The Financial Milestones You Should Hit at Every Age (and Most People Don’t)
Online personal finance columnists and social media influencers recite common money milestones designed to measure where you stand among your peers and show how you stack up against others your age — but mostly, they just tend to make people feel lousy about their progress.
That’s why many experts suggest taking inventory of your overall financial health at any age, rather than focusing on predetermined, demographically based dollar amounts.
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The following showcases common savings benchmarks that you should aim for at every age, but that — if you’re like most people — you might not achieve, along with a look at what you should strive for instead, regardless of how many trips you’ve taken around the sun.
Under 35
Fidelity outlines a widely cited age-based milestone that suggests having 1X your annual salary saved by age 30. According to the Bureau of Labor Statistics, the median full-time wage earner or salaried worker earns $1,204 per week, or $62,608 annually.
However, Kiplinger reports that the median savings for those under 35 is just $18,880.
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30s
The Fidelity benchmark recommends saving 2X your annual earnings by age 35 and 3X by 40. Using the BLS national median, that’s $125,216 and $187,824, respectively. However, the Kiplinger report found that the median savings for those ages 35 to 44 falls far short at just $45,000.
40s
Experts recommend aiming to save 4X your annual salary ($250,432 for the median earner) by age 45 and 6X your yearly pay ($375,648) by age 50. Unfortunately, the median middle-aged saver only just breaks into six-figure savings, with $115,000 between ages 45 and 54.
50s
In the run-up to retirement, the milestone shifts to 7X your annual salary at 55 and 8X by 60. That’s $438,256 and $500,864, respectively. A long way from a half-million bucks, however, is the median 55- to 64-year-old, who has just $185,000 saved.
60s
Conventional personal finance wisdom suggests saving 10X your annual salary by 67, which is the full retirement age for most people. That’s $626,080, a nice, plump nest egg — and one that’s more than three times the size of the $200,000 the median 65- to 74-year-old has saved for retirement.
Don’t Use Dollars as the Only Yardstick
If you haven’t met the savings marks that experts recommend according to your corresponding decade, don’t worry. You’re in good company with a large majority of Americans. Instead, Ally recommends working toward more nuanced age-based goals.
20s: Start saving a little from every check, establish your credit and consider investing.
30s: Avoid debt, start goals-based saving and work with a financial advisor.
40s: Maximize your income and concentrate on investing.
50s: Take advantage of catch-up contributions, pay off your mortgage and other loans and begin retirement planning.
60s: Strategize for Social Security and budget for retirement income and spending.
Aspirations for All Ages
No matter your age, focus on the following personal finance best practices, which don’t discriminate by birth year.
Save three to six months of essential expenses in an interest-bearing, FDIC-insured account.
Create an estate plan or at least put a basic will in place.
Maximize contributions to tax-advantaged accounts and, if applicable, always contribute enough to secure your full employer match.
Aim to eliminate toxic debt.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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