Have you Saved Enough?

September 03, 2019
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A long standing assumption was that a retirement nest egg of $1,000,000 would cover retirement needs. However, that has been challenged in recent years by arguments that different people have different resources and different spending patterns. Someone who makes $200,000, lives on $100,000 and has a pension likely needs to save less than someone who makes $200,000, lives on $200,000 and has no pension.

While the formula below1 does not account for outside income sources in retirement such as pension or rental income, it does give you a broad gauge for whether you are on track for retirement compared to others.

Investors Age                 Suggested Amount to Save

Age 30:              1/2 salary

Age 35:              1 to 1.5X salary

Age 40:              2 to 2.5X salary

Age 45:              2.5 to 4X salary

Age 50:              3.5 to 6X salary

Age 55:              5 to 8.5X salary

Age 60:              6.5 to 11X salary

Age 65:              8 to 14X salary

Key Assumptions: Household income grows at 5% until age 45 and 3% (the assumed inflation rate) thereafter. Investment returns before retirement are 7% before taxes, and savings grow tax-deferred. The person retires at age 65 and begins withdrawing 4% of assets (a rate intended to support steady inflation-adjusted spending over a 30-year retirement). Savings benchmark ranges are based on individuals or couples with current household income between $75,000 and $250,000. Target multiples at retirement reflect estimated spending needs in retirement (including a 5% reduction from preretirement levels), taxes and Social Security benefits based on the ssa.gov Quick Calculator. (Young, 2019)


  1. Young, Roger A. “Age Targets: How Much Should You Have Saved for Retirement By Now?” kiplinger.com, Kiplingers Personal Finance, 27 Feb. 2019, www.kiplinger.com/article/retirement/T047-C032-S014-age-targets-how-much-should-you-have-saved-by-now.html.

Disclaimer: Alex Voorhees and Reston Wealth Management do not provide legal, accounting or tax advice. This information is not intended to be a substitute for specific individualized investment, tax or legal advice. We suggest that you discuss your specific situation with a qualified investment, tax or legal advisor. The opinions voiced in this article are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) or strategies may be appropriate for you, consult your financial advisor prior to investing. No strategy assures success or protects against loss. You should consider the investment objectives, risks, charges and expenses of any investment carefully before investing.