Are You On Track For Retirement?

Fidelity Investments has created a set of guidelines to help individuals benchmark their savings progress at different ages throughout their careers. Although the guidelines are broad and individual circumstances may differ, they provide useful markers for tracking one’s savings goals over time. The guidelines are based on your current annual income and are as follows:

Saving Factor By Age

30 = 1X

40 = 3X

50 = 6X

60 = 8X

65 = 12X

67 = 10X

70 = 8X

For example, based on the guidelines, if you are currently earning $50,000 at the age of 30, you should have accumulated a total of $50,000 in some combination of 401(k), IRA, Roth IRA, and personal investment accounts. As your income rises to $100,000 by age 50, your total investment account balances should be $600,000 (6 X $100,000). Note that the ‘X’ factor begins to drop at age 67 and drops further at age 70. This is because Social Security payments go up the longer you postpone taking the benefits.

What can you do with this information? According to Fidelity, if you are behind on your savings, which is very common, and you are under age 40, focus on saving more and consider a more aggressive allocation to stocks versus bonds. For those who are age 40 or older, concentrate on spending less so you can save more. You may also want to consider working longer or, at least, working part-time during your retirement years. To review the full Fidelity article, click HERE.


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professional photo of certified financial planner Stewart Welch wearing black suit and red tieStewart H. Welch, III, CFP®, AEP, is the founder of THE WELCH GROUP, LLC, which specializes in providing fee-only investment management and financial advice to families throughout the United States. He is the author or co-author of six books, including 50 Rules of SuccessJ.K. Lasser’s New Rules for Estate, Retirement and Tax Planning- 6th Edition (John Wiley & Sons, Inc.); THINK Like a Self-Made Millionaireand 100 Tips for Creating a Champagne Retirement on a Shoestring Budget. For more information, visit The Welch GroupConsult your financial advisor before acting on comments in this article.



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