Savings by age: How much to save in your 20s, 30s, 40s and beyond

Jan. 24, 2024 ·6 min read

Short on time?

Get the highlights.

No matter what stage of life you're in, one thing will always remain the same: It's never too late — or too early — to save money.

If you're wondering, “How much should I have saved?" now is the time to flip your mindset. Think, “How much could I save?" Read on to see what your savings today can turn into down the road.

Average savings by age

Wondering how your savings stacks up against your peers? According to the Federal Reserve's Board 2022 Survey of Consumer Finances, the average American has $62,410 in savings. When you break that down by age group, it looks like this:

Table with average savings amounts by age groups. They are: Under 35: $20,540, 35 - 44: $41,540, 45-54: $71,130, 55-64: $72,520, 65-74: $100,250, 75+: 82,800

How much you should have saved at every age

Fast answer:

The amount of money you should save is unique to your lifestyle.
You can reach savings goals by creating specific target amounts and dates.

There isn't a one-size-fits-all number. It's important that your savings and goals connect to your lifestyle.

Being specific about savings goals will give you a framework for how much you need and how long it could take you to get there. Smart savings tools like buckets let you easily set goals, organize your savings and keep track of your priorities.

One way to hit your savings goal is to think of it as a portion of your income. The popular 50/30/20 budget framework dictates that 20 percent of your budget should go toward savings and debt repayment, while the 50 percent should go to needs and 30 percent to wants.

Here's what it looks like based on the average salaries of full-time and salaried workers across different age groups:

50/30/20 Monthly Budget

Alt text: A table of the 50/30/20 budget breakdown by age. The table is as follows: Age 20-24 with a median monthly salary of $2,924: 50% (Needs): $1,462, 30% (Wants): $877, 20% (Savings): $585. Age 25-34 with a median monthly salary of $4,160: 50% (Needs): $2,080, 30% (Wants): $1,248, 20% (Savings): $832. Age 35-44 with a median monthly salary of $5,052: 50% (Needs): $2,526, 30% (Wants): $1,516, 20% (Savings): $1,010. Age 45-54 with a median monthly salary of $5,088: 50% (Needs): $2,544, 30% (Wants): $1,526, 20% (Savings): $1,018. Age 55-64 with a median monthly salary of $4,888: 50% (Needs): $2,444, 30% (Wants): $1,466, 20% (Savings): $978. Age 65 and up with a median monthly salary of $4,512: 50% (Needs): $2,256, 30% (Wants): $1,354, 20% (Savings): $902.

*Each amount is rounded to the nearest dollar.

How much do you need to save in your 20s?

As you embark on your career, your 20s is the time to set strong savings habits. Using the 50/30/20 model, you could aim to save upward of $500 every month (or as much as you can). Saving where and when you can and being strategic with windfalls (such as a bonus), and dedicating additional income (like an annual raise) can help you work toward this goal.

How much do you need to save in your 30s?

Whether you're starting a family, buying a house or launching a business, savings continues to be essential in your 30s. Saving upward of $800 each month can sound like a daunting task, but consistency is key as you work toward any savings goal.

How much do you need to save in your 40s?

At this phase of your life, you might be thinking about a career change, figuring out college education costs for your kids or have your eye on an early retirement. Saving can help you achieve all these, so aim to save nearly $1,000 or more each month.

How much do you need to save in your 50s?

With retirement on the horizon, saving is more important than ever. Your mindset may be shifting into legacy planning or funding any potential healthcare needs. Putting aside about $1,000 monthly (or hitting that 20% goal) is a great way to ensure that your savings continue to build and fund your goals.

How much to save for retirement

Fast answer:

Rule of thumb: Have 1x your annual income saved by age 30, 3x by 40, and so on. See chart below.
The sooner you start saving for retirement, the longer you have to take advantage of the power of compound interest.
Aim to save 5% to 15% of your income for retirement — or start with a percentage that's manageable for your budget and increase by 1% each year until you reach 15%.

By looking at your retirement savings in 10-year increments and using age-based benchmarks, it's easier to plan financially and put actionable savings steps in place.

One popular age-based savings recommendation for retirement is that you should aim to save the total amount of annual salary by age 30 and increase your savings by your annual salary every five years:

Retirement savings goal by age

Table with retirement savings goals by age that states: By age 30, you should aim to save 1x your income, by age 40, 3x your income, by age 50, 5x your income, by age 60, 7x your income, by age 70, 9x your income, by age 80, 11x your income.

Keep in mind the above is a guide. The amount you should save for retirement will depend on:

Your income
Your planned retirement age
The kind of lifestyle you want to have in retirement

One way to make the most of your retirement savings is to start by investing 5% to 15% of your paychecks in a tax-advantaged retirement account like a Traditional or Roth IRA, or Individual Retirement Account, or a 401(k) until retirement.

The power of compounding interest

Consistent saving and your retirement savings rate can have a big impact on your total return. The following example is based on the U.S. median household annual income of $74,580 in 2022 (according to 2021 U.S. Census Bureau data) and assumes an average annual return of 6%.

Compounded savings based on the age you started:

Table of estimated compounded interested base on the age you started saving: If you started saving at age 25, with an annual retirement savings rate of 5%, by age 65 you'd have $575,714. With a savings rate of 10%, you'd have $1,153,286. With a savings rate of 15%, you'd have $1,730,857. If you started saving at age 35, with an annual retirement savings rate of 5%, by age 65 you'd have $294,096. With a savings rate of 10%, you'd have $589,141. With a savings rate of 15%, you'd have $884,187. If you started saving at age 45, with an annual retirement savings rate of 5%, by age 65 you'd have $136,842. With a savings rate of 10%, you'd have $274,126. With a savings rate of 15%, you'd have $411,410.

Dedicating 5% to 15% of your pre-tax income to retirement isn't always possible. You may be starting a new career, paying back student loans, or have other financial obligations and aren't able to save that much of your salary all at once. Start with a percentage you're comfortable with and increase your savings rate gradually by 1% each year until you reach the 15% mark.

If you're currently paying back loans or other debts, don't panic. Aim to save for retirement while paying off debt simultaneously, putting away what you can while sticking to your loan repayment schedule.

How much to save for emergencies

Fast answer:

Instead of using your age as the guide for savings for emergencies, start with your monthly essential expenses.
Ideally, an emergency savings account should hold three to six months' worth of essential expenses.
To keep your emergency savings accessible, consider a savings account rather than a Certificate of Deposit (CD).

Whether your dog swallows a chew toy and needs a trip to the vet or your car's transmission goes kaput, financial curveballs are unavoidable. And in those moments, an emergency fund can save the day.

Emergency savings goals

The ideal size of your emergency fund will likely fluctuate throughout your life based on your monthly expenses. Rule of thumb? Aim to have three to six months' worth of expenses set aside.

To figure out how much you should have saved for emergencies, simply multiply the amount of money you spend each month on expenses by either three or six months to get your target goal amount. We've mapped out what that would look like based on national averages in the table below.

Emergency fund savings by age

Table of emergency savings goals by age. If you're under 25 and your average monthly expenses are $3,863, 3 months of emergency savings would equal $11,589 and 6 months of emergency savings would equal $23, 178. If you're 25 - 34 and your average monthly expenses are $5,657, 3 months of emergency savings would equal $16,971 and 6 months of emergency savings would equal $33, 942. If you're 35-44 and your average monthly expenses are $7,171, 3 months of emergency savings would equal $21,513 and 6 months of emergency savings would equal $43,026. If you're 45-54 and your average monthly expenses are $7,590, 3 months of emergency savings would equal $22,770 and 6 months of emergency savings would equal $45,540. If you're 55-64 and your average monthly expenses are $6,507, 3 months of emergency savings would equal $19,521 and 6 months of emergency savings would equal $39,042. If you're 65 and up and your average monthly expenses are $4,818, 3 months of emergency savings would equal $14,454 and 6 months of emergency savings would equal $28,908.

We know this can feel impossible, especially if you're just starting out. And the national averages shown above may not resonate with your lifestyle. These numbers are just a benchmark, and you don't have to build your savings overnight. Focus on consistently putting away what you can afford.

Tip: Track your spending to see how much you actually need on a monthly basis. Then plug your numbers into our emergency savings account calculator.

Smart tools and strategies for savers of all ages

Fast answer:

Organizing tools like buckets let you easily set goals and track your progress.
Automating your savings with recurring transfers or direct deposits can help you reach your goals faster.
Use budgeting templates to track your spending each month.

Prioritizing goals and staying organized can keep you from stressing over not saving enough for all the things you want to do with your money. When you have a plan for saving for multiple goals, it reduces the chance that something slips through the cracks.

The buckets tool in the Ally Bank Savings Account helps you organize your savings into separate digital categories and set specific goals for each, eliminating the need to open multiple savings accounts to track your progress.

To make your savings go even smoother, consider putting it on autopilot with recurring transfers. This allows you to automatically add money into your respective savings accounts, or by using the Surprise Savings booster in the Ally Bank Savings Account, you can ease some of the stress of reaching your goals.

Finally, remember that when you're saving money, every little bit you don't spend counts. Uncover savings opportunities by finding the budgeting style that works for you and using our easy-to-use budget templates.

You’ve got this

When mapping out your financial future, age can act as a milestone to guide your savings. But you're never too young or too old to save for the goals that matter most to you.

Explore more

DebtBudgetHome