We’ve written a lot about savings and investment strategies in this space over the past several years, usually because studies indicate that many Americans are falling woefully behind on where they should be with retirement or don’t have adequate savings to fund even a small emergency expense. This post is in response to another similar study that was recently conducted by Fidelity, based on data from its retirement platform. Specifically, it assessed the average retirement savings amount that Americans in their thirties have tucked away.
And the findings, to an extent, are somewhat positive. Fidelity found that the average 401K balance for Americans ages 30 to 39 is $50,800 and the average contribution rate toward these savings is 8.3 percent. However, whether these Americans are on track with what financial experts suggest having saved at this point in their lives largely revolves around how much they earn. Let’s take a closer look at what certain benchmarks young Americans should be hitting when it comes to their retirement savings goals.
How Much Should You Save for Retirement?
So is that $50,800 average 401K amount good for someone in their thirties? It depends.
You see, the experts recommend having the equivalent of your annual salary saved by the time you’re 30 years old. So, for instance, if you’re earning $45,000 by the time you hit 30, you should have about the same amount in a 401K or IRA. But if you’re 39, earning $70,000 per year and only have the average $50,800 tucked away, you have some catching up to do.
Over the long term, it’s recommended that Americans aim to save up to 10 times their salary toward retirement. In order to do this, Americans should shoot to have the equivalent of their salary saved by 30, three times their salary saved by 40, six times their salary saved by 50, eight times their salary saved by 60 and then — ideally — 10 times their salary saved by the time they hit 67 years of age.
Smart Savings Strategies
So how can you start saving for retirement and get your savings goals back on track if they’ve veered off course? Here’s a look at some tips and strategies:
- Start saving immediately. As soon as you get your first job out of college, start allotting funds toward your 401K. Even if it’s just a little, it helps.
- At a minimum, save as much as your company will match. For instance, if your company matches up to 3 percent of your 401K contribution, make sure you’re at least contributing 3 percent to receive the full company match.
- Increase your contribution every year. Even if you don’t receive a pay increase, try to at least increase your contribution by a percentage point annually. If you receive a raise or are due a big bonus, consider contributing even more.
So based on suggested retirement savings goals, how do you stack up?
Saving that kind of money for the average person is a “dream” in this economy. We American taxpayers are going to be footing the bill for all of those Biden Administration’s Illegals coming into the country. Who says that most companies have 401Ks or IRAs ? There are many, many numerous articles out their today saying that the Federal Government is going after 401Ks and IRAs and can take your money from your bank or perhaps charge you with a large percentage rate once you go to get your savings . What the heck ??? My advice is just to save as much as you can. Some of these amounts suggested are just not realistic in the REAL world — especially for families.
this is all well and good until the gov’t takes it all or is that just hype? pretty soon it’ll just be the pillow where i’ll stash mine!
It’s not how much one has saved at age 30, it’s how much they calculate in eroded retirement after you retire. For example, I retired on FEB 15, 1997 with a very good retirement income. Then the Federal Government went on a spending spree…remember Bill Clinton and his partner in crime Barney Frank? They decided every American needed to own a home and suspended financial check of home loan customers who were approved for a home loan whether they could financially afford it or not. That Government boondoggle resulted in terrible inflation and for we retirees a loss of disposable retirement income, remember we Seniors don’t get raised like citizens still in the work place. I decided to calculate just how much we had lost due to inflation and raised other costs and interference by Government bureaucrats who didn’t know what the hell they were doing. From FEB 1997 to about 4-5 years ago I calculated that we had lost over 75% of our original retirement income. My wife and I are 82 years old and have been married for 64 years but we now manage our retirement income differently than when we first retired. Now we don’t use credit cards with the exception of one card which we pay off every month of the year so we don’t get charged with the credit card’s high interest rates. We will survive but what we did at age 30 is nothing like what we do today… That said possible millions of Senior retirees couldn’t afford the loss of 75+% of their retirement pay and are forced by Government and greedy Big business into deject poverty… AB