The question of how much money you should have saved by the time you hit a certain age is a perennial one in personal finance question—right up there with how to create a budget and how to start investing. But like so many money decisions, there’s no single, magic number that works for everyone.
Fidelity suggests having your yearly income saved at 30, three times your income saved at 40, seven times your income saved at 55, and 10 times your income saved by 67. It uses your salary as a metric in order to determine if you are on track throughout your working years.
For many people, those numbers just aren’t feasible. The U.S. Government Accountability Office reported in 2019 that 48% of households aged 55 or older had no retirement savings. Perhaps a better way to think about retirement savings isn’t in terms of your current salary, but rather what your expenses are and will be. Do you want to maintain your current lifestyle? Downsize? Will you work at all? How much will your Social Security benefit be?
It’s a lot to consider. Another option is to aim to put away 12 to 15% of your salary each year, as Vanguard advises, or to use this slightly more complex formula from Schwab.
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No blueprint is right for everyone, but they all get at the same thing: Create a frame of reference for how much money you’d like to have and work toward it. Do you follow any of these methods of determining your savings goals, or have you made up your own?
This post was originally published in 2017 and was updated on June 2 , 2020 by Lisa Rowan. Updates include the following: Changed featured image, checked links for accuracy and linked to additional related Lifehacker content, updated portions of the text for relevance.