How much should you be saving?
Just getting started? Save what you can
If retirement is decades away, setting a specific goal amount is probably unnecessary. For now, focus on:
- Immediately saving at least enough to get the full match offered by your employer plan, if you have one. This is free money—don't let it pass you by.
- Working your way up to 12%–15% of your pay, including any employer match. For example, you could increase your savings rate 1% every year until you reach your target rate. This should get you in the ballpark of what you'll need.
Average retirement savings by age
Source: Vanguard, How America Saves 2018. This study examined employer retirement plans (and their participants) managed by Vanguard. Amounts reflect the average balance per account.
Average retirement savings by age
This chart shows average retirement plan account balances by age as of 2018. For people under age 25, the average account balance was $4,773. For people age 25 to age 34, the average account balance was $24,728. For people age 35 to age 44, the average account balance was $68,935. For people age 45 to age 54, the average account balance was $129,051. For people age 55 to age 64, the average account balance was $190,505. For people age 65 and over, the average account balance was $209,984.
Closer to retirement, narrow in on your goal
Two big factors weigh heavily on your retirement savings needs: how many years you're going to spend in retirement and how much you're going to need to withdraw each year.
Plan to spend at least 30 years in retirement—longer if you think you'll retire early. Medical advances are consistently extending the average lifespan.
Even if you don't plan to retire early, illness or other responsibilities could prevent you from working as long as you expected, extending your retirement on both ends.
Figuring out how much you're going to withdraw each year can also be a little tricky.
After you estimate your expected budget—which will depend on the lifestyle you expect to live in retirement—you'll need to take into account other income (like Social Security and any pensions or rental income you're expecting, for example) and calculate the difference.
What do others do?
In 2014, the average age people expected to retire was between 66 and 67. However, the actual age at which people did retire was 61.
Source: Gallup Poll Social Series, May 2018.
Learn more about retirement accounts at Vanguard
We offer several types of accounts you can use to save for retirement. Figure out which one is right for you.
LET VANGUARD DIGITAL ADVISOR® BE YOUR GUIDE
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For more information about Vanguard funds or ETFs, visit vanguard.com to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information about a fund are contained in the prospectus; read and consider it carefully before investing.
All investing is subject to risk, including the possible loss of the money you invest.
When taking employer plan withdrawals before age 59½, you may have to pay ordinary income tax plus a 10% federal penalty tax.
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