Retirement Planning by Age: How Much at 30, 40, 50, 60
Age-specific retirement planning with clear benchmarks, catch-up strategies, and actions for your 30s, 40s, 50s, and 60s. Pair with our Compound Interest, 401(k) Limits 2025, and Take-Home calculators.
Pair this guide with EverydayBudd's Compound Interest, 401(k) Limits 2025, and Take-Home Salary calculators.
Introduction
"How much should I have saved by now?" is the most common retirement question—and the most confusing. Markets change, salaries fluctuate, and life happens. This guide gives you clear benchmarks by age, simple math to estimate your goal, and specific actions for your 30s, 40s, 50s, and 60s.
Focus on three levers: (1) savings rate, (2) time in the market, (3) investment costs/taxes. The earlier you automate contributions and keep fees low, the less heroic your catch-up needs to be later.
Understanding the Basics
Key Terms Explained
- Target nest egg ("Number") — Annual spending in retirement × 25–30 (a 3.3–4% withdrawal rule-of-thumb). Adjust up for longevity/healthcare risk.
- Savings rate — % of gross pay saved for retirement (employee + employer). Many households need 15%+ across a full career.
- Tax buckets — Pre-tax (401(k)/403(b)/Traditional IRA), Roth, Taxable. Diversifying buckets adds flexibility later.
- Asset allocation — Mix of stocks/bonds/cash aligned to your risk tolerance and time horizon.
- Fees & taxes — Prefer broad, low-cost index funds/ETFs; use tax-advantaged accounts first.
- Catch-up contributions — Extra amounts allowed from age 50 (and a higher "super catch-up" window in early 60s depending on plan).
- Sequence risk — Big market drops early in retirement can hurt; build cash buffers and adjust withdrawals when needed.
Step-by-Step Guide
Use EverydayBudd calculators as you go: Compound Interest, 401(k) Limits, and Take-Home Salary.
1) Know the age-by-age benchmarks (rule-of-thumb)
| Age | On-Track Nest Egg* |
|---|---|
| 30 | ≈ 1× current salary |
| 40 | ≈ 3× salary |
| 50 | ≈ 6× salary |
| 60 | ≈ 8–10× salary (closer to 10× if retiring before 67 or expecting higher expenses) |
*Rules-of-thumb—not prescriptions. High earners, late starters, or early retirees may need more.
2) Translate spending → goal
- Estimate retirement spending (today's dollars).
- Multiply by 25–30 to get a target range.
- Subtract pensions/guaranteed income; the remainder is what your portfolio must cover.
3) Choose your savings rate
- 20s–30s: aim for 15% of pay (employee + employer).
- 40s: push 18–20%.
- 50s+: add catch-ups and redirect debt-free cash flow.
4) Automate and escalate
- Auto-contribute every paycheck and auto-escalate +1%/yr until target.
- Rebalance annually or use a target-date index fund.
5) Age-by-age playbooks
In Your 30s — Build the Engine
- Hit 1× salary saved by 30 (or set a plan to reach it by 35).
- Capture full employer match, then raise to 15% total.
- Favor Roth in low/mid brackets; otherwise blend Roth + pre-tax.
- Keep fees tiny (broad index funds).
- Maintain a 3–6 month emergency fund so dips don't force withdrawals.
In Your 40s — Close the Gap
- Target 3× by 40 and 6× by 50.
- Increase savings 18–20%—each raise → +1–2% contribution.
- Consolidate old 401(k)s; avoid lifestyle creep.
- Retirement first vs. college if trade-offs arise.
In Your 50s — Catch-Up & De-Risk
- Use age-50+ catch-ups in workplace plans/IRAs.
- Pay off high-interest debt; consider being mortgage-light by retirement.
- Evaluate Roth conversions in low-income years.
- Reduce single-stock/RSU concentration; stay diversified.
- Draft a retirement income plan (Social Security timing, withdrawal order).
In Your 60s — Lock the Plan
- Aim for 8–10× salary by 60 (or a funding ratio covering 25–30× spending).
- Bridge to Medicare if retiring before 65 (healthcare plan).
- Decide Social Security strategy (delaying increases benefits).
- Hold 1–3 years of withdrawals in cash/short-term for buffer.
- Simplify accounts, beneficiaries, and estate documents.
Check Your Pace & Close the Gap
Model contributions and growth, then see your after-tax paycheck impact.
Advanced Strategies
- Three-bucket tax plan: Split contributions across pre-tax / Roth / taxable to control taxes later.
- Glidepath & rebalancing: Automate gradual equity reduction; rebalance 1–2×/yr.
- Backdoor & mega-backdoor Roth (if allowed): Convert after-tax dollars to Roth for more tax-free growth.
- HSAs as stealth retirement: Max an HSA, invest it, pay current medical from cash, and use HSA later tax-free.
- Pension/annuity integration: For longevity risk, consider a SPIA/DIA for a portion of needs.
- Sequence-risk guardrails: In retirement, use variable withdrawals (trim after poor market years) instead of a rigid 4%.
Common Mistakes to Avoid
- Waiting for "extra money" to start—time > timing.
- Chasing hot funds or concentrated single-stock bets.
- Ignoring fees/taxes—1% drag can erase years of progress.
- Skipping the employer match or stopping contributions during volatility.
- No plan for healthcare (pre-65 coverage, Medicare IRMAA).
- Under-insuring disability/life during peak earning years.
Frequently Asked Questions
Frequently Asked Questions
Conclusion & Next Steps
You don't need perfect markets to reach retirement—you need a repeatable plan.
Action Items
- Calculate your target nest egg (spending × 25–30).
- Set payroll contributions to hit your age benchmark; turn on auto-escalation.
- Rebalance annually; keep fees under 0.10% where possible.
- If 50+, add catch-ups and map a tax-smart withdrawal plan.
- Use EverydayBudd's Compound Interest, 401(k) Limits, and Take-Home tools to stay on track.
Related Tools & Guides
Get On-Track & Stay There
Set your savings rate, check take-home impact, and visualize growth to your number.