Long-term budgeting is difficult because most people can’t plan their lives 30 years ahead. Sure, they may have some idea of how they want things to look, but life is full of surprises and constantly changing.
Regardless of what people envision for retirement, I think most people would agree that it’s best to properly prepare for retirement financially, especially since things tend to get more expensive over time. While there really isn’t a one-size-fits-all solution, there is plenty of information that retirees can use to help them set goals for how much they should save and invest in retirement.
Two valuable sources of information are what experts recommend saving for retirement and how much people actually save. Experts at Fidelity, one of the world’s largest custodians of retirement assets, recommend that workers aim for certain benchmarks (expressed as a multiple of their annual salary) as they age.
In its recommendation, Fidelity assumes that a person will retire at age 67, save about 15% of their income every year starting at age 25 (including matching employer pension funds) and invest about half of their savings in stocks over their lifetime. Fidelity also assumes that employees plan to live similar lifestyles before and after retirement.
Based on these assumptions, Fidelity recommends that people save the equivalent of their salary by age 30 and double that by age 35, with savings increasing exponentially as they age. They should save eight times their salary by age 60, and then 10 times by age 67.
However, for the average American, this seems like a lofty goal, as increased inflation has significantly increased the cost of living. Data on actual retirement accounts also shows that Americans are saving far less than Fidelity recommends.
in 2025 In a report called “How America Saves,” Vanguard provided data on the retirement plans it administers, which have nearly 5 million members. According to the data, the average 401(k) balance for Americans 65 and older was just $300,000. in 2024 the median US salary was approximately $63,800, so a $300,000 savings would be approximately 4.7 times the median US salary. Also, Americans 65 and older had an average 401(k) balance of just $95,425, not even twice the average U.S. salary.