At 28, I had exactly $3,400 in my retirement account. I remember the number because I checked it after reading one of those 'you should have 1x your salary saved by 30' articles and nearly had a panic attack. If you're reading this and feeling behind, first: take a breath. You're not alone. The median 401(k) balance for Americans in their 30s is about $22,000, which is well below what most guidelines recommend. Second: it's not too late. But you do need a plan, and you need to start. Today.
The commonly cited benchmarks go like this: 1x your salary saved by 30, 3x by 40, 6x by 50, 8x by 60, and 10x by 67 for a comfortable retirement. So if you earn $60,000 at age 30, you'd ideally have $60,000 saved. At 40, $180,000. These numbers come from Fidelity's research, and they assume you want to replace about 80% of your pre-retirement income. Are they perfect? No. Is everyone's situation different? Obviously. But they're a useful yardstick.
If you're in your 20s and just starting out, the single best thing you can do is enroll in your employer's 401(k) and contribute enough to get the full company match. If your employer matches 50% up to 6% of your salary, contributing 6% gets you 3% free money. On a $50,000 salary, that's $1,500 per year your employer is handing you for doing nothing except signing up. Not contributing enough to get the full match is literally leaving money on the table. I still cringe thinking about the two years at my first job where I didn't enroll at all.
In your 30s, crank it up. You're probably earning more now, and the power of compound growth is enormous when you have 30+ years until retirement. Aim for 15% of your income (including employer match). If that feels impossible right now, start at whatever you can and increase by 1% every year. Most people don't notice a 1% increase when it happens gradually. A 30-year-old saving $500/month with a 7% average return will have about $566,000 by 60. Waiting until 40 to start? Same contribution rate gets you about $260,000. Starting early is the closest thing to a cheat code in personal finance.
40s and 50s: this is where catch-up mode becomes real. If you're behind on benchmarks, you're not doomed, but you need to get aggressive. Max out your 401(k) -- the 2025 limit is $23,500, plus a $7,500 catch-up contribution if you're 50 or older. That's $31,000/year in tax-advantaged savings. Also max out a Roth IRA if you're eligible ($7,000/year, $8,000 if 50+). If your income exceeds Roth limits, look into a 'backdoor Roth' strategy. Consider working with a fee-only financial advisor -- the cost is usually worth it when the stakes are this high.
Don't ignore the Roth vs. Traditional question. Traditional 401(k) and IRA contributions reduce your taxable income now, but you'll pay taxes on withdrawals in retirement. Roth contributions are made with after-tax dollars, but grow and are withdrawn tax-free. If you think your tax rate will be higher in retirement (common for younger workers who expect salary growth), Roth makes more sense. If you're in your peak earning years and expect a lower tax rate in retirement, Traditional wins. Many advisors recommend having both for tax diversification.
Social Security will likely cover 30-40% of your pre-retirement income, but I wouldn't build your entire retirement plan around it. The trust fund faces a funding shortfall around 2033, and while benefits probably won't disappear entirely, some reduction is possible. Think of Social Security as a floor, not a ceiling. Your personal savings are what determine whether retirement means 'comfortable' or 'stressed.'
The most important retirement advice I can give is this: start now, contribute consistently, and don't touch it. I know someone who cashed out a $45,000 401(k) at age 35 to buy a boat. After taxes and the 10% early withdrawal penalty, he netted about $28,000. That $45,000, left to grow for 30 more years at 7%, would have been worth approximately $340,000 at retirement. He has a very expensive boat story. Don't be that person. Set it, automate it, forget about it, and let compound growth do the heavy lifting.
