Am I Saving Enough for Retirement? The 2025 Reality Check

Here is the single most important retirement number you need to know: take your desired annual retirement income and multiply it by 25. That is how much you need saved to retire comfortably. If you want $60,000 per year in retirement, your target is $1,500,000. If you want $80,000, it is $2,000,000.

This target comes from the 4% rule — the widely-used guideline that says you can safely withdraw 4% of your retirement savings each year without running out of money over a 30-year retirement. $1,500,000 times 4% equals $60,000 per year. It is not perfect, but it is the best quick benchmark we have.

How do most Americans stack up? The average retirement savings by age tells a sobering story. At 30, the median is about $20,000. At 40, it is about $60,000. At 50, about $100,000. At 60, about $170,000. These numbers are far below the targets most people need, which is why financial experts constantly say to start saving earlier.

The math behind why starting early matters is dramatic. If you start saving $500 per month at age 25 with a 7% return, you will have approximately $1,200,000 by age 65. Wait until age 35 to start the same $500 per month, and you will have about $567,000. Those 10 years of delay cost you over $600,000 — and you contributed only $60,000 less.

The 2025 401k contribution limit is $23,500 per year ($31,000 if you are 50 or older). If your employer offers a match, contribute at least enough to get the full match — that is free money. A typical 50% match on 6% of salary means if you earn $75,000 and contribute $4,500, your employer adds $2,250. Leaving that match on the table is like declining a $2,250 raise.

If you are behind on retirement savings, do not panic — but do act now. Increase your 401k contribution by 1% of salary each year until you reach 15%. Open a Roth IRA and max it out ($7,000 per year in 2025). Automate everything so it happens without you thinking about it. And consider working 2 to 3 extra years, which dramatically reduces how much you need saved because you have more time to save and fewer years to fund.

Use our free retirement gap calculator to see if you are on track and exactly how much more you need to save each month.