If You Have This Much Money At 50, You're Set Up For Retirement Success

Retirement savings can be a point of pride for a person while also introducing a decidedly hostile form of stress. For plenty of Americans, saving up for retirement feels like a massively uphill battle without any indicators as to whether it's going well. There's the obvious tell in how much money sits in your retirement accounts at any one time; if they're growing, you're obviously on the right track. But the speed at which your assets appreciate isn't always easy to judge.

As a potentially useful indicator, the rule of 72 suggests that invested capital doubles every seven years. So with all things being equal, your investments should be generally multiplying themselves on this timeline. If they aren't, you may be dealing with too much risk that hasn't paid off or taking too conservative an approach to your growth assets. Even with this in mind, though, as you continue on toward retirement, the stress level of a 401(k) or Roth IRA account that seemingly has too little money held within it can really ramp up.

Fortunately, there are some additional guideposts to be mindful of when reaching this pivotal age. Age 50 is an important number for a lot of reasons (you have around two doubling events left before you'll want to consider retirement, for one thing), and it is here when you can start to make catch-up contributions to your accounts with expanded limits. These guiding figures can help you more clearly visualize where you stand.

Experts aren't set in stone on what the exact figure should be, but they do agree that everyone's retirement planning is unique to their own circumstances. Instead of a dollar amount, suggestions for how much you should have put away rely on your income figure and range between three and six times that number by the time you're 50 years old. For example, if you're an average earner — $59,428 in September 2024, according to Forbes Advisor, rounded up to an even $60,000 for this exercise — that puts your savings goal at somewhere between $180,000 and $360,000.

It's fairly easy to do these calculations once you understand how to visualize the progression from initial deposit on through to your eventual drawdown. For reference, T. Rowe Price suggests a one- to 1.5-times figure at age 35, and one that's six to 11 times your income at 60 (placing these average numbers at up to $90,000 at 35 and a top goal of $660,000 by 60). To add another data point to the conversation, Fidelity recommends an eight-times savings goal by 60, arriving at $480,000. Now, if you aren't reaching these savings milestones, there's no need to start panicking; this won't help you set a course for success, after all.

At 50, you have the ability to begin contributing more into your retirement accounts (an additional $7,500 to 401(k) accounts and $1,000 extra for IRAs in 2024), and you still have plenty of years left to enjoy the fruits of your compound interest investments (here are 12, ranked). While starting early is best, making retirement savings a priority is a key shift that anyone can make to improve their financial future.

One of the most important factors in developing a well-rounded approach to retirement saving is consistency. Experts suggest allocating around 15% of your income to retirement savings (about $9,000 annually or $750 monthly for an average earner). Over the long term, this results in a potent retirement fund when paired with smart growth investments like ETFs and index funds. Indeed, you won't need to become a savant at picking stocks to balloon your retirement savings, just track with the market and you'll be totally fine!

It's worth noting that this 15% figure is a baseline, and includes any matching contributions you might receive from your employer (meaning, you may only need to deposit $4,500 annually to hit this example target). What's more, high earners with additional disposable income should consider investing even more in their future rather than front-loading their expenditures on things in the short term. As is always the case, by putting more away today, you can/will enjoy exponentially more financial stability in the future.

In addition to consistency, time is a factor that's either your ally or a potential hindrance. Not only should you carve out a solid portion of your salary to fund your future financial needs, you should start prioritizing this expense early on in your career. A good generalization is to start when you're halfway to age 50. At 25, you'll have spent a few years learning your craft after likely finishing off any technical education necessary. Those who have served in the military, meanwhile, and opted to retire after the initial contract, will be finishing up their collegiate education or looking to climb the ladder after a few years in their trade. (This said, while starting to save at age 25 is a good goal, of course earlier makes things easier still.)

Starting your retirement savings journey early gives you an attainable time frame to hit your targets. Matched with a 15% contribution figure in your budget, there doesn't need to be any stress heading through the coming phases of life when it comes to maintaining your savings pace. Life sometimes gets a bit messy, and certain action items can take a backseat for a time, but with a starting point in your 20s, you're likely capable of warding off the bulk of the negative pressure that might come from a few lost months or a downturn in contributions for a year or more. Remember, retirement planning is a long game, and an early start is your best asset for attaining midstream goals and your ultimate target at 50 and beyond.