When you reach age 50, retirement may still be a decade or more away. But at the same time, you're probably aware that you don't have all the time in the world to save for retirement.
Wondering how much you should have saved for retirement by age 50? Read on for some common guidelines, as well as insight on how you stack up to your peers in terms of savings.
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How much should you have saved by age 50?
By the time you're 50, you typically want about six times your annual salary saved, according to Fidelity's oft-cited retirement savings by age guidelines. The U.S. Bureau of Labor Statistics reported that the median weekly earnings for a full-time worker was $1,143 in the second quarter of 2024, which translates to an annual salary of $59,436. That means if you have a relatively average salary, you'd want to have nearly $360,000 saved for retirement by age 50.
Fidelity assumes the following in its age-based savings recommendations:
- You started saving 15% (including any company 401(k) match) of your annual income for retirement at age 25.
- Your goal is to retire at age 67, which is Social Security's full retirement age for anyone born after 1959, and maintain your pre-retirement lifestyle.
- You'll limit your annual retirement withdrawals to 4% to 5% of your initial savings balance.
What's the average retirement savings at age 50?
According to Vanguard's "How America Saves Report 2024" the average 401(k) balance for workers ages 45 to 54 was $168,646. But a relatively small number of big savers could push up the average balance. The median balance for savers between the ages of 45 and 54 was significantly lower at $60,763.
Not surprisingly, savings balances tend to climb over time thanks to the power of compounding, along with the fact that earnings tend to get higher with age. For example, workers 65 and older had average savings of $272,588 and a median savings balance of $88,488.
What if my savings falls short?
As you can see from the numbers above, a lot of Americans aren't anywhere close to the recommended savings level. But here are a few things you can do at age 50 to catch up on your savings:
- Consider working a year or two longer. You don't have to work forever, but delaying retirement by just a year or two can make a big difference to your financial security in your golden years. Because you'll still be earning a salary, you won't have to start taking money from your retirement accounts, which can continue to compound. You may also be able to hold out for a larger Social Security benefit.
- Take advantage of catch-up contributions. Once you reach age 50, you can make additional catch-up contributions to many retirement accounts above the regular annual limits.
- Think about where you want to retire. Moving to a cheaper state in retirement or even retiring abroad could help you stretch your savings further.
You can't go back in time to make your twentysomething self start investing. But at age 50, you still have time to save for a comfortable retirement.
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