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Am I Behind on My Financial Goals?

When it comes to saving for retirement, average savings by age can be a helpful metric to see if you’re on track. Read on to see where you land.

December 21, 2021

If life is a race (which it isn’t, by the way), it’s easy to believe you’re falling behind. That sentiment goes double when it comes to retirement savings — 6 in 10 Americans say they need to catch up on their retirement savings. But, if you don’t have a finish line in mind, it can be hard to determine where you are on the course. 

How much money do you need to retire? We’re unpacking average savings by age, noting mile markers along the way that just might make saving for retirement more achievable.  

How Much Should I Save For Retirement?

Before breaking retirement goals down by decade, let’s take a look at the big picture. Most Americans hope to retire by 67, but they’ll need to figure out just how much to save before then. 

How much money do you need to retire? The figure will vary from person to person. Consider using a retirement calculator to determine savings goals by year and look into other factors, such as the number of years in retirement, cost of living and expenses like debt and mortgages

With a savings goal in mind, now’s time to consider the types of accounts to save in. First, explore your employer’s 401(k) options or other employee-sponsored retirement plans. Many companies offer a percentage match or other incentives for their employees, and saving in one of these accounts could mean reaching your savings goal sooner. 

Self-employed? Check out retirement funds for self-employed people. Many come with similar tax benefits as a traditional 401(k). 

Setting up your retirement savings is personal, but we’ll admit it can be helpful to see where you fall among peers. See how your plans compare to average retirement savings by age below. 

How Much Should I Have Saved By 25? 

For many, the early 20s are filled with financial instability, unpredictable income and accruing student loan debt. With all that upheaval, it’s a lot to ask to be saving for retirement as well. 

How much you should save in your 20s won’t come into play for many people until about age 25, when you may be out of school and perhaps working full time. In that case, the average 25-year-old should aim to have about 25-50% of their annual salary set aside in retirement savings.  

Half a year’s salary too ambitious? Try saving even a small amount. People in their 20s have an advantage no other decade does – time. Even if you put away a small amount early on, it has the power of compounding interest and nothing but time to help make it grow. 

Keep this in mind

You may be tempted to hit the ground running and save everything you can for retirement right away, but try not to neglect other, sometimes more pressing, financial needs of your 20s. For example, consider starting an emergency fund in the event of an unexpected expense in the short term. Additionally, setting up a student loan repayment plan and sticking to it can help set you on the path towards a healthy financial future.  

How Much Should I Have Saved By 30?

Your third decade may come with a little more stability, as well as the ability to put aside more income for retirement. When you hit the big 3-0, the rule of thumb is to have an equivalent of a full year’s salary saved in retirement. 

As you become more established in your career, your salary might increase. This can be a good time to bump up retirement contributions, automatically sending a part of that bigger paycheck straight to retirement. Consider meeting or exceeding the employer contribution match.

Keep this in mind

If you’re right on track with retirement savings – congrats! However, other financial obligations may crop up in your 30s. 

With a healthy emergency fund established, consider creating a mid-term savings goal. Are you hoping to buy a house, pay for a wedding or have kids in the near future? Start a separate savings goal for the down payment, wedding fund or baby budget.

Also, while saving for retirement is important, also consider any credit card debt you may carry today. Paying off high-interest credit card debt today typically helps your long-term financial situation more than the average rate of growth on your retirement investments might. So if you’re carrying credit card debt each month, consider a credit card payoff tool like Tally† that can help you get out of debt faster. 

How Much Should I Have Saved By 40?

At 40, your goal should be to have three times or more your annual salary saved in a retirement account. Then, as you continue to grow your retirement savings, you should be on track to have four to five times your salary saved by the time you hit 50.

If you’re already taking advantage of an employer-sponsored retirement plan, it could be time to consider opening an IRA, which provides its own tax benefits. 

Keep this in mind

If you’re on track with retirement savings but are also raising a child, you might consider opening a 529 plan. A 529 plan could help finance your child’s future education.


I’m Already Behind, How Can I Catch Up?

If you feel you’ve fallen behind compared to the average savings by age, don’t despair, the metaphorical race isn’t over yet. Here are some tools to get you back on track:

  • Revisiting your budget. If it doesn’t feel like there’s enough wiggle room in your budget to contribute to retirement accounts, it may be time to reevaluate your budget. Can you cut some unnecessary expenses to increase retirement contributions? 

  • Automating your investing. Instead of transferring funds to a retirement account each month, you can set automated transactions. The set-it-and-forget-it mentality could keep you from overspending just because there’s money sitting in your account. Similarly, you can ask your employer to bump up monthly, pre-tax contributions slowly. The change could be so small you might not even notice.  

  • Setting smaller goals. Breaking down your savings goal can make the amount feel less intimidating. Consider what you’d need to save monthly, weekly or daily to meet the goal. 

  • Getting started today. If you already feel behind, it may feel hard to muster up the enthusiasm to start saving now. It’s a cliche, but there’s no time like the present. If you can start saving, even a little bit today, your investment will continue to grow until retirement.

  • Knocking out debt faster. Lofty retirement savings goals can be dashed in the face of high-interest credit card debt. If monthly bills and late fees are making it difficult to save for retirement, check out Tally.† The straightforward debt repayment app shows all your credit card debt in one place, makes on-time payments and uses automated tools that can help you knock out debt faster, all with a low-interest line of credit1.

When it comes to saving for retirement, average savings by age can be a helpful metric to see if you’re on track. If you’ve fallen behind, don’t despair. With the help of a smart budget and using tax-advantaged retirement accounts, you could meet your financial retirement goals in no time. 

To get the benefits of a Tally line of credit, you must qualify for and accept a Tally line of credit. The APR (which is the same as your interest rate) will be between 7.90% and 29.99% per year and will be based on your credit history. The APR will vary with the market based on the Prime Rate. Annual fees range from $0 - $300.