Whether you are just starting your career or counting down to retirement, knowing where you stand financially is essential. This comprehensive 2025 guide breaks down exactly how much you should have saved at every age, compares your progress to national averages, and provides actionable strategies to close any gaps before retirement arrives.

Understanding Retirement Savings Benchmarks in 2025

Retirement planning has become more complex than ever, with rising healthcare costs, longer life expectancies, and economic uncertainty making it crucial to stay informed about current savings benchmarks. Financial institutions like Fidelity, Empower, and T. Rowe Price regularly publish guidelines to help Americans gauge their retirement readiness.

The fundamental question most people ask is straightforward: How much money do I need to retire comfortably? According to recent surveys, Americans now believe they need approximately $1.26 million to retire comfortably in 2025. While this number has actually decreased from the $1.46 million figure reported in 2024, it still represents a significant savings goal that requires decades of consistent investing.

The Fidelity Retirement Savings Guidelines

Fidelity Investments has developed one of the most widely referenced frameworks for retirement savings milestones. Their guidelines are based on research into retirement spending patterns, Social Security benefits, and investment growth rates. Here is what Fidelity recommends you should have saved at each age milestone:

Savings Milestones by Age

• Age 30: 1x your annual salary saved
• Age 35: 2x your annual salary saved
• Age 40: 3x your annual salary saved
• Age 45: 4x your annual salary saved
• Age 50: 6x your annual salary saved
• Age 55: 7x your annual salary saved
• Age 60: 8x your annual salary saved
• Age 67: 10x your annual salary saved

These benchmarks assume you plan to retire at age 67 and maintain your current lifestyle in retirement. If you want to retire earlier, you will need to save more. For example, retiring at age 65 requires approximately 12x your preretirement income, while delaying retirement to age 70 means you may only need 8x your final salary.

The 15% Savings Rate Rule

Fidelity also recommends saving at least 15% of your pre-tax income annually for retirement, including any employer match contributions. According to their Q3 2025 data, the average savings rate among American workers is currently 14.1%, which is remarkably close to this target. This suggests many workers are taking retirement planning seriously, though there is still room for improvement.

Average Retirement Savings by Age: 2025 Data

Understanding how your savings compare to others in your age group can provide valuable context. Here is what the latest data from Empower and Fidelity reveals about average retirement account balances in 2025:

Americans in Their 20s

Young workers are off to a strong start in 2025. According to Empower data, Americans in their 20s have an average retirement savings balance of $127,166, with a median balance of $39,432. The significant gap between average and median indicates that while some young savers have substantial balances, many are just beginning their retirement journey.

Interestingly, 20-somethings are outperforming expectations. Recent research shows that savers in this age group have accumulated approximately double the recommended balance according to traditional guidelines. This may reflect increased financial literacy, earlier access to 401(k) plans, and a generation that has witnessed economic uncertainty firsthand.

Americans in Their 30s

Workers in their 30s have an average retirement balance of $272,850, with a median of $95,661. When measured against Fidelity guidelines, savers in their 30s average approximately 103% of the 3x salary target, meaning this age group is largely on track.

This is the decade when retirement savings typically accelerate. Higher earnings, more employer benefits, and the power of compound interest begin working in earnest. If you are in your 30s and feel behind, remember that consistent contributions now will have decades to grow.

Americans in Their 40s

The average retirement balance for Americans in their 40s reaches $586,470, with a median of $221,819. This represents significant growth from the previous decade, though the gap between average and median balances continues to widen, highlighting disparities in savings behavior and income levels.

Your 40s are often peak earning years, making this a critical time to maximize retirement contributions. Many people also face competing financial priorities like college savings for children, mortgage payments, and caring for aging parents. Balancing these demands while maintaining retirement contributions requires careful planning.

Americans in Their 50s

Workers in their 50s have accumulated an average of $1,025,486 in retirement savings, with a median of $453,413. According to Empower data, savers in this cohort average approximately 112% of the 8x salary benchmark, suggesting many are ahead of schedule.

The 50s bring a significant advantage: catch-up contributions. Starting at age 50, you can contribute an additional $7,500 per year to your 401(k), bringing your total contribution limit to $31,000 in 2025. This provision recognizes that many people need to accelerate their savings as retirement approaches.

Americans in Their 60s

Those in their 60s have the highest average retirement balances at approximately $1.2 million. However, the average balance of $573,100 represents only about 88% of the 10x benchmark, as some retirees begin taking withdrawals while others continue working toward their goals.

A significant new provision for 2025 benefits workers aged 60-63: an enhanced catch-up contribution of up to $11,250 annually, higher than the standard $7,500 catch-up for those 50 and older. This allows workers in this critical pre-retirement window to make substantial additional contributions.

Why Average Retirement Savings Can Be Misleading

While averages provide useful benchmarks, they can paint an incomplete picture of retirement readiness in America. The Federal Reserve's Survey of Consumer Finances reveals a sobering statistic: over 54% of American households report having no dedicated retirement savings at all.

This means that average balances are heavily skewed by those who do save, making them appear higher than what a typical American actually has. The median figures, which represent the middle point where half of savers have more and half have less, often tell a more realistic story.

Factors That Affect Your Personal Savings Target

Your ideal retirement savings target depends on several personal factors:

• Desired retirement age: Retiring at 55 requires significantly more savings than retiring at 70
• Expected lifestyle: Travel, hobbies, and luxury spending require larger nest eggs
• Geographic location: Cost of living varies dramatically across the country
• Healthcare needs: Fidelity estimates a 65-year-old may need $172,500 for healthcare costs alone
• Social Security benefits: Your expected benefits affect how much you need from savings
• Pension or other income: Additional income sources reduce your savings requirement
• Homeownership status: Owning your home outright reduces retirement expenses

The 4% Rule: Making Your Savings Last

Once you have accumulated your retirement nest egg, the question becomes: how much can you safely withdraw each year? Financial planners traditionally recommend the 4% rule, which suggests withdrawing 4% of your initial retirement portfolio in the first year, then adjusting that amount for inflation each subsequent year.

Fidelity's updated guidance suggests a withdrawal rate of 4% to 5% of initial retirement savings may be sustainable over a 30-year retirement. This means if you have $1 million saved, you could withdraw $40,000 to $50,000 annually, adjusting upward for inflation each year.

According to Fidelity's research, most retirees need to generate approximately 45% of their retirement income from savings, with the remainder coming from Social Security and any pension benefits. The total income replacement rate typically falls between 55% and 80% of preretirement income.

Actionable Strategies to Boost Your Retirement Savings

Whether you are ahead of schedule or playing catch-up, these strategies can help maximize your retirement readiness:

1. Maximize Your Employer Match

If your employer offers a 401(k) match, contribute at least enough to capture the full match. This is essentially free money and provides an immediate 50% to 100% return on your contribution, depending on your employer's matching formula. Failing to capture the full match is leaving significant compensation on the table.

2. Increase Contributions Annually

Commit to increasing your retirement contribution by 1% each year, particularly when you receive raises. Many 401(k) plans offer automatic escalation features that handle this for you. Over time, these incremental increases compound significantly without dramatically affecting your take-home pay.

3. Take Full Advantage of Catch-Up Contributions

Once you reach age 50, maximize catch-up contributions. The additional $7,500 per year (or $11,250 for those aged 60-63) can add hundreds of thousands of dollars to your retirement savings over the remaining working years. For example, contributing the maximum catch-up from age 50 to 67 at a 7% annual return would add approximately $250,000 to your nest egg.

4. Consider Roth Contributions

Roth 401(k) and Roth IRA contributions are made with after-tax dollars but grow and can be withdrawn tax-free in retirement. If you expect to be in a higher tax bracket during retirement, or if tax rates increase generally, Roth contributions can provide significant advantages. Many financial planners recommend having both traditional and Roth retirement accounts for tax diversification.

5. Open an IRA in Addition to Your 401(k)

The 2025 IRA contribution limit is $7,000, or $8,000 if you are 50 or older. Contributing to an IRA in addition to your 401(k) provides additional tax-advantaged growth and may offer more investment choices than your employer's plan. Even if you cannot deduct traditional IRA contributions due to income limits, a non-deductible IRA can later be converted to a Roth.

6. Review and Optimize Your Investment Allocation

Your asset allocation should evolve as you age. Younger workers can typically afford more aggressive stock-heavy portfolios, while those approaching retirement should gradually shift toward more conservative allocations. However, even retirees should maintain some stock exposure to combat inflation over a potentially 30-year retirement.

7. Minimize Investment Fees

High expense ratios can dramatically erode your retirement savings over time. A 1% difference in fees can cost hundreds of thousands of dollars over a 30-year investing career. Prioritize low-cost index funds and ETFs, and review your 401(k) plan's fee structure. If your employer's plan has high fees and limited options, consider contributing only enough to capture the match, then directing additional savings to a low-cost IRA.

8. Avoid Early Withdrawals

Taking money from retirement accounts before age 59 1/2 typically triggers a 10% penalty plus income taxes. Even more costly is the lost growth on those withdrawn funds. Every dollar withdrawn early is a dollar that cannot compound over the remaining years until retirement. If you face financial hardship, explore all other options before tapping retirement funds.

What If You Are Behind on Retirement Savings?

If you find yourself significantly behind the recommended benchmarks, do not despair. Many Americans face the same challenge, and there are concrete steps you can take to improve your situation:

Assess Your Current Position Honestly

Start by calculating exactly where you stand. Add up all retirement accounts including 401(k)s, IRAs, pensions, and other designated retirement savings. Compare this to your current income multiplied by the appropriate age factor from the Fidelity guidelines.

Calculate Your Savings Gap

Determine how much additional savings you need to reach your goal. Use a retirement calculator to project how much you need to save monthly to close the gap, accounting for investment returns and remaining years until retirement.

Explore Ways to Increase Income

Consider negotiating a raise, pursuing a promotion, starting a side business, or taking on freelance work. Direct any additional income toward retirement savings. Even temporary income boosts can make a meaningful difference when invested early.

Reduce Expenses Strategically

Review your budget for expenses that can be eliminated or reduced. Housing and transportation are typically the largest expense categories and offer the most potential for savings. Consider downsizing, refinancing, or relocating to a lower-cost area.

Delay Retirement If Possible

Working even two or three additional years provides triple benefits: more time to save, more time for investments to grow, and fewer years of retirement to fund. Additionally, delaying Social Security benefits until age 70 increases your monthly benefit by approximately 8% per year beyond full retirement age.

Consider Phased Retirement

Rather than stopping work entirely, some employers offer phased retirement programs that allow reduced hours while maintaining some income and benefits. Part-time work in early retirement can significantly reduce the amount you need to withdraw from savings.

Healthcare Costs: The Hidden Retirement Expense

One of the most significant and often underestimated retirement expenses is healthcare. According to Fidelity's 2025 Retiree Health Care Cost Estimate, a 65-year-old individual may need approximately $172,500 in after-tax savings specifically to cover healthcare expenses throughout retirement.

This figure covers Medicare premiums, supplemental insurance, prescription drugs, and out-of-pocket costs, but does not include long-term care, which can add significantly to healthcare expenses. Consider these strategies to prepare for healthcare costs:

• Contribute to a Health Savings Account (HSA): If you have a high-deductible health plan, HSAs offer triple tax advantages and funds can be used for qualified medical expenses in retirement
• Research Medicare options carefully: Understanding Medicare Parts A, B, C, and D, along with supplemental coverage options, can help minimize out-of-pocket costs
• Consider long-term care insurance: Purchasing coverage in your 50s can provide protection against potentially catastrophic long-term care costs
• Maintain good health: Investing in preventive care and healthy habits now can reduce healthcare costs in retirement

Building Your Retirement Plan: Next Steps

Understanding retirement savings benchmarks is just the beginning. Here is a practical action plan to implement what you have learned:

1. Calculate your current savings rate: Determine what percentage of your income you are currently saving for retirement
2. Review your employer's 401(k) match: Ensure you are contributing enough to capture the full match
3. Check your target-date fund: If you use a target-date fund, verify the target date aligns with your planned retirement year
4. Schedule an annual retirement checkup: Review your progress against benchmarks at least once per year
5. Consult a financial advisor: A fiduciary financial advisor can help develop a personalized retirement strategy
6. Update your beneficiaries: Ensure your retirement account beneficiary designations are current
7. Consider tax diversification: Balance traditional and Roth contributions for flexibility in retirement

Conclusion

Retirement planning is a marathon, not a sprint. While the benchmarks and averages presented in this guide provide useful reference points, your personal situation, goals, and circumstances will ultimately determine your ideal savings target. The most important factor is taking action today, regardless of where you currently stand.

If you are on track with savings benchmarks, congratulations on your financial discipline. Continue your current approach while looking for opportunities to optimize. If you find yourself behind, remember that it is never too late to improve your financial future. Every additional dollar saved today will compound over time, bringing you closer to a secure retirement.

The new enhanced catch-up contribution limits for workers aged 60-63 in 2025 represent a significant opportunity for those in the final stretch before retirement. Combined with strategic planning, expense management, and potentially delayed retirement, even those who feel behind can meaningfully improve their retirement readiness.

Use the calculators linked below to model your specific situation, and consider consulting with a qualified financial advisor who can provide personalized guidance tailored to your unique circumstances and goals.