{"id":13775,"date":"2025-01-17T16:53:30","date_gmt":"2025-01-18T00:53:30","guid":{"rendered":"https:\/\/www.soundcu.com\/?p=13775"},"modified":"2025-09-29T15:35:21","modified_gmt":"2025-09-29T22:35:21","slug":"how-to-hit-retirement-benchmarks","status":"publish","type":"post","link":"https:\/\/www.soundcu.com\/blog\/how-to-hit-retirement-benchmarks\/","title":{"rendered":"Retirement Benchmarks by Age: How Much Should You Have Saved?"},"content":{"rendered":"<div class=\"co-flex_row co-flex_row__blue co-flex_row__last co-flex_row__long-form-text\" >\n\t<div class=\"co-flex_row--row co-row\">\n\t\t\t<div class=\"co-long_form\">\n\t\t\t\t\t<div class=\"co-long_form--block co-long_form--block__nomedia prow items-start \">\n\t\t\t\t<div class=\"co-long_form--text pcol-md:8\">\n\t\t\t\t\t<div class=\"co-long_form--content\"><p>You might be wondering how to hit those retirement savings benchmarks by age that financial experts always talk about. What are the recommended goals to hit in your 20s, 30s, 40s, 50s, and beyond? And more importantly, how can you actually get there? At <a href=\"https:\/\/www.soundcu.com\/\">Sound Credit Union<\/a>, we understand that these questions can be overwhelming to think about, and we are here to help ease the stress.<\/p>\n<p>This retirement guide will break down the benchmarks, show you the average savings by age, and share practical retirement planning advice to help you build the future you want.<\/p>\n<h2>What are Retirement Benchmarks by Age?<\/h2>\n<p style=\"text-align: left;\">The most commonly cited benchmarks come from <a href=\"https:\/\/www.fidelity.com\/\" rel=\"noopener\">Fidelity Investments<\/a>. They suggest you should aim to have saved:<\/p>\n<ul>\n<li><span class=\"bold\">By age 30:<\/span> 1x your annual income<\/li>\n<li><span class=\"bold\">By age 40:<\/span> 3x your annual income<\/li>\n<li><span class=\"bold\">By age 50:<\/span> 6x your annual income<\/li>\n<li><span class=\"bold\">By age 60:<\/span> 8x your annual income<\/li>\n<\/ul>\n<p>For example, if you\u2019re earning $50,000 a year at age 30, the benchmark would be $50,000 saved. At 40, if you\u2019re earning $70,000, you\u2019d aim for $210,000 saved. These numbers increase with your salary because your lifestyle often rises along with your income.<\/p>\n<p>These benchmarks can feel daunting, but remember you\u2019ve got time and the power of compound interest on your side.<\/p>\n<h2 style=\"text-align: left;\">What If You&#8217;re Behind on Savings?<\/h2>\n<p>If you\u2019re not where you want to be, you\u2019re in good company. According to <a href=\"https:\/\/www.bankrate.com\/\" rel=\"noopener\">Bankrate<\/a>, 57% of American workers feel like they\u2019re behind on their retirement goals. The good news? With the right retirement planning advice, you can still make progress. Even small changes in how you save and invest can help you close the gap.<\/p>\n<h2>Best Ways to Save for Retirement<\/h2>\n<p>Here are some of the most effective ways to build savings and hit those benchmarks:<\/p>\n<h3>1. Employer Sponsored Plans (401k)<\/h3>\n<p>For most people, a 401(k) is the single most powerful tool for hitting retirement benchmarks by age. These accounts are designed for long-term savings and often come with employer contributions that give your retirement balance a huge boost. If your employer offers a 401(k), start there.<\/p>\n<p>In 2025, contribution limits are:<\/p>\n<ul>\n<li><span class=\"bold\">Under 50:<\/span> Contribute up to $23,500<\/li>\n<li><span class=\"bold\">Age 50\u201359:<\/span> Contribute up to $30,500<\/li>\n<li><span class=\"bold\">Ages 60\u201363 (and 64+):<\/span> Contribute up to $34,750<\/li>\n<\/ul>\n<p>The real advantage of a 401(k) comes from tax benefits and employer matches:<\/p>\n<ul>\n<li>Contributions are made with pre-tax dollars (if traditional), which lowers your taxable income.<\/li>\n<li>Your money grows tax-deferred until withdrawal in retirement.<\/li>\n<li>Many employers match a percentage of your contributions, typically 3\u20136% of your salary. Not taking full advantage of this match is like leaving free money on the table.<\/li>\n<\/ul>\n<h4>401(k) Retirement Planning Advice<\/h4>\n<ul>\n<li>If you\u2019re just getting started, contribute at least enough to earn the full match.<\/li>\n<li>If you\u2019re further along, aim for 10\u201315% of your income, working toward the annual maximum if possible.<\/li>\n<li>Over time, as raises or bonuses come in, \u201cbank\u201d them by increasing your contribution rate, this is one of the best ways to save for retirement faster without feeling the pinch in your day-to-day budget.<\/li>\n<\/ul>\n<p>Most 401(k) plans include an employer match. Always contribute enough to get the full match; it\u2019s essentially free money and the best way to save for retirement faster.<\/p>\n<h3>2. Health Savings Accounts (HSA)<\/h3>\n<p>A health savings account is one of the most underutilized retirement savings tools, but it can be incredibly powerful if you qualify. To open one, you need to be enrolled in a high-deductible health plan (HDHP).<\/p>\n<p>Here&#8217;s why HSAs are unique: they offer a triple tax advantage:<\/p>\n<ol>\n<li>Contributions are tax-deductible.<\/li>\n<li>Funds grow tax-free.<\/li>\n<li>Withdrawals are tax-free when used for qualified medical expenses.<\/li>\n<\/ol>\n<p>After age 65, you can withdraw funds for any purpose without penalty (though non-medical withdrawals will be taxed as income). That effectively makes an HSA work like a traditional IRA, while still keeping the option of using it for medical costs along the way.<\/p>\n<h4>HSA Retirement Planning Advice<\/h4>\n<ul>\n<li>Treat your HSA like a supplemental retirement account by contributing the max each year and investing the balance rather than leaving it in cash.<\/li>\n<li>If possible, pay current medical expenses out of pocket instead of tapping your HSA. This allows the account to grow long term.<\/li>\n<li>In retirement, you\u2019ll be glad you have this extra pot of money since healthcare is one of the largest expenses retirees face.<\/li>\n<\/ul>\n<p>While your HSA probably won\u2019t cover all your retirement needs, it can play a helpful supporting role alongside your 401(k) and IRA.<\/p>\n<h3>3. Individual Retirement Accounts (IRA)<\/h3>\n<p>If you don\u2019t have access to a 401(k), or if you simply want to save more, an IRA is your next best option. These accounts are available to anyone with earned income, and they come in two main flavors: Traditional IRA and Roth IRA.<\/p>\n<p>Contribution limits for 2025 are:<\/p>\n<ul>\n<li><span class=\"bold\">Under 50:\u00a0<\/span>Contribute up to $7,000<\/li>\n<li><span class=\"bold\">Age 50+:\u00a0<\/span>Contribute up to $8,000<\/li>\n<\/ul>\n<p>Traditional IRAs give you a tax deduction now, while Roth IRAs allow your money to grow and be withdrawn tax-free in retirement.<\/p>\n<h4>Traditional IRAs:<\/h4>\n<p>With a Traditional IRA, the money you put in may lower your taxable income for the year, which means you could pay less in taxes now. Your savings then grow without being taxed along the way. When you retire and start taking the money out, those withdrawals are taxed as regular income.<\/p>\n<h3>Roth IRAs:<\/h3>\n<p>With a Roth IRA, you don\u2019t get a tax break upfront because you\u2019re contributing money you\u2019ve already paid taxes on. The big benefit comes later: your savings grow tax-free, and you won\u2019t owe any taxes when you withdraw the money in retirement. Plus, unlike other retirement accounts, Roth IRAs don\u2019t force you to take money out at a certain age, so you have more flexibility to decide when and how to use your savings.<\/p>\n<h4>IRA Retirement Planning Advice<\/h4>\n<ul>\n<li>If you expect to be in a higher tax bracket in retirement, a Roth IRA often makes more sense.<\/li>\n<li>If you need the tax break now, a Traditional IRA may be better.<\/li>\n<li>If your income is too high for Roth contributions, you can use the \u201cbackdoor Roth IRA\u201d strategy to still benefit from tax-free growth.<\/li>\n<\/ul>\n<p>Together with your 401(k), an IRA helps you diversify your retirement savings and makes it easier to reach those all-important retirement benchmarks by age.<\/p>\n<h2>How Much Do I Need to Retire?<\/h2>\n<p>A common rule of thumb is to save 15% of your annual income. If you consistently hit this mark, you\u2019ll likely get close to the retirement benchmarks by age. But life isn\u2019t always predictable, so if you can, \u201cover-contribute\u201d in good years by maxing out accounts or adding to a brokerage account. This flexibility gives you a cushion and helps you stay on track even if some years are leaner.<\/p>\n<h2>How to Save for Retirement: Strategies to Boost Savings<\/h2>\n<ul>\n<li><span class=\"bold\">Bank your raises and bonuses:<\/span> We understand, it\u2019s tempting to spend a raise or bonus on something fun, like a vacation, new car, or upgraded lifestyle. But if you put that extra income directly into your retirement account, you\u2019ll hardly miss it because you were already living on your old salary. Over time, these \u201cfound dollars\u201d can make a huge difference in how quickly you reach your retirement benchmarks.\n<ul>\n<li>For example, redirecting a $3,000 bonus into your 401(k) could turn into tens of thousands of dollars by retirement thanks to compound growth.<\/li>\n<li>This is not to say that treating yourself is not important; it is truly all about balance and budgeting.<\/li>\n<\/ul>\n<\/li>\n<li><span class=\"bold\">Negotiate your salary:<\/span> Asking for a raise or negotiating a higher starting salary at a new job isn\u2019t just about having more spending money; it\u2019s also one of the most effective ways to boost your long-term savings. Even a small increase, like 3\u20135%, can add thousands to your retirement balance if you consistently save the extra income.\n<ul>\n<li>Use online tools like <a href=\"https:\/\/www.glassdoor.com\/index.htm\" target=\"_blank\" rel=\"noopener\">Glassdoor<\/a> or <a href=\"https:\/\/www.payscale.com\/\" target=\"_blank\" rel=\"noopener\">Payscale<\/a> to research what others in your field earn, and prepare your case by highlighting your contributions, achievements, and value to your employer.<\/li>\n<\/ul>\n<\/li>\n<li><span class=\"bold\">Automate your savings:<\/span> One of the best ways to make saving painless is to set it on autopilot. Many retirement plans let you schedule automatic contributions from your paycheck. Better yet, you can set them to increase by 1\u20132% every year, often timed with your annual raise, so your savings rate grows without you feeling the pinch. This \u201cset it and forget it\u201d approach keeps you moving toward your retirement goals without relying on willpower or constant reminders.<\/li>\n<li><span class=\"bold\">Stick to a realistic budget:<\/span> A budget doesn\u2019t have to be restrictive; it\u2019s just a plan for where your money goes. The key is to make it realistic so you can actually follow it. If you set savings goals that are too aggressive, you may feel discouraged and give up altogether. Instead, aim for balance:\n<ul>\n<li>Cover your essentials<\/li>\n<li>Allow yourself some spending money<\/li>\n<li>Carve out room for retirement contributions. Even small, steady progress is better than big, unsustainable changes. Over time, consistency will get you much closer to your retirement targets than short bursts of over-saving followed by burnout.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>Want to see how you\u2019re doing today? Try Sound Credit Union\u2019s <a href=\"https:\/\/www.soundcu.com\/personal\/retirement-score\/\">Retirement Score tool<\/a> to measure your progress and get personalized guidance.<\/p>\n<h2>Retirement Planning Advice: Stay Encouraged<\/h2>\n<p>It\u2019s easy to compare yourself to the average savings by age, but remember that benchmarks are guidelines, not absolute requirements. If you\u2019re behind, don\u2019t panic. Focus on what you can control: earning more, saving more, and investing wisely.<\/p>\n<p>Celebrate small wins along the way and keep your eyes on the long-term goal. Retirement planning isn\u2019t about perfection; it\u2019s about consistent progress. You don\u2019t have to do it alone: <a href=\"https:\/\/www.soundcu.com\/\">Sound Credit Union<\/a> is here to help you plan, save, and stay on track. <a href=\"https:\/\/www.soundcu.com\/contact\/\">Contact us<\/a> today for support.<\/p>\n<p><!--\n\n\n<p style=\"text-align: left;\">If you need some advice on staying the course, consider meeting with our helpful <a href=\"https:\/\/www.soundcu-cfsinvest.com\/our-team\" target=\"_blank\" rel=\"noopener\">CFS* Financial Advisors<\/a>.<\/p>\n\n\n--><\/p>\n<\/div>\t\t\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\n\t<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>You might be wondering what are the benchmarks for retirement savings and how to hit them. Here&#8217;s some helpful advice to get you started. <a href=\"https:\/\/www.soundcu.com\/blog\/how-to-hit-retirement-benchmarks\/\">Continue reading <span class=\"meta-nav\">&rarr;<\/span><\/a><\/p>\n","protected":false},"author":13,"featured_media":13776,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","_searchwp_excluded":"","footnotes":""},"categories":[50],"tags":[],"class_list":["post-13775","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-life-finances"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/posts\/13775","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/users\/13"}],"replies":[{"embeddable":true,"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/comments?post=13775"}],"version-history":[{"count":4,"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/posts\/13775\/revisions"}],"predecessor-version":[{"id":16984,"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/posts\/13775\/revisions\/16984"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/media\/13776"}],"wp:attachment":[{"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/media?parent=13775"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/categories?post=13775"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/tags?post=13775"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}