How Much Money Should You Have Saved for Retirement by 67?

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Experts say it's ideal to have at least 10 times your current salary saved by age 67. If you achieve this goal, you'll likely be able to sustain your pre-retirement lifestyle. That means you may not have to scale back on vacations, the size of your home or other expenses when your working years are over.

Retirement is one of the central financial considerations for 67-year-olds. But it may also coincide with other priorities, like paying for health care costs and supporting adult children as they buy homes or get married. Here's how to set a retirement savings goal that will offer freedom and flexibility to spend on the things and experiences most important to you.

How Much You Should Save by Age 67

Financial planning firm Fidelity has created several retirement guidelines that can help savers determine whether they're on track for a financially fit retirement. According to Fidelity, by age 67 you should have retirement savings worth 10 times your current salary. That assumes that as your income—and, likely, your spending and standard of living—increases, you'll save more too.

Here's an example. Let's say you're 43 years old and you earn $60,000 per year. Using Fidelity's rule, you should aim to save $600,000 for retirement by the time you turn 67. This calculation takes into account the fact that Social Security will cover a portion of your expenses when you retire.

Age 67 is when you can start taking your full monthly Social Security benefit if you were born during or after 1960 (those born before that can take full benefits earlier). Fidelity calculates that saving 10 times your salary by 67 will allow you to replace 45% of your income per year in retirement, which, together with Social Security, could allow you to afford your current standard of living.

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Factors to Consider When Saving for Retirement

To build a retirement fund of 10 times your salary, a common rule of thumb is to save at least 15% of your pretax income each year throughout adulthood. On a $60,000 salary, that's $9,000 annually, or $750 per month. Fidelity's calculation assumes you started saving at age 25.

For many people, this is a difficult goal to attain. Expenses like housing and transportation can push retirement savings down the priority list. And, if you do have wiggle room in your budget, it's important to build an emergency fund to avoid burdensome debt should an unexpected expense arise. Plus, if you didn't start saving for retirement until your 30s or 40s, you'll have to save extra to catch up—precisely at a time when you may also be focusing on buying a home, having children or saving for a child's college education.

But saving for retirement is an urgent goal. Here's why: Since you'll be investing your money, the more time it sits in a retirement account, the more likely it is that money will grow. If you save in a 401(k), you may also be able to take advantage of an employer match, which is money your employer adds to your account if you save a portion of your own paycheck. The key rules to follow when saving for retirement are to start as early as possible, to save consistently and to increase contributions whenever your income goes up.

You may have specific circumstances that make it tricky to develop a savings plan. Maybe your spouse is a full-time caregiver who doesn't earn income outside the home, or they are significantly older than you and you'd like to fast-track your own savings so you can retire alongside them. Talking to a certified financial planner with expertise in retirement planning can help you determine the best path forward.

What to Do if You Don't Have Enough Retirement Savings

If you haven't yet started saving—or you're not yet on track to hit your goal—the most important step to take is to start saving today, even if it's less than 15% of your pretax income. Find one place in your budget where you can cut expenses by $50 or $100 a month and direct that money toward retirement. Doing so can help you recognize that saving is possible, and you might feel more motivated to save more.

Then, pick a retirement account type. You may decide to save in a workplace 401(k), a traditional or Roth individual retirement account (IRA) or both. One of the main advantages of saving in a 401(k) or traditional IRA is that your contributions come out of your pretax income, which will reduce your taxable income at the end of the year (you'll pay taxes on that money when you start withdrawing it in retirement). There are also a variety of retirement fund options for self-employed individuals, which can come with tax incentives. If you're unsure which account to choose, find out if your employer offers free financial counseling as a workplace benefit, or if its benefits administrator will set up time to talk you through your options.

Another possibility is speaking with a nonprofit credit counselor, who can provide guidance on trimming expenses and retooling your budget so you can save more for retirement. A counselor may also be able to offer general advice about the best retirement saving vehicle for you.

Achieving Your Retirement Goals

Saving now for years in the future is the opposite of instant gratification—it can be difficult to imagine the experience of retirement at all, and saving up for this life stage can be easy to put off.

But do your best to realign your approach to make room for retirement savings. As you plan to save 10 times your current salary by age 67, break it up into monthly contributions, and take small steps to work those contributions into your budget. Think of these savings as an investment in your future happiness, or a gift you'll give your future self and your family.