How much should you have saved for retirement by 50? (2024)

Your 50s are a vibrant chapter in life. You’re probably earning more than you did a decade or two ago and have more time to pursue the activities that bring you joy. You also may be thinking about life after you leave the workforce, which may be only a few years away. So, this is a great time to gain clarity on your retirement savings, capitalize on timely opportunities and reduce your future risk.

How much should you have saved by age 50?

Generally, you should aim to have 6 times your annual salary when you come into your 50s, and up to 8 times by your 60th birthday.

How much should you have saved for retirement by 50? (1)

Keep in mind that this is a ballpark figure and assumes that you are retiring at age 65. You may need more or less, depending on your financial situation and goals for retirement.

5 factors that impact how much to save for retirement

The recommendation for five to six times your salary serves as a general guideline. Your plans and goals for retirement are unique to you, and so is your target retirement savings amount. Determining your target amount starts with getting a clear understanding of how much you will need to cover your expenses in retirement. Consider these factors:

1. Your retirement age.

If you plan to retire early, you will need to fund a longer retirement. That will require a higher-than-average amount of retirement assets.

2. Your anticipated lifestyle.

The rule of thumb is to plan on replacing about 80% of your pre-retirement income. But if you envision a significant lifestyle change like traveling extensively or paying for your grandchildren’s college tuition, you may need to increase your target savings amount.

3. Where you’ll live.

If you plan to move after you retire, be sure to research the cost of living and applicable tax laws of where you plan to live. You'll want to plan for a cost of living relative to where you are now.

4. How much Social Security you’ll get.

Estimates suggest a median wage-earner who was born in 1970 and retires at age 67 will have about 32% of their pre-retirement income replaced by Social Security benefits. You can determine how much Social Security income you can expect with the calculator on their website (you must create an account or sign in to access the calculator).

5. Your tax liability once you retire.

Many of your retirement income sources will be taxed once you start withdrawing the money in retirement. Even Social Security benefits may be subject to taxation. A high tax bill could have a substantial impact on your nest egg.

In the Thrivent Retirement Readiness Survey, respondents said that the most valuable piece of advice they would have given their younger selves would be to learn about tax implications for their retirement savings.1 Learning about your tax liability now could help you prepare for the future.

The most valuable piece of advice retirees would have given their younger selves would be to learn about tax implications for their retirement savings.

Thrivent Retirement Readiness Survey

Saving for retirement in your 50s

You might feel you’re late to the retirement planning game in your 50s. And you’re not alone. Our survey found that only a slight majority of people between ages 50 and 65 say they’ve done a “good amount of planning” for retirement, and they say they still have a ways to go.

Consider the following strategies to maximize your savings efforts in your 50s.

Take advantage of catch-up contribution limits

Throughout your 50s and beyond, you have the advantage of making catch-up contributions as an extra boost to your retirement savings. You're eligible to make catch-up contributions if:

  • You are at least 50 years old or will be before the end of the year
  • You participate in a retirement plan that allows catch-up contributions (401(k), 403(b), IRAs, etc.)
  • You've already met your regular contribution limit for the year

Catch-up contributions may lower your taxable income. Contributions to traditional retirement accounts are made with pre-tax dollars so increasing themdecreases your taxable income.If it's significant enough, the change could shift you to a lower tax bracket, saving you even more on your current year's tax bill.

Adding catch-up contributions into your budget can help ensure your nest egg will meet your needs when you leave the workforce.

Participate in employer-sponsored retirement plans

Employer-sponsored plans, like a 401(k), 403(b) or 457(b), let you make pre-tax contributions that will grow on a tax-deferred basis until you begin making withdrawals in retirement.

  • 2023 limit including catch-up contributions:$30,000
  • 2024 limit including catch-up contributions: $30,500

Check to see if your employer-sponsored retirement plan has an employer match program. The matching contribution is generally a percentage of your annual contribution to your plan, and capped at a percentage of your salary. Think of it as free money and take advantage of it, if you can.

Your employer may offer a Roth version of one of these retirement plans, like a Roth 401(k). The main difference is the timing of taxation. You fund Roth accounts with money you’ve already paid taxes on, so you won’t have additional tax liability once you start taking withdrawals. Paying taxes up front could be advantageous if you think you'll be in a higher tax bracket when you retire.

Supplement your savings with individual retirement accounts (IRAs)

If you don’t have access to a plan through your employer or just want to maximize your savings opportunities with a supplemental option, consider opening an individual retirement account (IRA).

  • 2023 limit including catch-up contributions:$7,500
  • 2024 limit including catch-up contributions: $8,000

You can choose between a traditional or Roth IRA, or have both.

  • Traditional IRAs: Your contributions are made with pre-tax dollars and may be tax deductible2, so you’ll pay tax on the money you withdraw in retirement. There are no income limits to participate. With a traditional IRA, you must begin making required minimum withdrawals (RMDs)between ages 73-75 (depending on your birthdate).
  • Roth IRAs: Your contributions are made with after-tax dollars so there is no additional additional tax liability when you begin withdrawing money. Roth IRAs have income limits for making contributions.3 How much you’re able to contribute depends on your tax filing status and your annual salary. Roth IRAs have no RMDs.
How much should you have saved for retirement by 50? (2)
How much should you have saved for retirement by 50? (3)

Are you on track for retirement?

Whether retirement is far away or fast approaching, now is a good time to plan for it. Our calculator is an easy way to start.

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How much should you have saved for retirement by 50? (4)

Investing for retirement in your 50s

Many people look to investing to help accomplish their retirement savings goals. But investing at this stage of your life requires some thought. The closer you get to retirement, the more market volatility can impact your funds, and you want to avoid wild swings in your account balance.

Your investment strategy depends on your retirement objectives and tolerance for risk so be sure to gauge your comfort level before investing. Common investing options include:

  • Stocks: Stocks can be a great way to build long-term wealth, but they can be subject to market fluctuations and volatility. This makes them appropriate for long-term investors with a higher risk tolerance.
  • Bonds. Bonds often are considered stable investments that can provide diversification. They’re typically a good fit for conservative investors. However, bonds are not guaranteed and can lose value, especially when interest rates are rising.
  • Mutual funds.Sincemutual fundsconsist of pooled money from many different investors and spread your money across a variety of investments, these versatile options can provide diversification and flexibility. You may want to consider a target date fund, which ties your investments' risk tolerance to the number of years until you retire.
  • Exchange-traded funds (ETFs).Like mutual funds, ETFs enable investors to purchase an interest in a diversified portfolio of securities. Unlike mutual funds, ETFs trade like stocks on an exchange, which means they can be bought and sold throughout the day. ETFs typically track the performance of an index like the S&P 500 and have lower fees than mutual funds.

Remember, that an investment strategy requires time and attention. Market ups and downs have a way of knocking your asset mix out of alignment, so you’ll need to rebalance your portfolio at specific intervals to avoid getting off track.

Building a strong foundation for retirement

If you’re not exactly where you want to be with your retirement savings, you’ve still got some time. And the more disciplined you are today, the better chance you’ll have of making your dream retirement a reality.

Retirement planning can be complicated, so it might be helpful to work with a professional who can guide you along the way. A Thrivent financial advisor can talk with you about your needs and create a customized retirement income plan especially for you—no matter where you’re at in your journey.

How much should you have saved for retirement by 50? (2024)

FAQs

How much should you have saved for retirement by 50? ›

How much money you should have saved by 50, according to financial experts. By age 50, most financial advisers recommend having five to six times your annual salary saved. While wages fluctuate quarter to quarter, the U.S. Bureau of Labor Statistics indicates the average annual salary is about $61,900.

How much money should I have saved by 50 for retirement? ›

How much money you should have saved by 50, according to financial experts. By age 50, most financial advisers recommend having five to six times your annual salary saved. While wages fluctuate quarter to quarter, the U.S. Bureau of Labor Statistics indicates the average annual salary is about $61,900.

Can I retire at 50 with 300k? ›

Can You Retire at 50 With $300k? It may be possible if you have low expenses and income from other sources. Assuming a 4% withdrawal rate, the funds might generate $12,000 of annual income. That's probably not enough for most people, and you typically don't get Social Security until your 60s.

Is 500k enough to retire at 50? ›

The short answer is yes, $500,000 is enough for many retirees. The question is how that will work out for you. With an income source like Social Security, modes spending, and a bit of good luck, this is feasible. And when two people in your household get Social Security or pension income, it's even easier.

Can I retire at 60 with 300k? ›

£300k in a pension isn't a huge amount to retire on at the fairly young age of 60, but it's possible for certain lifestyles depending on how your pension fund performs while you're retired and how much you need to live on.

How much should I have saved by 50 UK? ›

How much savings should you have at 50 and 60? In the UK, the average savings by age 50 should be £198,390 or the equivalent of six times your pre-retirement income. By age 60, the average savings should be £270,100 or the equivalent of eight times your pre-retirement income.

How much should I have in my pension at 50 UK? ›

At the age of 50, ideally, you would have wanted to save over 4 times your annual salary if you would like to retire comfortably. At this age, you should be considering putting 25% of your salary into your pension pot, if not more.

How to retire at 60 with no money? ›

Stick to a Budget

Making a retirement budget is essential if you have little to no money saved. Having a budget can help you track where your money is going and avoid overspending. When making a budget for retirement, it's good to consider where you can slash spending if you anticipate having limited income.

Can you retire at 55 with 250K UK? ›

Retiring at 55 with 250K – using the 4% rule

If you retire at 55 with 250K and use the 3-4% rule (safe withdrawal rate) you would have around 7.5-10K per year to live on (assuming this was your only income).

Can a couple retire on 500k UK? ›

On average for a comfortable retirement, an individual will spend £43,100 a year, whilst the average couple in retirement spends £59,000 a year. This means, if you retire at 55, £500k will fund an individual for 12 years and a couple for 8 years.

How much money do most people retire with? ›

What is the average and median retirement savings? The average retirement savings for all families is $333,940 according to the 2022 Survey of Consumer Finances.

What is the 4% withdrawal rule? ›

The 4% rule limits annual withdrawals from your retirement accounts to 4% of the total balance in your first year of retirement. That means if you retire with $1 million saved, you'd take out $40,000. According to the rule, this amount is safe enough that you won't risk running out of money during a 30-year retirement.

Is retiring at 50 realistic? ›

If you're fortunate enough to draw a large salary, you could afford to invest more modestly and still have enough wealth to retire by 50. If you don't have a high salary, you could use a more aggressive portfolio to help get you there.

What is a good monthly pension amount UK? ›

How much pension do you need to live comfortably? For a quick estimate, try the '50-70' rule. This suggests that you should aim for an annual income that is between 50% and 70% of your working income. So if you earn £50,000 now, you will want to achieve somewhere between £25,000 and £35,000 a year.

What is a comfortable retirement income UK? ›

According to figures from the Pension and Lifetime Savings Association (PLSA), a single person who owns their own home will need an income of more than £43,000 for a comfortable retirement this year, up from £37,300 in 2022-23.

How much money do you need to retire comfortably in UK? ›

The latest figures show that a single person will need: £14,400 per year for a minimum retirement. £31,300 per year for a moderate retirement. £43,100 per year for a comfortable retirement.

Can I retire at 50 with 100k? ›

Can you retire at 50 with $100k? It's certainly possible, but it won't be easy. Suppose you hope to retire at 50 with $100k in retirement savings and plan for a life expectancy of 80 years.

How much does the average 50 year old have in savings UK? ›

Average savings by age group
AgeAverage Savings
25-34£3,748
35-44£5,714
45-54£9,402
55-73£18,245
2 more rows
Jan 26, 2024

What to do if you are 50 and have no retirement savings? ›

Seek professional financial advice

If you need assistance or have questions about how to save for retirement, or how much, consider seeking professional advice. Brokerage companies like Fidelity and others offer one-on-one retirement planning, advice and overall coaching to help you reach your financial goals.

How much money does average 50 year old have? ›

Average net worth by age
Age by decadeAverage net worthMedian net worth
50s$1,310,775$292,085
60s$1,634,724$454,489
70s$1,588,886$378,018
80s$1,463,756$345,100
4 more rows

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