Ages 35, 50 and 65: How Much Should I Have Saved?

Determining how much you should have saved for retirement at different points of your life can be difficult due to income fluctuations and the inherent subjectivity of expectations and lifestyle preferences.

Some people look forward to simple retirement living in their current home for as long as possible. Others plan on setting up a home base in a pricey senior living community and traveling the world. Those two retirement dreams require significantly different retirement resources.

Your retirement savings potential will be based on your income and expenses. Families raising children may have less savings bandwidth in their budget while a couple with significant household income and no children may be able to put aside a considerable portion of their income each year.

Retirement Savings Rule of Thumb

Retirement advisors have differing opinions on what your retirement saving thresholds should be at certain ages.



One rule of thumb is to have the equivalent of double your annual salary in some kind of retirement savings account by the time you’re 35. If you’re making $80,000 a year in your mid 30s, you should have $160,000 in your 401(k)s and IRAs. Some retirement advisors recommend lower multiples, like one and a half times your annual income saved at 35.

It’s not uncommon for retirement advisors to recommend graduated levels of multiples, like:

• One and a half times your salary at 35
• Three to five and a half times your salary at 50
• Seven to 13.5 times your salary at 65

While the dramatic increase in multiple towards the end of your working years may feel intimidating, it’s not as painful as it might initially appear. When retirement savers invest wisely, their money can grow at a significant rate each year.

Consider the above example with the 35-year-old who has saved $160,000 for retirement. Imagine they managed to maintain a healthy return of eight percent over the next 30 years. That initial $160,000 would grow to nearly $1.07 million by the time the saver reaches their 65^th birthday.

Of course, most retirement savers don’t stop saving at the age of 35, so additional yearly investments will similarly have a chance to grow. Hitting 10-times or 15-times your annual income in savings at the age of 65 is not at all unattainable when you’ve been putting money away in well managed retirement accounts for several decades.

However, starting early is absolutely key since you’ll be relying on compound growth to a significant degree. You’ll also need to maximize your compound annual growth rate (CAGR) if you want to make the most of your early retirement investing funds.

What About Economic and Market Downturns?

Investors in 2022 have been given a harsh reminder that equities can experience dramatic fluctuations. Everyone, including retirees, are also coping with some of the highest inflation rates in more than 40 years.

Now more than ever you might be grappling with the fact that your CAGR isn’t set in stone. However, you shouldn’t lose perspective on long-term retirement investment growth rates over the long term. There will always be good years and bad years in the market. One year you might see a 15 or 20 percent growth rate and the next you experience stagnation or even losses. Over the long term you should ideally see retirement savings growth average out to a healthy rate.

Not every sector is impacted equally by the current economic challenges the world is facing. For example, tech companies have seen significant drops while some energy companies have managed to stay in positive territory.

Not every investment is the same, and different industries and asset classes experience varying degrees of hardship depending on a number of complex variables.

The average retirement saver who runs a business or works 40-plus hours a week while raising children may not have loads of free time to analyze the market and micromanage their retirement savings accounts. That’s why companies like Fullerton Financial Planning exist.

The services offered by our investment managers and retirement planners are particularly important during difficult economic times. We strive to protect not only the principal investments of our clients but also the returns they’ve secured over the years.

Learn how we can help protect your nest egg by calling us at (623) 974-0300.