Savings Goals by Age: How Much to Save at Every Stage

As you walk through life, it’s wise to design a roadmap of your expected financial milestones. Aside from deciding when you want to buy a house or pay down debt, writing down your savings goals by age keeps you on track for retirement.  

Of course, the actual timeline of your savings milestones will vary based on your life choices. But it never hurts to start with a baseline. 

Below, we’ve compiled a list of retirement savings goals by age to help you aim for the skies. As they say, even if you don’t make the moon, you’ll land among the stars. 

Savings By 20: What You Can Afford

Under 20 – more specifically, under 18 – your earnings and savings potential are somewhat limited. In many states, you’ll face working hours restrictions. You’ll also need a parent or guardian’s signature to open a banking or investment account or get a credit card. (Once you’re 18, you can transfer funds into an account in your own name.) 

Still, you can get a head start with any money you do earn. 

Generally, advisors recommend saving at least 10-20% of your pre-tax income from the day you start working. But at this point, you’re probably also working on buying life’s essentials, like your first car, a nice laptop, or college tuition. 

As such, your savings goal is simply whatever you can afford, whether that’s $200 or $20,000 by the time you’re 20.

Savings Goals By Age 30: 1x Your Annual Income

During your 20s, life takes many twists and turns. You may go to college or trade school, work up the corporate ladder, or take time off to find yourself. 

Throughout this process, you may not be able to save much. Many people enter their late 20s weighed down by student loans, auto loans, or even their first mortgage. 

But if your education or career delays your long-term savings goals, don’t sweat it! You have the rest of your life to make it up – now’s the time to build skills that pay off later. 

For now, stick to setting aside at least 10% of every paycheck (pre-tax), or more if you can afford it. Over ten years, that adds up to 100% of your annual pay. That puts you on track for meeting your first savings goal by age: 1x your annual income by 30. 

As to where you should stash your savings, the “right” place varies. Generally:

• Retirement savings go into your retirement account, like a 401(k) or IRA
• Your emergency fund and any money needed in the next 3-5 years go into a high-yield savings account
• “Extra” money and long-term goal-oriented funds, like your home’s down payment, go into a regular brokerage account

But if you’re not sure how to divvy up your money, hiring a financial advisor can help you personalize your savings plan. 

Savings by 40: 3-4x Your Annual Income

By the time you’re 40, you should aim for 3-4 times your annual income saved across your savings and investment accounts. 

At this point, experts recommend focusing on building up your retirement account first to give your money more time to grow. Roughly 40-60% of your savings, depending on your financial journey, should be stashed in your retirement account. 

The rest of the money should be saved across various savings and brokerage accounts. In your 30s, your “extra” savings should go to goals like:

• Growing your emergency fund to meet 3-6 months’ worth of your current expenses
• The down payment on a mortgage (or paying off your mortgage faster to save on interest)
• Property taxes (if you do or soon will own a home)
• Your childrens’ higher education fund
• A new car fund

If you’re struggling to meet your retirement savings goal by age 40, start building good habits sooner, rather than later. Automating your savings, paying yourself first, and sticking to a budget can keep you on track. Sticking non-invested funds in a high-yield savings account can also generate more interest than you regular bank account. 

Saving larger amounts – up to 20% of your pre-tax income – can also get you back on track.

Savings Goals by Age 50: 5-6x Your Annual Income

By the time you hit 50, financial experts generally recommend saving 5-6 times your annual salary across your accounts. If your income has kept up with you, your savings should increase to 7 times your annual salary by 55. 

During your 40s, you shouldn’t just be saving; you should also clear out your debts. Remember: even if you have high savings, interest can still eat a hole in your budget and net worth. Leaving a little more room for paying off your credit cards or mortgage can save you big – and help you save more – long-term.  

You should also start chasing promotions or researching how to build a successful side hustle. If you’re not ready to supercharge your income just yet due to the demands of family life, you’ll have laid the groundwork to get ahead in your 50s.

Savings by 60: 6-8x Your Annual Income

As you approach 60, you should aim to save 6-8 times your annual income. 

If you’ve fallen behind, now’s the time to take advantage of the $1,000 “catch-up contributions” that most retirement accounts permit. This extra funding power can bulk your retirement savings and long-term investment income. 

Now’s also the time to build equity as fast as possible. Your 50s are prime earning years – with a wealth of experience behind you, you can request promotions or move into your own business with greater ease than any point in your career. Use this extra income to pay off your home, invest in side projects, or even buy rental properties. 

However, at this point, general targets matter less than personalized advice. What’s most important is ensuring that you have enough money to set aside to fund your ideal retirement. (And a little extra to cover any sudden emergencies.) 

You should also consider whether you plan to continue working beyond age 65 and plan for any contingencies. While you can retire earlier, working longer means your money has more time to percolate in your investment accounts. Plus, any excuse to get out of the house will be a chance to socialize!

Savings Goals By Ages 65-70: 10-11x Your Annual Income

Once you reach 65, you should have at least 10-11x your annual income prepared to carry you through retirement. If you don’t, you might consider staying on your job part-time or moving into consulting work to supplement your income.  

Looking Beyond Your 70s

By your 70s, you’ve hopefully accumulated enough to enjoy your retirement. While your life path may look different from what we’ve outlined here, these guidelines provide a solid roadmap to start from. At this point, your only savings worries should be budgeting to ensure your retirement fund will last the rest of your life.