Age-based financial goals to promote long-term security
The importance of saving for retirement is emphasized from the moment young adults enter the professional arena. Whether it’s parents urging their grown children to save or financial firms advertising their retirement planning services or employers sponsoring retirement investment vehicles, professionals need not look far to be reminded of the significance of saving for the day when they call it a career.
Despite the ubiquity of the message emphasizing the importance of saving for retirement, millions of people are behind in their retirement savings. A 2023 survey by the Healthcare of Ontario Pension Plan found that 44 percent of the 2,000 Canadian employees surveyed have not set aside any money for retirement in the past year, while 32 percent acknowledged they had not set aside any money for retirement. The situation is similar in the United States, where a 2023 CNBC Your Money survey found that 56 percent of Americans feel they are not on track to retire comfortably.
Such figures can serve as a lesson for all professionals, but especially young adults who recently entered or are about to enter the professional arena. Each individual is different, and those who aspire to retire early will need to save more at a younger age than those who plan to retire at age 70 or later. In an effort to help individuals ensure they save enough to enjoy their golden years, the financial experts at Fidelity® have designed an age-based system that can serve as a guideline for professionals who want to stay on track as they save for retirement. These figures are based on retiring at age 67 and are intended to ensure such individuals can maintain their preretirement lifestyles. Individuals who want to retire before or after that age are urged to work with a financial advisor to meet their goals.
· Age 30: Fidelity® recommends individuals have at least 1x their salary saved by age 30. · Age 35: This approach calls for individuals to have 2x their salary saved by age 35.
· Age 40: If retiring at 67 is the goal, having 3x your salary saved by age 40 can help make that a reality.
· Age 45: 4x your salary should be saved by age 45 to retire comfortably at age 67.
· Age 50: Fidelity® recommends individuals have 6x their salary saved by age 50.
· Age 55: 7x your salary is the suggested savings benchmark to reach by age 55.
· Age 60: Individuals who aspire to retire at 67 are urged to save 8x their salary by the time they reach age 60.
· Age 67: When the day comes to retire at 67, Fidelity recommends individuals have 10x their salary saved.
These figures are just a benchmark and are not intended to take the place of professional financial advice. Though these goals can serve as motivation to save, individuals should know that savings goals can exceed these recommendations as well.