How much to have saved by every age is a perennial personal finance question, right up there with how to create a budget and how to start investing. But like most money-related decisions, there’s unfortunately no single magic number that’s going to apply to each person.
Fidelity suggests having your yearly income saved at 30, three times your income at 40, seven times your income at 55, and 10 times your income at 67. It uses your salary as a metric in order to “simplify your planning, and help you determine if you are on track throughout your working life”.
Morgan Stanley, too, subscribes to this rule of thumb, suggesting three times your salary at 40, six times at 50, eight times at 60, and 10 times by 67.
For many people, those numbers just aren’t feasible. Many people in their 30s, 40s and even 50s have no retirement savings. (A 2014 Australian study found that only 53 per cent of couples and 22 per cent of single people were on track to reach a comfortable retirement income.)
Fidelity acknowledges that they’re more guideposts than hard-and-fast rules. Perhaps a better way to think about retirement savings isn’t in terms of your current salary, but rather what your expenses are and will be: Do you want to maintain your current lifestyle? Downsize? Will you work at all? How much will your superannuation payout be?
No blueprint is right for everyone, but they all get at the same thing: At least have a frame of reference for how much money you’d like to have, and work toward it. Personally, I keep these figures in the back of my mind, but recognise that I likely won’t hit all of them. What about you? Do you follow any of these, or have you made up your own?
This article has been updated since its original publication.