How Much Money Should the Average American Have Based on Age?

Knowing how much money to save for the future can be very daunting and difficult. It can be intimidating to start planning for buying a home, stacking up a nice emergency cushion, and preparing for retirement all at once. The good news is you don’t necessarily have to hire a financial adviser to know how much money you should be stashing away.

Based on your age, there are monetary milestones to make sure you’re accumulating enough cash for both your short-term and long-term goals. The general rule of thumb is to have 10 times your annual salary saved prior to retirement. But when you hope to quit working will impact the amount you’ll need to save.  As your salary increases throughout your career, you can take advantage of that additional income by increasing the amount you save every year. Here’s how you can save for your future:

25 years old: $0

stylish young woman

Start building up your emergency fund. | jacoblund/iStock/Getty Images

You are at the ripe age to begin saving for an emergency fund, along with evaluating when and how you’d like to spend the next few decades. You’re sorting what you want out of life in reference to your job and lifestyle and hopefully paying down any debt you carried over from college.

At 25, you should begin saving 20% of your after-tax income. This will get you pretty close to having almost a full year’s salary by the time you’re 30. Ideally, you can have this 20% taken out before you even receive your paycheck by setting it up with your human resources or accounting department at your job.

Next: What do you know about 401(k)s and IRAs? 

30 years old: 1X your salary

man in 30s looking at phone

Max out your 401(k). | fizkes/iStock/Getty Images

By now, you’ve likely settled into a career path that you enjoy, and you are hopefully receiving a salary that is suitable for your lifestyle. If you’ve managed to properly save for the past five years, you should be looking pretty good.

You’ll need to continue to save 20% of your annual salary over the course of the next five years. You should also be maxing out your 401(k) contribution up to your company’s match. This is free money, people. Are you unsure of whether you should be maxing out your yearly limit for your 401(k) or saving as much post-tax income as possible? A good rule of thumb is to max out your 401(k) and IRA, especially if your company is matching up to a certain amount. Once you’ve done that, put whats left into your post-tax savings.

Next: Are you prepared to invest? 

35 years old: 2X your salary

Happy confident young woman

Start investing to watch your savings grow. | UberImages/iStock/Getty Images

You’re sitting pretty with a fat chunk of change in the bank. You’ll want to start looking into investing some of your savings for that money to grow. The options are practically limitless when it comes to investing. The trick is deciding what risk you are comfortable with taking. At this age, you still have some time to figure out the lay of the land when it comes to investing, so do what feels right and seek advice if needed.

Next: Over the hill never looked so good. 

40 years old: 3X your salary


You’ll hopefully start to see some real returns. | Nandofotos/iStock/Getty Images

All of your hard work is paying off. Whether you choose to put some cash into stocks, CDs, real estate investments, mutual funds, or something more creative, you’ll need to determine whether your investments are paying off. You want this money to grow on its own.  It’s important to avoid a mini-panic when you’ve invested in the stock market, as it will always ebb-and-flow. Know when to stick around and when to pull out of the a certain market.

Next: Make sure your money is working for you.

45 years old: 4X your salary

man at laptop

You should have about four times your annual salary. | iStock/Getty Images

At this point, the compounding interest from your IRA or 401(k) contributions should really begin to show itself. That means you’re right on par for having four times your annual salary. At this point, you have likely decided whether you’ll be working through your early retirement years or you’ll be ready to kick the work can earlier than 65. Whichever the decision, you’ll want to adjust your savings goals accordingly.

Next: Think you’ll have a mid-life crisis?

50 years old: 5X your salary

athletic mature woman

Save some extra cash in case you have a midlife crisis. | Ridofranz/iStock/Getty Images

There is an extremely high possibility you had a bout with a little mid-life crisis or you’ve run into some unexpected expenses. All considered, saving 30% of your earnings should offset those expenses. And what’s even better is you’ve managed to save around five times your annual salary. Keep up the good work.

Next: Can you smell the sweet scent of unemployment yet? 

55 years old: 6 to 7X your salary

Happy senior couple standing on beach with arms outstretched

Now is the time to bump up the savings. | Ridofranz/iStock/Getty Images

There’s only 10 years left before you are retired, and in the best world you’ll be prepared. If you have the means to up your yearly savings goal by an extra 10%, now is the time to do it. As you know by now, 10 years will quickly pass, and you want to take advantage of your working years while you have them.

Next: Taking advantage of your last few years of employment.

60 years old: 8 to 9X your salary

professor, teacher

Time is ticking down to retirement. | monkeybusinessimages/iStock/Getty Images

Can you smell the roses? You’ve reached the absolute home stretch and successfully stocked up over around eight to nine times your yearly salary. This is a major achievement, not to mention the fact that you’ve dedicated a big chunk of your life to a career that has brought you both joy and fulfillment (at least we hope so). Your investments and retirement funds should be valiantly working for you. Make sure you’re doing everything in the next five years to reach your final financial goals.

Next: Did you become a millionaire? 

65 years old: 10 to 12X your salary

Senior man and woman couple embracing at sunset

Now you can enjoy retirement to the fullest. |

Congratulations! You have arrived to the sweet lifestyle of waking up whenever the heck you wish and enjoying the fruits of your many years of labor. You can start receiving your Social Security benefits to supplement your savings. Considering that you’ve planned accordingly, you should now be able to continue the same lifestyle you were living prior to retirement.  Way to go!