The amount you save is by far the most important factor on whether you will be on track for a secure retirement. People often focus so much energy on how they invest those dollars, they often overlook the significance of how much they put away. The best part is that the amount you save is entirely controllable, while factors such as stock market performance, the economy, and inflation are largely out of your control.

It is important to step back and check if your total saved amount is on track. Fidelity Investments published a study* in 2020 that gives you an easy way to see if you’re in the ballpark to maintain your lifestyle once you retire. The study recommends how much you should have saved as a multiple of your current salary at various ages.

Here are the benchmarks Fidelity recommends you follow:

• By age 30, you should have the equivalent of your salary saved

• By age 35, you should have two times your salary saved

• By age 40, you should have three times your salary saved

• By age 45, you should have four times your salary saved

• By age 50, you should have six times your salary saved

• By age 55, you should have seven times your salary saved

• By age 60, you should have eight times your salary saved

• By age 67, you should have ten times your salary saved

While this is just a ballpark, Fidelity put a lot of research into these numbers. Everyone’s situation is different, so keep that in mind. There are factors you should consider. If you want to retire before age 67, you’ll need to have more savings at each age.  For instance, if you retire at age 62, then you should probably have 8 times your salary saved by age 55.  Or if you are lucky enough to have a pension plan, then you can reduce the amount you’ll need at each age. Or if you’ll want a lifestyle either much greater or much less in retirement, you can adjust the number. Lastly, if you’re income is the type that varies vastly from year to year, this type of benchmarking probably doesn’t work too well for you.

But if you’re like many people whose bulk of retirement savings is in 401(k) plans or IRAs and want to continue a similar post-retirement lifestyle, these benchmarks offer an interesting(and fast) perspective. If you’ve saved a lot more than these benchmarks, you’re in really good shape. If you’re way behind these numbers, then you’ll need to develop a new strategy that works for you. And if you’re pretty close to these numbers, keep your foot on the gas pedal so you don’t fall behind.

Feel free to contact me at rob@retirementnavigation.com if you would like to discuss this article or your personal situation.

Enjoy the Journey!

*How Much Do You Need to Retire, Fidelity Viewpoints, 7-24-2020. Assumes retirement at age 67, plan to maintain pre-retirement lifestyle in retirement, invests more than 50% on average of savings in stocks over lifetime, begin saving 15% of salary at age 25.