Set the right savings targets for every decade of your working life. Covers emergency funds, retirement benchmarks, major purchase savings, debt payoff timelines, and wealth-building strategies by age group.
savings by agehow much to savesavings milestonesretirement savings by agefinancial goals by decadesavings benchmarksmoney goals
Last updated:
0 of 17 completed0%
Estimated time: 1-2 hours to plan
Copied!
Your 20s: Build the Foundation
Build a 1,000 USD starter emergency fund as your first priority
Before investing or aggressive debt payoff, save 1,000 USD in a high-yield savings account (currently 4-5% APY). This prevents unexpected expenses from pushing you onto credit cards. The average unexpected expense is 400-600 USD (car repair, medical co-pay, appliance replacement). Having this buffer is the difference between a minor inconvenience and a debt spiral.
Pay off high-interest debt (above 7%) aggressively
Credit card debt (20-26% APR) and high-rate student loans (7%+) cost more in interest than you would earn from investing. Pay minimums on everything, then attack the highest-rate debt with all extra money. A 25-year-old who eliminates 10,000 USD in credit card debt and redirects that payment to investing gains approximately 200,000 USD more by retirement than someone who carries the debt.
Start contributing to your 401(k) at least up to the employer match
If your employer matches 50% of contributions up to 6% of salary, contribute at least 6%. On a 50,000 USD salary, that is 3,000 USD from you and 1,500 USD free from your employer each year. Starting at 22, this employer match alone grows to approximately 250,000 USD by age 65 at 10% average returns. Not contributing up to the match is literally leaving free money on the table.
Open and fund a Roth IRA
Your 20s are the most valuable decade for Roth IRA contributions because your tax rate is likely the lowest it will ever be. Contributing 7,000 USD per year from age 22 to 32 (10 years, 70,000 USD total) and then stopping completely still grows to approximately 1.2 million USD by age 65. Starting the same contributions at 32 would require contributing for 20+ years to reach the same amount.
Target saving 1x your annual salary in retirement accounts by age 30
Fidelity's retirement savings benchmarks suggest having 1x your salary saved by 30. On a 50,000 USD salary, aim for 50,000 USD across 401(k), IRA, and other retirement accounts by 30. This requires saving approximately 15% of income starting at 22. If you start at 25, you need closer to 20%. Starting early matters more than the specific target because compound growth does the heavy lifting.
Your 30s: Accelerate Growth
Build a full emergency fund of 3-6 months of expenses
Your 30s often bring higher expenses (rent increases, family, car payments). Upgrade from the starter fund to 3-6 months of essential expenses. If monthly essentials are 4,000 USD, target 12,000-24,000 USD in a high-yield savings account. This fund covers job loss (average search: 3-6 months), medical emergencies, and major home or car repairs without touching investments or taking on debt.
Increase retirement contributions to 15-20% of gross income
With higher income in your 30s, push retirement savings to 15-20% of gross pay across 401(k) and IRA. Max out your 401(k) (23,500 USD in 2026) if possible. Increase contributions by at least half of every raise. At 15% savings rate on a 75,000 USD salary, you are saving 11,250 USD per year. Combined with employer match and compound growth, this puts you on track for a strong retirement.
Start saving for a home down payment if homeownership is a goal
A 20% down payment on a 350,000 USD home is 70,000 USD. With a 3-year savings timeline, you need approximately 1,944 USD per month in a high-yield savings account (not invested in stocks due to the short timeline). An FHA loan requires only 3.5% down (12,250 USD), but you pay Private Mortgage Insurance (PMI) of 0.5-1% annually until you reach 20% equity. Saving more down payment reduces your total mortgage cost.
Target saving 3x your annual salary in retirement accounts by age 40
Fidelity's benchmark: 3x salary by 40. On a 75,000 USD salary, aim for 225,000 USD. If you started saving at 22 and contributed consistently, compound growth should get you close. If you are behind, focus on maximizing contributions and catching up. The gap between 2x and 3x can often be closed by increasing your savings rate by just 2-3% of income per year.
Your 40s: Maximize and Protect
Maximize all tax-advantaged account contributions
In your 40s, you are likely at or near peak earning years. Max out your 401(k) (23,500 USD), Roth IRA (7,000 USD), and HSA (8,300 USD family) every year. At age 50, catch-up contributions begin: an additional 7,500 USD for 401(k) and 1,000 USD for IRA. These limits represent approximately 38,300 USD per year in tax-advantaged space (46,800 USD at 50+). Use every dollar of it.
Review and optimize your investment allocation
By your mid-40s, consider shifting slightly more conservative: 70-80% stocks, 20-30% bonds (from 80-90% stocks in your 30s). Ensure international diversification (25-35% of stock allocation). Consolidate old 401(k) accounts from previous employers into a single IRA for easier management and potentially lower fees. Review expense ratios on all funds and switch to lower-cost alternatives if available.
Build your taxable investment account for early retirement or flexibility
If you plan to retire before 59.5 or want financial flexibility, you need accessible money beyond retirement accounts. Invest in tax-efficient index ETFs in a taxable brokerage account. Long-term capital gains (investments held 1+ year) are taxed at 0-20%, much lower than ordinary income tax rates. This bridge account fills the gap between early retirement and retirement account access.
Ensure adequate life and disability insurance
If others depend on your income, carry life insurance equal to 10-12x your annual salary. A healthy 40-year-old can get a 20-year, 1 million USD term life policy for 50-80 USD per month. Long-term disability insurance (covering 60% of income) costs approximately 1-3% of annual salary. Your employer may offer both, but verify the coverage amounts are sufficient for your family's needs.
Target saving 6x your annual salary in retirement accounts by age 50
Fidelity's benchmark: 6x salary by 50. On a 100,000 USD salary, aim for 600,000 USD across retirement accounts. If you are on track, maintain your savings rate. If behind, take advantage of catch-up contributions starting at 50, reduce expenses, delay retirement by 2-3 years (which has a massive impact due to extra contributions plus fewer years of withdrawals), or consider downsizing housing to free up savings.
Ongoing Goals at Every Age
Review insurance coverage annually
Health insurance, auto insurance, home/renters insurance, life insurance, and disability insurance should be reviewed each year during open enrollment. Compare quotes from 3 or more providers for auto and home insurance every 2-3 years. Bundling policies saves 10-25%. As your net worth grows, consider umbrella liability insurance (1-2 million USD coverage for 150-300 USD per year) to protect assets beyond standard policy limits.
Create or update your estate plan every 5 years
A basic estate plan includes a will, power of attorney, healthcare directive, and beneficiary designations on all accounts. Without a will, your state's intestacy laws determine who gets your assets. Update after every major life event (marriage, children, divorce, home purchase). An estate planning attorney costs 1,000-3,000 USD for a basic plan. Online services like Trust & Will cost 150-600 USD.
Avoid lifestyle inflation that matches every raise
The biggest threat to savings goals is spending increases that match income increases. When you earn 50,000 USD and spend 40,000 USD, you save 10,000 USD (20%). If your income rises to 80,000 USD but spending rises to 70,000 USD, you still only save 10,000 USD (12.5%). Save at least 50% of every raise and you will accelerate wealth building while still enjoying a higher standard of living.
Frequently Asked Questions
How much should I have saved by 30?
The widely cited benchmark from Fidelity is 1x your annual salary saved in retirement accounts by age 30. On a 55,000 USD salary, that means 55,000 USD in your 401(k), IRA, and other retirement savings combined. If you are behind, do not panic. Increasing your savings rate by 5% of income and maintaining it consistently allows most people to catch up by their mid-30s. Starting late is better than not starting.
What percentage of my income should I save?
The standard recommendation is 15-20% of gross income directed toward retirement savings (including any employer match). For total savings (retirement, emergency fund, and goals), aim for 20-25% of gross income. If you are starting late or have aggressive goals like early retirement, you may need 25-50%. The key is to start where you can, then increase the rate by 1-2% each year.
Am I behind on retirement savings?
Fidelity benchmarks: 1x salary by 30, 3x by 40, 6x by 50, 8x by 60. If you are behind, your most powerful tools are: increasing your savings rate (even 2-3% more makes a huge difference), taking advantage of catch-up contributions at 50, working 2-3 additional years (which has an outsized impact), and reducing expenses both now and in retirement. A financial advisor can model specific scenarios for your situation.
Should I save for retirement or pay off my mortgage?
Generally prioritize retirement savings up to at least the employer match, then the Roth IRA, before making extra mortgage payments. Mortgage interest rates of 3-7% are often lower than long-term investment returns of 7-10%. However, if being debt-free provides peace of mind, splitting extra money 50/50 between additional mortgage payments and retirement contributions is a reasonable compromise. The mathematical answer is invest, but the psychological answer depends on your comfort level.