Rule of thumb: Have 1x your annual income saved by age 30, 3x by 40, and so on. See chart below.
The sooner you start saving for retirement, the longer you 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%.
By looking at your retirement savings in 10-year increments and using age-based benchmarks, 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 the total amount of annual salary by age 30 and increase your savings by your annual salary every five years:
Your planned retirement age
The kind of lifestyle you want to have in retirement
One way to make the most of your retirement savings is to start by investing 5% to 15% of your paychecks in a tax-advantaged retirement account like a Traditional or Roth IRA , or Individual Retirement Account, or a 401(k) until retirement.
The power of compounding interest
Consistent saving and your retirement savings rate can have a big impact on your total return. The following example is based on the U.S. median household annual income of $74,580 in 2022 (according to 2021 U.S. Census Bureau data) and assumes an average annual return of 6%.
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. 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 currently paying back loans or other debts, don't panic. Aim to save for retirement while paying off debt simultaneously , putting away what you can while sticking to your loan repayment schedule.
Smart tools and strategies for savers of all ages
Organizing tools like buckets let you easily set goals and track your progress.
Automating your savings with recurring transfers or direct deposits can help you reach your goals faster.
Use budgeting templates to track your spending each month.
Prioritizing goals and staying organized can keep you from stressing over not saving enough for all the things you want to do with your money. When you have a plan for saving for multiple goals , it reduces the chance that something slips through the cracks.
The buckets tool in the Ally Bank Savings Account helps you organize your savings into separate digital categories and set specific goals for each, eliminating the need to open multiple savings accounts to track your progress.
To make your savings go even smoother, consider putting it on autopilot with recurring transfers. This allows you to automatically add money into your respective savings accounts, or by using the Surprise Savings booster in the Ally Bank Savings Account , you can ease some of the stress of reaching your goals.
Finally, remember that when you're saving money, every little bit you don't spend counts. Uncover savings opportunities 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 can act as a milestone to guide your savings. But you're never too young or too old to save for the goals that matter most to you.
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