How Much Should You Have Saved For Retirement By Age 30, 40, 50?

MINNEAPOLIS (WCCO) -- "How much money do I need to retire?" It's one of the most common financial questions put to advisers.

"The greatest fear right alongside of death is running out of money," Nick Foulks, director of advising at Great Waters Financial, said. "People are terrified about running out of money."

So, what should people be saving? Good Question. Investment company Fidelity offers its rule-of-thumb. At age 30, you should have the equivalent of one year of your annual salary saved. It should be three times by age 40, six times by age 50, eight times by age 60, and 10 times by age 67.

For some, that's sounds reasonable. For others, it seems like a big stretch.

"Sounds right. I'm sadly short, though. You know… raising kids, going to school, getting laid-off, etc.," Dobrila wrote on Facebook. On the contrary, Judy wrote, "Wow! I'll be 72 on 11-29. I either have to live to be 150 working every day or I'm in trouble."

Foulks suggests people look at these types of savings charts differently.

"It doesn't touch on so many different things that could be going on in a person," he said, pointing out schooling or parenting when people are younger.

Instead, he recommends people aim for saving 10% to 15% of their annual salary.

"What is the reality that you could actually live by, what is functional for you, what is reasonable for you?" he said.

Often, people ask him how much they need to retire looking for a hard number.

"It's really dependent on their lifestyle," he said. "I know that sounds like a super-generic statement."

He says how much someone needs to stop working also depends on their streams of income, like Social Security or a pension, whether or not they've paid off their home, the rate of return they expect to earn, and what their expenses will look like in retirement.

"That [the chart] gives you a goal to aim for and it seems a lot easier because to create a financial plan is way more complex," he said.

Either way, he suggested people should be really be saving at least 10% of their income by their mid- to late-30s.

He recommends contributing enough into a 401k to at least get an employer match. If that's not an option, he suggests putting money in an investment account over a savings ones because those are harder to access.

"These are reminders, consider them reminders that you need to be saving and thinking about the future," he said.

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