Have you ever wondered how much others actually save for their retirement?
Well, there’s little need for jealousy when it comes to retirement savings, as most Americans in their 50s are far from having saved enough for a comfy retirement.
According to Fidelity, you should have at least six times your annual salary saved up to be on the way to enjoying retirement. That figure is for those who are 50 years old. By 55, you should have seven times your annual salary saved up. Most Americans are far from reaching these milestones, as the average 401K account for those aged 50-59 has a balance of $174,100. Americans in this same age group typically set aside 10.1% of their paychecks towards their 401K. On the other end, employers matched about 5.1%, bringing the total to 15.2% of each paycheck.
Broken down by age, most young Americans are getting started on their 401K already, but they are falling short of experts’ recommendations by a fair amount. The average 401K balance and contribution for each age group is as follows:
20 to 29: $11,800; 7% of each paycheck
30 to 39: $42,400; 7.8% of each paycheck
40 to 49: $102,700; 8.5% of each paycheck
50 to 59: $174,100; 10.1% of each paycheck
60 to 69: $195,500; 11.2% of each paycheck
While there is no fully concrete answer to how much you should be setting aside for retirement, it’s clear that most of those in their 60s don’t have an ideal nest egg. While the decision of how much to contribute to retirement is subjective and personal, Fidelity recommends setting aside 15%, including your own contributions and your employer’s. It is also highly recommended that those in their 50s take advantage of what is normally their peak earning years, as they should contribute more if at all possible. If you can’t afford these contributions at the moment, it would be well worth it to work your way toward paying more towards your retirement. By age 67, you should have 10 times your salary saved if you wish to have a reasonably comfortable lifestyle into your retirement.