $10 a week before youâre 25 can add up over time, thanks to compounding returns.
- Take advantage of your employer match. If your employer matches your contributions, try to invest enough to get the max. Thatâs free money that compounds over time and adds to your portfolio.
- Increase your contributions over time. As your income increases, boost your retirement plan contributions. You should invest in your future with each raise, bonus, and perhaps tax refund.
- Make it automatic. Many employers allow you to automatically invest with each paycheck. See if your plan also lets you increase your contribution by, say, 1% each year. Automation helps you stay consistent, but donât forget to check in periodically to make sure youâre still on track.
- Donât panic during market downturns. Although it can be nerve-racking to look at your portfolio during a market sell-off, the reality is that staying on track normally means better returns later, aided by a concept called dollar cost averaging. If you stick to your plan and contribute regularly through a downturn, you can grow your portfolio and position it to benefit from the subsequent recovery.
The bottom line
Retirement is perhaps the biggest financial goal youâll ever plan for, but itâs also one of the hardest to measure. Average and median account balances by age group, salary multipliers, and other retirement rules of thumb can provide useful reality checks, but theyâre only starting points.
The right savings target depends on when you want to retire, how you plan to live, and where you expect to spend those years. Review your progress periodically, adjust as your life changes, and let your retirement plan evolve with you.
This article was most recently revised and updated by Miranda MarquitThis article was most recently revised and updated by Doug Ashburn
