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Savings by age: How much to save in your 20s, 30s, 40s and beyond

March 23, 2022 • 11 min read

What we'll cover

  • The average savings balance by age group

  • How much you should aim to save by retirement  

  • Smart tools and strategies to help boost your savings 

No matter what stage of life you’re in, one thing will always remain the same: It’s never too late — or too early — to save money.

Your age is one of many factors in your personal financial picture. Understanding how long before you expect to reach certain life stages (such as retirement) is an important part of saving money. But don’t get discouraged if you haven’t started yet, need to hit pause, or fall behind. You can always get back on track.

If you’re wondering, “How much should I have saved?” now is the time to flip your mindset. Think, “How much could I save?” Read on to see just how much your savings today can turn into down the road.

Average savings by age

Wondering how your savings stacks up against your peers? According to the Federal Reserve’s Board Survey of Consumer Finances (SCF) , the average savings balance by age group was as follows as of 2019:

average savings by age group
Age group Average savings balance
Under 35 $11,200
35-44 $27,900
45-54 $48,200
55-64 $57,800
65-74 $60,400
75+ $55,600

How much you should have saved at every age

Fast answer:

  • The amount of money you should save is unique to your lifestyle.

  • You can reach savings goals by creating specific target amounts and dates.

  • Find extra money to save by cutting back spending and/or picking up a side gig.

While it’s useful to know how much people typically have saved by age, that figure doesn’t necessarily represent the amount experts think you should have saved by each age.

First things first: There isn’t a one-size-fits-all number. It’s important your savings — and savings goals — connect to your lifestyle. That includes everything from your income and the way you like to shop, to where you live, if you have a car, if you’re raising kids, pay rent or have a mortgage, and more. Everyone has their own magic number based on their budget.

You can find your magic number by creating specific savings goals. For example, you want to save for a treadmill that costs $1,000 to complete your home workout routine within the next six months. Being specific about your goals — and when you hope to accomplish them — will give you a framework for how much you need and how long it could take you to get there. Smart savings tools like buckets let you easily set goals, organize your savings and keep track of your priorities.

Remember, the key to saving for goals that are quickly approaching and those far off isn’t putting away massive amounts of money at a time. (Although a windfall of cash, like a tax refund, may help from time to time.) It’s really all about finding a savings amount that works for you — and staying consistent.

You can also think of your savings as a portion of your income. One popular framework — the 50/30/20 budget — dictates that 20 percent of your budget should go toward savings and debt repayment, while the 50 percent should go to needs and 30 percent to wants.

Here is what the 50/30/20 monthly budget would look like based on the average salaries of full-time and salaried workers across different age groups.

50/30/20 Monthly Budget

50/30/20 monthly budget
Age Group Average Monthly Salary 50% (Needs) 30% (Wants) 20% (Savings)
20-24 $2,890 $1,445 $867 $578
25-34 $4,160 $2,080 $1,248 $832
35-44 $4,883 $2,442 $1,465 $976
45-54 $4,992 $2,496 $1,498 $998
55-64 $5,000 $2,500 $1,500 $1,000
65 and up $4,368 $2,184 $1,310 $874

How much do you need to save in your 20s?

As you embark on your career and set the path for future finances, your 20s is the time to set strong savings habits. Using the 50/30/20 model, you could be aiming to save upwards of $500 every month (or as close to 20% as you can). Saving where and when you can and being strategic with cash windfalls (such as a bonus), and dedicating additional income (such as an annual raise) are a few ways you can work toward this goal.

How much do you need to save in your 30s?

Whether you’re starting a family, buying a house or launching a business, savings continues to be essential in your 30s. Saving upward of $800 each month can sound like a daunting task, but consistency is key as you work toward any savings goal. Continue to focus on your long-term strategy (and make sure you’re not saving too much in accounts designed for short-term goals alone).

How much do you need to save in your 40s?

In your 40s, you might be thinking about a career change, figuring out college education costs for your kids or have your eye on an early retirement. Whatever your goals, saving can help you get there. In this phase of your life, aiming to save nearly $1,000 or more each month can help set you up for this chapter – and the ones to follow.

How much do you need to save in your 50s?

With retirement on the horizon for many in their 50s, saving is more important than ever. Your mindset may be shifting into legacy planning or funding any potential healthcare needs. Based on average earnings, aiming to save about $1,000 monthly (or hitting that 20% goal) is a great way to ensure that your savings continue to build and fund your goals.

How much to save for retirement

Fast answer:

  • A general rule of thumb is to have one times your annual income saved by age 30, three times by 40, and so on. See chart below.

  • The sooner you start saving for retirement, the longer you’ll have to take advantage of the power of compound interest.

  • Aim to save 5% to 15% of your income for retirement — or start with a percentage that’s manageable for your budget and increase by 1% each year until you reach 15%.

The thought of saving a couple million dollars by your 60s or 70s can sound daunting, we know. That’s where breaking up your retirement savings with age-based benchmarks may help. By looking at your savings in 10-year increments, it’s easier to plan financially and put actionable savings steps in place.

One popular age-based savings recommendation for retirement is that you should aim to save your total salary by age 30 and increase your savings by your annual salary every five years. Here’s how that would break down each decade, beginning at age 30.

Retirement savings goal by age

retirementSavings
By age You should aim to save ...
30 1x your income
40 3x your income
50 5x your income
60 7x your income
70 9x your income
80 11x your income

Keep in mind the above is more of a guide than a strict plan. The amount you should save for retirement should be based upon factors including:

  • Your income

  • Your planned retirement age

  • The kind of lifestyle you want to have in retirement

For example, if you want to retire at age 62 and travel the world, you might need more savings than if you plan to retire at 70.

So, how do you begin to work toward these goals? One way is to start by investing 5% to 15% of your paychecks in a tax-advantaged retirement account until retirement. You can also work with a financial professional who can help you implement tools and solutions based on your lifestyle and income.

The power of investing

Your retirement savings rate can have a big impact on your total return. See below how much could be stashed away with consistent saving. The following example is based on the U.S. median household annual income of $67,521 in 2020 (according to 2021 U.S. Census Bureau data) and assumes an average annual return of 6%.

Compounded investing based on the age you started:

Power of Investing
Starting at Age Annual Retirement Savings Rate By Age 65 You'd Have ...
25 5% $531,607
25 10% $1,063,261
 25   15% $1,594,896
35 5% $271,565
35 10% $543,153
35 15% $814,732
45 5% $126,358
45 10% $252,728
45 15% $379,093

Dedicating 5% to 15% of your pre-tax income to retirement isn’t always possible. You may be starting a new career, paying back student loans, or have other financial obligations and aren’t able to save that much of your salary all at once. And that’s okay, because saving for retirement isn’t all or nothing. If that is the case, start with a percentage you’re comfortable with and increase your savings rate gradually by 1% each year until you reach the 15% mark. If you’re getting a 1% annual raise at the same time, you might not even miss the extra money from your paychecks.

Don’t panic if you’re currently paying back loans or other debts. If you have room to save for retirement at the same time, that’s great — aim to put away what you can while sticking to your loan repayment schedule. Once you’ve paid off a debt (like a car loan, student payments, credit card debt, etc.) consider transferring that monthly payment amount toward retirement instead.

No matter your age, tax-advantaged savings and investment accounts, such 401(k)s and Roth or traditional IRAs (Individual Retirement Account), can be used to start saving toward your goals.

If you’ve been saving for a while, make sure to give your retirement accounts regular checkups to make sure you’re on track for your goals.

Expert Tip: You can increase your contributions to your 401(k) by saving enough to qualify for your employer’s full match (if one is available). For example, if you set aside 5% of your annual paycheck in your 401(k) and your employer matches 100% of your contributions up to 5%, the annual contribution to your retirement fund will be 10% of your yearly salary. Employer-sponsored retirement programs differ, so check with your employer for eligibility.

Emergency fund savings

Fast answer:

  • Rather than using your age as a guide to determine how much you should have  saved for emergencies , you could start with your monthly expenses.

  • A popular mindset is that an emergency savings account should ideally hold three to six months’ worth of expenses that’s easy-to-access.

  • To keep your emergency savings accessible, consider an online savings account rather than a Certificate of Deposit (CD) or investment account.

It’s inevitable: Life throws you financial curveballs. Whether it’s your dog swallowing a chew toy and needing a trip to the vet or your car needing a new transmission, there are moments when an  emergency fund  can save the day. Emergency funds — It’s all about your monthly spending.

Emergency funds — It’s all about your monthly spending

The ideal size of your emergency fund will likely fluctuate throughout your life based on your monthly expenses. Rule of thumb? Aim to have three to six months’ worth of expenses set aside.

We know this can feel impossible, especially if you’re just starting out. Remember, you don’t have to build an emergency fund overnight. Instead, focus on consistently putting away what you can afford. Strategies like microsaving can help you find safe-to-save money you might not have realized you had.

To figure out how much you should have saved for emergencies, simply multiply the amount of money you spend each month on expenses by either three or six months to get your target goal amount. We’ve mapped out what that would look like based on national averages in the table below.

emergency funds
Age Group Average Monthly Expenses 3 Months of Emergency Savings 6 Months of Emergency Savings
Under 25 $3,172 $9,517 $19,034
25-34 $4,803 $14,410 $28,820
45-54 $6,232 $18,696 $37,392
55-64 $5,411 $16,233 $32,466
65 and older $3,965 $11,895 $23,790

Keep in mind: The national averages shown above may not resonate with your lifestyle, as everyone’s situation is different. While you might choose to use these numbers as a benchmark, it’s more important to determine how much of your own monthly spending goes toward essential purchases and aim to save three to six times that amount.

Expert tip: Don’t know how much you spend each month? Find out by tracking your own spending to see how  much you actually need  month-to-month. Once you have a good idea, plug your numbers into our  emergency savings account calculator . You’ll even get an estimate of how long it will take to reach your goal based on how much you put away each month. Learn more about how to start saving for an emergency fund.

Where to stash your emergency cash

Where you keep your money is also an important decision. An emergency savings account needs to be accessible. You may want to find an interest-bearing deposit account – as long as it’s liquid (like the  Ally Bank Online Savings Account ). While investment accounts or other savings tools (such as CDs) may have more earning power, liquidity is important for short-term savings goals like emergencies.

Keeping your emergency fund in a savings account that earns a competitive interest rate means you don’t have to jump through any extra hoops to get cash when you need it. Plus, your money could earn interest at a potentially competitive rate — meaning it’s growing all the time. With other savings tools, such as CDs, you may have to wait until its maturity date to pull money out. Or, if you withdraw it early, you may have to pay a penalty. Drawing money out of an investment account could also trigger tax consequences, plus it usually takes several days before the cash hits your bank account.

Expert tip: Take advantage of tools and technology to help you reach your goals. With Ally Bank’s Online Savings Account, you can supercharge your savings with smart savings tools like Recurring Transfers and Surprise Savings, so you can reach your savings target even faster.

Smart tools and strategies for savers of all ages

Fast answer:

  • Smart savings tools like  Ally Bank’s Buckets , a feature of our Online Savings Account, let you easily set goals, organize your savings and keep track of your priorities.

  • Microsaving can help you reach your savings targets even faster.

  • When in doubt, consider automating your savings with recurring transfers or direct deposits.

  • Use  budgeting templates  to help keep track of your spending each month.

Prioritizing and staying organized can keep you from stressing over not saving enough for all the things you want to do with your money. If you’ve got a plan for saving for multiple goals, it reduces the chance that something slips through the cracks.

For example, say you want to adopt a dog a year from now and purchase a home three years after that. You can afford to save $800 a month toward both items. In this instance, you might sock away $100 each month for puppy preparation and $700 for the down payment on a house. After you adopt your new fur-ever friend, you can redirect that $100 over to your home savings fund.

The  buckets tool  in the Ally Bank Online Savings Account helps you organize your savings into separate digital envelopes and set specific goals for each, eliminating the need to open multiple savings accounts to track your progress.

To make saving go even smoother, consider going on autopilot. By automatically diverting a portion of your paycheck, initiating recurring transfers into your respective savings accounts, or using the  Surprise Savings booster  in the Ally Bank Online Savings Account, you can ease some of the stress of reaching your goals.

Finally, remember that when you’re saving money, every little bit counts. If you aren’t able to stash larger chunks of cash at once, that doesn’t mean saving is out of the question. By using microsaving strategies (or putting aside small amounts of money, usually less than $2 at a time), you can consistently add to your savings without the pressure of large dollar amounts.

Expert tip: Set yourself up for financial success by finding the budgeting style that works for you and using our  easy-to-use budget templates .

You’ve got this

When mapping out your financial future, age may act as milestones on the path to financial freedom – something that will be different for every individual. These milestones can help remind you of why you’re saving and visualize what today’s savings can look like later on. And remember, you’re never too young or too old to save for the goals that matter to you.

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