How Much Money Should You Have Saved by 60?

Senior couple hiking together

At 60, you might be ready to retire—or at least ready to get ready. Retirement once seemed far off, but now it's a real possibility. Your kids may be done with schooling and are supporting themselves. You may feel ready to pare down your lifestyle and career. Maybe your friends are retiring: In a 2019 Federal Reserve Board of Governors survey, 51% of retirees said they retired before they reached age 62.

What does it take to pull the plug on work and transition to a life of leisure? Now may be the time to find out. Take a moment to take stock of how much you'll have saved by 60, how much you'll need to retire and how you get from here to there.

How Much You Should Save by Age 60

Just how much should you have saved by 60? The answer is completely personal—and a source of some anxiety for many non-retirees in their 60s. In a 2020 Federal Reserve Board of Governors survey released in May 2021, 87% of non-retirees in their 60s had at least some retirement savings, but only 48% felt as though those savings were on track.

According to guidelines created by investment firm Fidelity, at age 60 you should have saved roughly eight times your annual salary if you plan to retire at age 67, the age at which people born after 1960 can collect full Social Security benefits. To better understand how this estimate plays out in real dollars, let's consider a hypothetical example.

To keep the math simple, let's say your current salary is $100,000 a year. According to Fidelity guidelines, you should have $800,000 saved up now and $1 million by 67. How do you get from $800,000 to $1 million?

  • If you set aside 15% of your income, you'll save $105,000 in seven years (not including any interest earned) for a total of $905,000. A good start, but this doesn't get you to your goal.
  • Invest your money with an average return of 4% and no additional contributions, and you'll have just over $1.05 million at 67.
  • Contribute 15% and earn a conservative 1.5% annually: You'll reach $999,000+ in seven years.

Say you're 60 today and you retire at 67. Using the figures in our example, your monthly Social Security benefits would be $2,544. (Estimate your own Social Security benefits on the Social Security site.) Plan to withdraw roughly 4% to 5% of your starting balance ($1 million) each year for additional monthly income of about $4,000. Stick to these numbers and, by Fidelity's calculation, you should stay on track financially through age 93.

Factors to Consider When Saving for Retirement at 60

Estimating your retirement income only tells one part of the story; several additional factors come into play. Before you celebrate—or despair—over your projected funds, think through these questions:

  • How much income do you need to support your lifestyle? Consult your current budget, but also look ahead at factors that may reduce your needs when you retire. Will your mortgage be paid off? Will switching to Medicare save you money? Will you spend less on clothing, cars, dry cleaning or dining out? Will you spend more on travel?
  • What sources of income will you have? In addition to retirement savings and Social Security, do you have separate savings, passive income or additional pensions you can tap?
  • How long can you work? Can you continue doing your current job for as long as you want? Is it possible your job will end? Do you feel physically and emotionally capable of working for another five or 10 years?
  • What will you do if you run out of money? You don't want to resort to a backup plan, but you should have one just in case.

These issues can be complicated. If you need an expert eye, consider working with a financial advisor to help you figure out exactly what your options might be. At age 60, you don't have decades to save and invest for your future retirement, but you do have time to gather the facts, make some plans and save, save, save.

How to Save More Money for Retirement

Regardless of where you are in your retirement savings journey, you may want to take this opportunity to save a little more. How can you save more for retirement during the home stretch of your working life?

  • Max out your 401(k) contribution, especially if your employer matches it.
  • Contribute to a separate IRA or Roth IRA. Your contribution to a traditional IRA may be tax-deductible. Roth IRA contributions are not tax-deductible, but your future retirement withdrawals are tax-free.
  • Check up on your investments. Can your money work harder for you? Even a small tick-up in interest, dividends or investment value adds up over the years.
  • Convert to a retirement lifestyle now. An empty nest, changing work requirements, a simpler life—some elements of a less expensive retired lifestyle may be available to you now. Are you thinking of downsizing your home? If so, you might see multiple benefits:
    • Your home sale could generate a net profit that you can add to your retirement savings now.
    • You could reduce or eliminate your mortgage payment, which would increase your current monthly income and ability to contribute to retirement.
    • You could get a jump on enjoying a less work-intensive lifestyle by moving to a home with no yard work, for example.
  • Find an encore career. Does converting to part-time work or consulting make long-term employment seem more appealing? Is there another type of work you might enjoy, even if it paid less? A new career could bridge the gap between your current job and no job at all.
  • Reimagine your retirement. Your post-career life doesn't have to be expensive or income-free. Now's a great time to look for opportunities to make your post-retirement life sustainable. Rent out your house and live on a sailboat. Teach English abroad. Take up house or dog sitting. So many life pressures are about to shift: Figure out what you want now.

Save Enough to Support Your Best Choices

As you look forward to retirement, the money you've spent a lifetime saving will fund your vision for what the coming years bring. You still have time to save more, adjust your plans and cultivate new opportunities. As you go, don't overlook the value of good credit. Retirement isn't a great time to spend wildly or take on excess debt. But having access to the flexibility of credit cards, low-interest home and auto loans, good scores for rental applications—the list goes on—will expand your choices as you age. Check your credit report and score or sign up for free credit monitoring that will help you track your credit into the future.

At 60, you have many choices ahead. With good stewardship and planning, they can be some of the best choices of your life.

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