How Much Should You Have Saved for Retirement by Age?
Fidelity says save 10x your salary by 67. The median American has 1.2x at 60. See the benchmarks, the gap, and how to close it at every age.
There is a number in your head right now. It is the amount you think you should have in retirement savings by your age, and there is a decent chance it is wrong. Not because you are bad at math, but because nobody gave you a clear target.
Fidelity has one. It is the most widely cited set of retirement savings benchmarks in the industry: save 1x your salary by 30, 3x by 40, 6x by 50, 8x by 60, and 10x by 67. Those targets assume a 15% total savings rate, retirement at 67, a plan through age 93, and roughly 45% income replacement from savings while Social Security covers the rest.
The problem is not the benchmarks. It is how far most Americans fall short.
Retirement Savings by Age: How Far Behind Is the Average American?
According to Vanguard’s How America Saves 2025 report, the median 401(k) balance for workers aged 55 to 64 is $95,642. Fidelity’s guidelines say someone earning $80,000 should have $640,000 by 60. That is a gap of more than $544,000.
Here is the full picture of retirement savings by age, comparing Fidelity’s targets (at $75,000 salary) against actual median 401(k) balances.
| Age Range | Fidelity Target (at $75K salary) | Median 401(k) Balance (Vanguard 2025) | The Gap |
|---|---|---|---|
| Under 25 | Building habits | $1,948 | Starting line |
| 25 to 34 | $75,000 (1x by 30) | $16,255 | $58,745 |
| 35 to 44 | $225,000 (3x by 40) | $39,958 | $185,042 |
| 45 to 54 | $450,000 (6x by 50) | $67,796 | $382,204 |
| 55 to 64 | $600,000 (8x by 60) | $95,642 | $504,358 |
| 65+ | $750,000 (10x by 67) | $95,425 | $654,575 |
The average 401(k) across all Vanguard participants was $148,153, but the median was just $38,176. That nearly 4x gap tells you the distribution is heavily skewed by a small number of high savers.
What Makes Your 20s the Most Valuable Decade?
Time. Nothing else comes close.
At $500 per month with an 8% annual return, starting at 25 produces roughly $1.3 million by 65. Start the same contribution at 35, and you reach approximately $490,000. Start at 45, roughly $150,000.
The 25-year-old contributes $240,000 total. The 35-year-old contributes $180,000. Despite putting in $60,000 less, the early starter finishes with $810,000 more, because roughly 82% of the final balance is compound growth, not contributions.
The Fidelity target for this decade is 1x your salary by 30. Gen Z’s average 401(k) balance is $13,500. That is a start, but the priority is simple: contribute enough to capture your full employer match. That match is a 100% return on day one.
Can You Still Catch Up in Your 30s and 40s?
Yes, but the math gets less forgiving every year you wait.
Your 30s bring competing demands: housing, children, student loans. They also bring peak earnings growth. If you push your savings rate from 6% to 15% during this window, you recover most of the ground lost in your 20s. The 2026 401(k) limit is $24,500, with IRAs at $7,500.
By your 40s, the Fidelity target is 6x salary by 50. The median 401(k) for ages 45 to 54 is $67,796. For someone earning $80,000, the target is $480,000. That median is 14% of the benchmark. The levers are concrete: max out your 401(k) and IRA, eliminate high-interest debt, and consider an HSA as a stealth retirement vehicle. The 2026 HSA limit is $4,400 for individuals and $8,750 for families, with a triple tax advantage: deductible going in, tax-free growth, tax-free withdrawals for medical expenses.
What Are Catch-Up Contributions and the New Super Catch-Up?
Starting at age 50, the IRS lets you contribute above the standard limits. In 2026, that means an extra $8,000 in your 401(k) (bringing the total to $32,500) and an additional $1,100 in your IRA (total $8,600).
SECURE 2.0 added a “super catch-up” for ages 60 to 63: $11,250 above the base 401(k) limit, for a total of $35,750 in 2026. One change to note: if you earned more than $150,000 the prior year, catch-up contributions must go into a Roth account.
This is also the decade to think seriously about Social Security timing. Each year you delay past 62 increases your benefit by roughly 6% to 8%. The average monthly benefit in 2026 is $2,071, or $24,852 per year. Social Security replaces roughly 40% of pre-retirement income for the average earner. It was never designed to be your only income source.
How Much Can You Safely Withdraw in Retirement?
The “4% rule” has been the go-to withdrawal guideline for decades. Morningstar’s 2025 research now sets the safe starting rate at 3.9% for 2026 retirees, assuming a 90% probability your money lasts 30 years. Higher bond yields moved it up from 3.7% in 2024, but it remains below the original 4%.
On a $500,000 portfolio, 3.9% gives you $19,500 per year. On $1 million, $39,000. Add the average Social Security benefit ($24,852), and a retiree with $1 million draws about $63,852 annually before taxes.
That sounds workable until you factor in healthcare. Fidelity estimates a 65-year-old retiring in 2025 needs $172,500 in after-tax savings just for healthcare over their retirement. For a couple, roughly $345,000. This assumes Medicare enrollment and does not include long-term care.
Flexible spending strategies, like guardrails-based withdrawals and delaying Social Security to 70, can push the safe rate as high as 5.7%. Delaying Social Security from full retirement age to 70 increases the monthly benefit by 24%.
Does Virginia Offer Any Retirement Tax Breaks?
If you live in Virginia, the answer is yes.
Social Security benefits are fully exempt from Virginia state income tax. Residents 65 and older can take an age deduction of up to $12,000 (phasing out at $1 per $1 over $50,000 AGI for single filers, $75,000 for married). Military retirees can subtract up to $40,000 starting in 2025. State income tax rates range from 2% to 5.75%, making Virginia moderately retirement-friendly for Social Security recipients.
Is It Ever Too Late to Start?
No. The math is less dramatic, but it is not hopeless.
Starting at 45 with $500 per month at a 7% return accumulates roughly $260,000 by age 67. Combined with Social Security, catch-up contributions, and smart tax planning through a Roth IRA, that builds a real foundation. Fidelity’s data shows 401(k) participants saving continuously for 15 years had an average balance of $617,600 as of Q4 2025. Consistency is the dominant variable.
The benchmarks exist to give you a target, not to make you feel defeated. Whether you are 25 or 55, the single most important step is the next contribution you make.
Ferrante Capital LLC is a registered investment adviser. Information presented is for educational purposes only and does not constitute investment advice, a solicitation, or a recommendation to buy or sell any security. All investing involves risk, including the possible loss of principal.
FC and its principals may hold positions in securities or asset classes discussed in this article. This analysis is for educational purposes only and does not constitute a recommendation to buy, sell, or hold any security.
Forward-looking statements reflect Ferrante Capital’s current analysis and involve assumptions and estimates. Actual results may differ materially. Past performance is not indicative of future results.
Please consult a qualified financial professional before making investment decisions.
