How much should you have in savings at each age?

It’s exciting to have money. But as the saying goes — with great power, comes great responsibility. And in a capitalistic society, money is extremely powerful as it’s how we pay for the goods and services required for everyday life.

Managing it responsibly, however, is the key to make it last and that starts with your savings.

Savings helps enable you and your family to enjoy the financial freedoms associated with money and avoid many of the pains that come along with debt. While it may be daunting to think about the future, it’s imperative if you want to set yourself up for financial success.

One question that people find themselves struggling with is how much they should be saving. While it will certainly depend on your situation, here’s a look at what experts suggest you save based on your age, income and monthly expenditure.

Age Retirement saving goal Emergency saving goal
30 $74,082 $11,097 to $22,194
40 $289,743 $13,851 to $27,702
50 $656,196 $13,980 to $27,960
60 $706,736 $12,705 to $25,410

Think of these savings targets as less of an exact number and more of a general guide. It will show you how your personal savings and retirement account balances stack up to the averages. Below you’ll find a full savings guide that estimates how much you should have in savings and your retirement accounts right now, and at different age milestones over the course of your life.

How much do I need in an emergency fund?

Let’s start with your emergency fund. Standard financial advice says you should aim for three to six months’ worth of essential expenses, kept in some combination of high-yield savings accounts and shorter-term CDs.

“For a working individual earning income, the goal should be to have just enough cash to provide an emergency buffer to protect against any pitfalls that could hinder financial well-being,” says Sergio Garcia, a certified financial planner at Brennan Financial Services.

Broadly speaking, there are six key costs to focus on: housing, transportation, food, health care/insurance, utilities and debt, with the first two typically carrying the largest monthly payment.

How much you need to save to survive an adverse life event comes down to you and your family’s financial situation.

A two-income family, for example, may only need to cover three months’ worth of expenses. But if there is only one income, or wages are largely commission-based, “the amount held in cash should be closer to six months of expenses, or even longer,” Garcia says.

An easy formula for figuring out what your suggested emergency savings range may look like is by multiplying your monthly expenses by three and then by six.

You can also get a sense of what your savings’ burden looks like by age by looking at data from the Bureau of Labor Statistics (BLS) and Federal Reserve.

How much do I need to save in my 20s?

Households led by someone between the ages of 25 and 34 earn an average of $74,082 a year, according to the BLS’s 2018 Consumer Expenditure Survey. If you take conventional wisdom, this household, which has one child, on average, should have about that much (one times their salary) socked away in retirement accounts.

Check out our retirement calculator to get an in-depth look into your specific retirement needs.

As for your emergency fund, these households spend a monthly average of about $1,635 on housing, $859 on transportation, $612 on food, $256 on health care and $281 on utilities. Toss in an estimated $56 per month on debt or loan payments and that monthly essential spending costs $3,699.

Multiply that by three and by six, and you’ve got your emergency fund.

If you are just out of school, saving anything may seem like a challenge. But the important thing is to start saving, and starting small, such as putting aside $1,000 to $1,500 in an emergency fund, is a good place to start.

Consider taking on a side gig or second job to generate a little extra income for your savings.

As you gain work experience and move onto a career track, you can amp up your contributions to your emergency fund and to your retirement account as well.

Here’s what you should plan on saving by the time you reach age 30:

Retirement savings goal: $74,082

Emergency savings goal: $11,097 to $22,194

How much do I need to save in my 30s?

Those aged 35 to 44 earn an average income of $96,581, according to BLS data. Conventional wisdom states this couple should have three times that amount saved for retirement.

Their estimated average monthly spending consists of $1,978 on housing, $987 on transportation, $818 on food, $360 on health care, $374 on utilities and another $100 on debt. That comes to a total of $4,617 a month.

Retirement savings goal: $289,743

Emergency savings goal: $13,851 to $27,702

How much do I need to save in my 40s?

This is the time you hit your peak earnings. It’s also when you’ll spend the most money in your life.

Those aged 45 to 54 earn an average yearly income of $109,366. Experts tell these stressed-out folks they need six times earnings in their retirement accounts.

That might be difficult due to their increased spending. Housing costs actually go down slightly to $1,964 a month, $960 on transportation, $794 on food, $428 on health care, $402 on utilities and $112 on debt. That totals $4,660 a month.

Retirement savings goal: $656,196

Emergency savings goal: $13,980 to $27,960

How much do I need to save in my 50s?

Time to wind down. You’ve probably moved on from the most stressful period of your career, either voluntarily or not, and now you’re preparing for the last third of your life and retirement. That’s why earnings and spending start to fall.

Those aged 55 to 64 earn an average yearly income of $88,342. You’ll want to have saved at least eight times that for retirement.

Thankfully you may need less in your savings account during this time. You spend $1,742 on housing, $870 on transportation, $669 on food, $479 on health care, $375 on utilities and $100 on debt. That’s a monthly total of $4,235.

Retirement savings goal: $706,736

Emergency savings goal: $12,705 to $25,410

How much do I need to save by age 60?

By the time you’re in your mid-60s, there’s a good chance that you’re settling into retirement and enjoying the downtime.

For some, this may mean spending more time with your grandkids while other retirees may finally take that big vacation they’ve been dreaming of. Either way, both lifestyles still require money.

At this state of life, those aged 65 to 74 earn an average yearly income of $51,624. You’ll want to have saved at least eight times that for retirement.

You spend $1,501 on housing, $734 on transportation, $609 on food, $559 on health care, $338 on utilities and $100 on debt. That’s a monthly total of $3,841.

Retirement savings goal: $412,992

Emergency savings goal: $11,523 to $23,046

Other common savings goals

Of course, there is more to life than simply saving up for emergencies or socking away every spare penny for your retirement.

Important as that can be, you’ll also want to save so you can take advantage of the good things life throws your way, whether it’s getting married, buying a house or simply going on a Caribbean vacation with your family.

Whatever it is, you’ll want to have some money saved up, especially if you want to avoid getting saddled with thousands of dollars in expensive, credit-card debt.

You may want to open separate savings accounts for these additional expenses in order to avoid diluting your emergency fund. If you are looking to save a couple years out, say for a new car or down payment on a home, you might consider putting money into a money market fund or a CD, which could earn a bit more interest than your typical savings account.

However, when you start saving for college for a child, the costs graduate into an entirely new level of expense. For the 2019-2020 school year, the average tuition and fees at private colleges averaging $41,426 and public colleges averaged $11,260 for in-state students, according to U.S. News & World Report.

For parents, that means having to save a lot of money. (You can crunch the numbers using Bankrate’s college cost calculator.)

For college, you may want to look at a 529 savings plan, which is offered by most states. These college savings plans work like an IRA or 401(k), with contributions invested in mutual funds and other financial assets. Money invested in 529s are after-tax dollars, but your earnings grow tax free.

It’s never too early to start saving

Your 20s are a great time to start saving.

It’s okay to start small, the important part is that you’re thinking about your financial future. As you progress in your career and become more financially stable, you can increase your contributions.

Paying off high-interest student debt and automating your savings so you squirrel away a piece of each paycheck are good places to start.

What you can do?

An easy way to increase your savings is by putting it into a high-yield savings account or money market account. Both of these options offer a boost in earnings with minimal effort, but they are also highly liquid meaning you can easily access them without a penalty in case an emergency arises. 

Remember, your retirement savings has some advantages. The contributions you make in your 401(k), for example, aren’t taxed when you invest the money, and you might also get a matching contribution from your employer. The money itself takes advantage of compounding interest. If you save 10 percent to 15 percent of each paycheck, including any match, you’ll be on track.

Your emergency savings, meanwhile, is funded with after-tax money that earns barely any return at all.

To make sure your emergency fund is properly funded when you need it, set up automatic contributions to your savings account — you probably won’t even notice the money is missing every two weeks.

If you get lucky with a salary raise or bonus, take it straight to the bank and try to live beneath your last salary. And when a debt is paid off, or an ongoing expense evaporates, put that money toward your emergency fund.

Constant vigilance is the only antidote to disaster.

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