Expert Contributor | By Terald Shaw, Financial Advisor CLTC, BFA, Thrivent
No matter your age, planning for your future retirement may seem like a long and complex journey. In fact, Thrivent’s 2022 Retirement Readiness Survey found that only 40% of Americans have ‘very much’ or ‘somewhat’ been able to achieve the retirement planning goals they have set for themselves.
However, there are time-tested ways to build a strong retirement plan that works with your life now, and tomorrow. The same survey found that adults who have a strong retirement plan are four times more likely to achieve some or all of their goals than those who did minimal planning.
Knowing how much to save for the retirement you envision is a foundational piece of achieving your retirement goals. Each decade of your working life serves as a guide to navigating the nuances of creating a strong retirement plan. We'll explore retirement planning in: Your 30s, 40s, 50s, 60s and beyond.
How Much Should You Have Saved for Retirement by Your 30s?
A good rule of thumb is to have one year's salary invested in a retirement account by the time you reach your 30s.
At this age, you may wonder if you need to start saving at all at this point. As a 30-something, time is on your side, and you have ample opportunity to save and get ahead.
How Much Should You Have Saved for Retirement by 40?
The general rule is to have three times your annual salary invested by the time you reach age 40.
Many people in their 40s must balance competing financial priorities like paying off student loans, saving for their children's college education and supporting aging parents. Even if you have a lot going on, if you feel behind there are actionable strategies to help you get on track.
How Much Should You Have Saved for Retirement by 50?
By your 50s, the general rule is to have six times your annual salary saved in a retirement account.
Your 50s are a great time to become proactive about your retirement planning. As you crunch your numbers, be cognizant of healthcare expenses and other risk factors that can jeopardize a retirement budget.
How Much Should You Have Saved for Retirement by 60?
In general, having eight times your annual income invested in a retirement account is a strong position to be in when you enter your 60s. The goal is to use the rest of the time to meet your unique retirement savings goal before retirement.
As you get closer to retirement, review your Social Security and other sources of fixed income and determine how much you’ll need to draw on retirement savings each year.
Smart Saving at Any Age
Whether it’s decades away or just around the corner, retirement is an exciting opportunity for you and your loved ones. By dreaming big and focusing on your readiness at every stage of your adult life, you’ll be better prepared to save what you’ll need to achieve your goals.
It’s OK if your savings aren’t exactly what you hoped they’d be, you always can adjust and find ways to save more effectively. For more detailed information and tips go to thrivent.com.
Thrivent and its financial advisors and professionals do not provide legal, accounting or tax advice. Consult your attorney or tax professional. Thrivent provides advice and guidance through its Financial Planning Framework that generally includes a review and analysis of a client’s financial situation. A client may choose to further their planning engagement with Thrivent through its Dedicated Planning Services (an investment advisory service) that results in written recommendations for a fee.
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Terald Shaw, Thrivent | connect.thrivent.com/terald-shaw
