Savings by age: How much to save in your 20s, 30s, 40s and beyond
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.
Read on to see what your savings today can turn into down the road.
Average savings by age
The average American has $62,410 in savings, according to the Federal Reserve Board’s 2022 Survey of Consumer Finances, the latest available data. When you break that down by age group, it looks like this:
Age group | Average savings |
|---|---|
Under 35 | $20,540 |
35-44 | $41,540 |
45-54 | $71,130 |
55-64 | $72,520 |
65-74 | $100,250 |
75+ | $82,800 |
Calculate how long it will take to hit your savings goals with Ally Bank’s savings calculator:
How much you should have saved at every age
There isn't a one-size-fits-all number. It's important that your savings and goals connect to your lifestyle. Link
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.
Read more: Give your savings a boost with Ally Bank Savings Buckets.
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 after taxes, 20% of your income should go toward savings and debt repayment, while 50% should go to needs and 30% 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
Age group | Median Monthly Salary | 50% (Needs) | 30% (Wants) | 20% (Savings) |
|---|---|---|---|---|
20 –24 | $3,136 | $1,568 | $941 | $627 |
25-34 | $4,544 | $2,272 | $1,363 | $909 |
35-44 | $5,424 | $2,712 | $1,627 | $1,085 |
45-54 | $5,344 | $2,672 | $1,603 | $1,069 |
55 – 64 | $5,072 | $2,536 | $1,522 | $1,014 |
65 and up | $4,636 | $2,318 | $1,390 | $927 |
*Each amount is rounded to the nearest dollar.
How much do you need to save in your 20s?
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, saving 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 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. Learn more about savings by age 40.
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
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.
Retirement savings goal by age
By age | You should aim to save… |
|---|---|
30 | 1x your income |
40 | 3x your income |
50 | 5x your income |
60 | 7x 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 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 by age 65 based on the age you started:
Starting age | 5% annual retirement savings rate | 10% annual retirement savings rate | 15% annual retirement savings rate |
|---|---|---|---|
25 | $575,714 | $1,153,286 | $1,730,857 |
35 | $294,096 | $589,141 | $884,187 |
45 | $136,842 | $274,126 | $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, 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
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.
It's all about your monthly spending
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, 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
Age group | Average monthly expenses | 3 Months of emergency savings | 6 Months of emergency savings |
|---|---|---|---|
Under 25 | $4,130 | $12,390 | $24,780 |
25-34 | $5,989 | $17,967 | $35,934 |
35-44 | $7,578 | $22,734 | $45,468 |
45-54 | $8,110 | $24,330 | $48,660 |
55-64 | $6,948 | $20,844 | $41,688 |
65 and up | $5,007 | $15,021 | $30,042 |
Tip: Track your spending to see how much you actually need on a monthly basis.
Where to keep your emergency fund
Savings or money market accounts offer accessibility and safety for your emergency funds. As an Ally Bank customer, your deposits are FDIC-insured up to the maximum allowed by law.
Smart tools and strategies for savers of all ages
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 saving 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 free 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.
