One of the most common investment vehicles in the U.S. is a 401(k) plan, an employer-sponsored plan to help employees save for retirement. According to the U.S. Department of Labor, there are 560,241 401(k)-type plans in the U.S. with nearly 80 million active participants.
If your employer offers a 401(k) plan and you’re participating, you might be wondering how much you should be putting aside for your golden years. A rule of thumb is that you should add one year of your salary to your savings every five years. Using this guideline, along with a few benchmarks for your savings, can help ensure you’re on track to a secure retirement. So, here are some savings milestones you may want to aim for as you reach each decade of your life.
SAVINGS BY AGE 30
When you reach age 30, you’ll want to aim to have at least one year’s salary in your 401(k). So, if you’re making $60,000 per year, you’ll want to have $60,000 in your 401(k) account.
SAVINGS BY AGE 40
As you age, hopefully, you’ll receive raises and promotions to increase your salary. Therefore, when you reach age 40, you’ll want to aim to have at least three years of your salary saved for retirement. If you now make $70,000 per year, you’ll want to have roughly $210,000 set aside in your 401(k).
SAVINGS BY AGE 50
Age 50 is a great check-in point to review your savings and ensure you’re on track for your retirement savings goals. It’s recommended to have at least five years’ worth of your salary in savings. If you now make $90,000, you should aim to have $450,000 in your 401(k) account.
NOT ON TRACK?
Ideally, you would want to start saving as soon as possible. But, that’s not always the case for everyone. Even if you haven’t made saving for retirement a priority, it’s never too late to start. Starting now is better than not starting at all. So, if you need a little help building up your 401(k) account, here are a few suggestions to increase your savings.
Many employees look forward to their years of retirement. Working hard now to ensure you have plenty of savings to live off of in your golden years will make your retirement more comfortable. So, even if you’re a little behind, there is still time. Start now and begin making a plan to save for your future.
This content was originally published here.