What Is a Good Savings Rate by Age in the United States?

Here’s a question that keeps many Americans up at night: Am I saving enough for my age? Whether you’re a recent college graduate just starting your first real job or someone in their fifties wondering if retirement is actually within reach, the uncertainty around what constitutes “enough” can be genuinely stressful. The truth is, there’s no magic number that works for everyone, but there are definitely benchmarks that can help you gauge whether you’re on track, falling behind, or doing better than you might think.

What makes this topic particularly tricky is that your savings rate needs to evolve as you move through different life stages. The percentage that’s appropriate for a 25-year-old is very different from what a 45-year-old should be targeting. Your income changes, your expenses shift, and your time horizon to retirement gets shorter with each passing year. Understanding these age-based benchmarks isn’t about judging yourself against some impossible standard—it’s about having a realistic roadmap that helps you make informed decisions today that your future self will thank you for.

The Reality of Savings Rates Across America

Before we dive into what you should be saving, let’s talk about what Americans actually save. According to various financial studies, the average personal savings rate in the United States typically hovers between 3% and 8% of disposable income. Yes, you read that right—most Americans are saving less than 10% of what they bring home. This isn’t meant to make you feel better if you’re struggling to save; it’s meant to highlight that we collectively have a savings problem in this country.

The median retirement account balance for Americans tells an even more sobering story. Many people in their sixties have less than $200,000 saved for retirement, which sounds like a lot until you realize that needs to last potentially 20 or 30 years. This disconnect between what people are saving and what they’ll actually need is why understanding age-appropriate savings rates is so crucial.

But here’s some genuinely good news: knowing where you stand relative to where you should be is the first step toward course correction. Unlike some financial metrics that depend heavily on factors outside your control, your savings rate is something you can actively influence and improve at any age.

Savings Rate Targets for Your Twenties (Ages 20-29)

Your twenties are financially paradoxical. You’re probably earning the least you’ll ever earn in your career, you might be dealing with student loans, and you’re establishing your independent life—all of which makes saving feel nearly impossible. Yet this is also the decade when time is most powerfully on your side, and even small amounts saved now can grow dramatically over 40+ years.

A realistic savings rate target for your twenties is 10-15% of your gross income. Notice I said “realistic” rather than “ideal.” If you can hit 15%, you’re doing exceptionally well for this age group. If you’re managing 10%, you’re still building a solid foundation. And if you’re somewhere between 5-10%, you’re at least moving in the right direction—just commit to increasing it as your income grows.

Let’s be practical about what this looks like. If you’re earning $45,000 per year in your mid-twenties, a 12% savings rate means setting aside $5,400 annually, or $450 per month. That might sound daunting, but remember this includes any employer 401(k) match you receive. If your employer matches 3% and you contribute 9%, you’ve hit your 12% target.

The strategy for your twenties should focus on habit formation over absolute dollars. You’re training yourself to pay yourself first, to live below your means, and to view saving as non-negotiable rather than something you do with “leftover” money. These behavioral patterns you establish now will serve you for decades.

One critical mistake to avoid in your twenties is completely sacrificing retirement savings to pay off student loans faster. Yes, you should make your minimum payments and chip away at high-interest debt. But completely pausing retirement contributions means missing out on years of compound growth and, often, free employer matching money. A balanced approach—perhaps a 10% savings rate while making steady debt payments—typically serves you better in the long run.

Building Momentum in Your Thirties (Ages 30-39)

Your thirties are typically when your income starts accelerating, but paradoxically, it’s also when your expenses often explode. Weddings, houses, children—these major life events cluster in this decade for many people. Despite these financial pressures, your thirties are crucial for wealth building because you still have 25-35 years until retirement, giving compound interest plenty of time to work its magic.

The target savings rate for your thirties should be 15-20% of your gross income. This is a meaningful step up from your twenties, reflecting both your (hopefully) increased earnings and the growing urgency of building retirement assets. If you started saving in your twenties, this increase might feel natural. If you’re starting from scratch in your thirties, hitting 15% immediately might require some aggressive budgeting.

Here’s a real-world scenario: You’re 35, earning $75,000 per year, and targeting an 18% savings rate. That’s $13,500 annually or $1,125 monthly. You might structure this as 6% to your 401(k), a 3% employer match, $500 monthly to a Roth IRA ($6,000 annually), and the remaining $1,500 annually going to additional savings or investments.

Balancing Multiple Financial Priorities

The challenge of your thirties is juggling competing financial priorities. You might be trying to save for retirement while also building a down payment fund, contributing to a 529 college savings plan for your kids, and maintaining an emergency fund. This is where that 15-20% savings rate becomes crucial—it represents your commitment to long-term wealth building even while handling shorter-term needs.

A useful framework is to ensure your retirement savings rate (specifically for retirement) stays at least at 10-15%, then anything above that can be allocated toward other savings goals. This ensures you’re not completely sacrificing your retirement for other financial objectives, no matter how important they feel in the moment.

The Catch-Up Opportunity

If you didn’t save much in your twenties, your thirties are your catch-up decade. The math is straightforward: starting at age 30 with nothing saved, you’d need to save approximately 15-18% annually to potentially retire comfortably at 65. Starting at age 35 with nothing increases that requirement to roughly 20-25%. The later you start, the higher the percentage needs to be.

This isn’t meant to induce panic if you’re behind—it’s meant to show you exactly what recovery looks like. If you’re 33 and just now starting to save seriously, you need to be more aggressive than someone who started at 23, but you can still reach your goals with a clear plan.

Hitting Your Stride in Your Forties (Ages 40-49)

Your forties should be your peak earning and saving years. For many people, this is when career advancement plateaus into high income, major expenses like daycare end, and the urgency of retirement looms large enough to prompt action but isn’t so close that you feel paralyzed.

The target savings rate for your forties is 20-25% of gross income, with a strong argument for pushing toward the higher end if possible. This is also the decade where you need to get serious about catching up if you’re behind. The IRS recognizes this with catch-up contributions: starting at age 50, you can contribute an extra $7,500 to your 401(k) beyond the standard limit.

Let’s look at what this means in practice. At age 45, earning $95,000 annually, a 22% savings rate equals $20,900 per year or roughly $1,742 monthly. This might look like maxing out your 401(k) contribution (which for 2024 is $23,000 if you’re 50+), receiving an employer match, and contributing to additional savings vehicles.

The psychological shift that needs to happen in your forties is treating savings like your most important bill. It’s not about finding “extra” money to save—it’s about building your entire budget around saving first, then living on what remains. This mindset shift is what separates people who retire comfortably from those who work well into their seventies not by choice.

The Critical Decade of Your Fifties (Ages 50-59)

Your fifties are when retirement transforms from an abstract concept to a concrete reality you can almost touch. This decade requires maximum savings intensity because you’re in the final stretch. The good news is that for many people, this is also when saving becomes easier—the kids are financially independent, the mortgage might be paid off or close to it, and income is at its peak.

The target savings rate for your fifties should be 25-30% or more of gross income. Yes, that’s an aggressive target, but it reflects two realities: you’re running out of time for compound interest to work its magic, and you should know fairly precisely how much you need by now. If you’re behind on your retirement goals, this percentage might need to climb even higher—35% or 40% isn’t unreasonable if you’re playing serious catch-up.

At age 55 earning $110,000 annually with a 28% savings rate, you’d be saving $30,800 per year. Taking full advantage of catch-up contributions, you could max out a 401(k) (contributing $30,500 in 2024), plus receive employer matching, and potentially contribute to a Roth IRA depending on income limits.

The Catch-Up Math

If you enter your fifties with insufficient retirement savings, the math becomes brutally simple. Let’s say you’re 50 with $100,000 saved but need $800,000 by age 65. Even with a 7% average annual return, you’d need to save approximately $32,000 per year to hit that target. That might require a 30-40% savings rate depending on your income, which explains why those target percentages jump so dramatically in your fifties.

The alternative is accepting a later retirement age or a reduced lifestyle in retirement. There’s no judgment in either choice, but making that choice consciously and with full information is very different from simply hoping things work out.

Approaching Retirement in Your Sixties and Beyond

Once you hit your sixties, your savings rate calculation changes fundamentally. Some people continue working and saving aggressively, while others begin transitioning to retirement and spending down their assets. The “good” savings rate in your sixties depends entirely on your individual circumstances and retirement timeline.

If you’re still working full-time in your early sixties, maintaining a 25-30% savings rate makes sense—you’re in the final push. If you’re already retired or semi-retired, you’re moving from accumulation to distribution mode, where your “savings rate” might actually be negative as you draw down retirement accounts.

The key metric shifts from how much you’re saving to whether you have enough saved. Financial advisors often use the “25x rule”: you need roughly 25 times your desired annual retirement spending saved to retire safely. If you want $50,000 annually in retirement, you’d target $1.25 million in savings. Your sixties are when you stress-test these numbers against reality and make final adjustments to either your savings or your retirement expectations.

Adjusting Targets Based on Your Personal Circumstances

All these age-based targets are guidelines, not rigid rules. Your personal “good” savings rate depends on numerous factors that might push you above or below these benchmarks.

If you started saving very early or received an inheritance, you might be able to save less than these targets and still be on track. Conversely, if you plan to retire early, have expensive health conditions, or want a more luxurious retirement lifestyle, you’ll need higher savings rates across all age groups.

Geographic location matters too. Someone planning to retire in rural Mississippi has very different needs than someone retiring in San Francisco. Tax situations, pension benefits, expected Social Security income—all these factors adjust what’s “good” for you individually.

The most important question isn’t whether you hit some arbitrary percentage. It’s whether your current savings trajectory gets you to where you actually need to be. Run the projections, use retirement calculators, and if possible, consult with a financial advisor who can personalize recommendations to your situation.

What to Do If You’re Behind

Here’s what I hope you take away from all these numbers: if you’re behind, it’s not hopeless. The best time to start saving was twenty years ago. The second best time is today. Every percentage point you can add to your savings rate, starting right now, changes your trajectory.

If you’re 40 and have saved almost nothing, yes, you need to get aggressive—probably aiming for 30-35% if you can possibly manage it. That might mean significant lifestyle adjustments, but the alternative is working until you’re 75 or living on Social Security alone, which replaces only about 40% of average earnings.

Small changes compound dramatically. Increasing your 401(k) contribution by just 1% every six months barely feels noticeable in your take-home pay, but over a decade it can add tens of thousands to your retirement savings. Automate increases so they happen without requiring constant willpower and decision-making.

Remember, too, that your savings rate is just one tool in your retirement toolkit. Working a few extra years, relocating to a lower cost area, or planning to downsize your home all adjust how much you need to save. Financial planning isn’t just about hitting target numbers—it’s about creating a plan that actually works for your life, your values, and your constraints. The savings rates outlined here give you a starting point, but your personal “good” savings rate is ultimately the one that puts you on track to meet your goals, whatever they may be.