At 50 years old, retirement is just around the corner, marking a crucial transition where you should be preparing for a future without a steady paycheck, relying instead on your savings.

So, what is the appropriate amount to have saved by the time you hit 50? And how do most Americans measure up? Let’s explore some expert advice as well as statistics concerning individuals’ retirement savings by their 50th birthday.

Recommended Savings by Age 50

As per Fidelity’s guidance, your goal should be to save approximately six times your current salary by age 50. Achieving this will help you reach ten times your final salary by age 67, which is the standard retirement age for receiving Social Security benefits (making it an optimal time to retire since you can access your full retirement benefits). For example, if you earn $60,000 yearly, you should ideally have around $360,000 saved in a retirement account like a 401(k) by your 50th birthday.

Sadly, many people are significantly behind their savings goal of six times their salary by age 50. The Bureau of Labor Statistics indicates median earnings of $76,440 for men aged 45 to 54 and $59,852 for women. Thus, men would need approximately $458,640 saved, while women should aim for about $359,112.

However, research by the Motley Fool unveiled that the median retirement savings for Americans aged 45 to 54 stood at only $115,000 in 2022, which is considerably lower than the suggested amounts for both genders. Many individuals are not adequately preparing for their retirement and may find it challenging to replace their income in their senior years.

Setting Personalized Savings Goals

The guidelines provided by Fidelity serve as a helpful starting reference for establishing savings goals, but they may not apply universally. For instance, while women typically earn less than men, they generally live longer, suggesting they may require more retirement savings than men rather than less, as Fidelity’s model implies.

Furthermore, Fidelity’s estimates are broad generalizations that may not consider your unique retirement plans. If you intend to retire before age 67 to enjoy life sooner, you will need significantly more savings by age 50 than the suggested six times your salary. Early retirement means supporting yourself sooner and having a shorter timeframe for your investments to grow, which could lead to a reduced Social Security benefit if claimed before reaching full retirement age.

Consider your actual retirement spending plans and the age at which you want to retire. From there, you can calculate how much you need to save. For instance, if you desire an annual income of $50,000 in retirement, multiply that by 25 to determine the total savings needed (assuming you will withdraw 4% in your first retirement year, adjusting for inflation). Knowing your target savings amount allows you to utilize tools on Investor.gov to calculate the monthly savings needed to achieve your retirement goal.

Focusing solely on your savings amount at age 50 may not be the most beneficial approach. If you find yourself lagging behind but are committed to catching up by maximizing contributions and investing wisely, you can still reach your financial goals and enjoy a comfortable retirement in your 60s.

Ultimately, you should assess your current situation, identify your monthly saving needs to retire at your desired age, and automate contributions to your retirement fund to turn your retirement aspirations into reality.

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