Editor's Note: APYs listed in this article are up-to-date as of the time of publication. They may fluctuate (up or down) as the Fed rate changes. CNBC Select will update as changes are made public.
How much you should be saving for retirement is an age-old question that just about everybody wants to know.
While the answer has a lot to do with when you plan to retire and the type of lifestyle you want to have in retirement, there are some general guidelines that you can follow at every age to help get you there.
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How much to save at each age
According to retirement plan provider Fidelity Investments, the rule of thumb is to save 10 times your income if you want to retire by age 67 — including anything in a retirement account and investments. Here's how that breaks down by each decade along the way:
- Savings by age 30: the equivalent of your annual salary saved; if you earn $55,000 per year, by your 30th birthday you should have $55,000 saved
- Savings by age 40: three times your income
- Savings by age 50: six times your income
- Savings by age 60: eight times your income
- Savings by age 67: ten times your income
When you plan to retire matters. Those retiring at 62 (the earliest you can claim Social Security) will need to save more to compensate for an additional five years without income. On the other hand, those retiring at 70 probably won't need the full amount of 10 times their income, as they will have worked an additional three years and presumably have fewer years left to spend their savings.
The type of lifestyle you want to have in retirement also plays a role. These age-based savings milestones are estimated to provide enough income for you to continue your current lifestyle in retirement, rather than planning to downsize or spend more.
How to start saving
To reach the above suggestions, Fidelity recommends that you save 15% of your income each year since age 25, including any 401(k) matches, and that, over your lifetime, you invest more than 50% of your savings in stocks to get a higher return on your money.
Anyone, no matter their age or savings, can get started with the same principles. Thanks to compound interest, which means you earn interest on interest, it's beneficial to start saving early — even if it's a small, regular contribution — and let it build over years and decades.
A high-yield savings account can help you grow your money faster than a normal savings account would.
The LendingClub® LevelUp Savings offers an above-average APY, plus the option to earn even higher when you deposit $250 or more per month into your account.
LendingClub LevelUp Savings Account
Annual Percentage Yield (APY)
4.40% (with monthly deposits of at least $250), or 3.40%
Minimum balance
None
Monthly fee
None
Maximum transactions
Excessive transactions fee
None
Overdraft fees
N/A
Offer checking account?
Yes
Offer ATM card?
Yes
Terms apply.
If you want some incentive to open a new savings account, the SoFi® Checking and Savings currently offers a welcome cash bonus of up to $300 depending on your direct deposit amount.*
When it comes to investing your savings, keep in mind that this is reserved for those with a long time horizon until retirement — aka they can take on more risk. The best place for beginners to invest is in a standard index fund that tracks the S&P 500 since it's more diversified than buying individual stocks. Most major brokerages offer an S&P 500 fund or ETF such as Vanguard.
Vanguard
Minimum deposit and balance
Minimum deposit and balance requirements may vary depending on the investment vehicle selected. No minimum to open a Vanguard account, but minimum $1,000 deposit to invest in many retirement funds; robo-advisor Vanguard Digital Advisor® requires minimum $100 to enroll
Fees
Fees may vary depending on the investment vehicle selected. Zero commission fees for stock and ETF trades; zero transaction fees for over 3,000 mutual funds; $20 annual service fee for IRAs and brokerage accounts unless you opt into paperless statements; robo-advisor Vanguard Digital Advisor® charges up to 0.20% in advisory fees (after 90 days)
Bonus
None
Investment vehicles
Robo-advisor: Vanguard Digital Advisor® IRA: Vanguard Traditional, Roth, Rollover, Spousal and SEP IRAs Brokerage and trading: Vanguard Trading Other: Vanguard 529 Plan
Investment options
Stocks, bonds, mutual funds, CDs, ETFs and options
Educational resources
Retirement planning tools
Terms apply.
FAQs
How much do I need to have in savings for retirement?
Fidelity recommends having eight times your income by age 60 and ten times your income by age 67. The amount you need in savings to retire comfortably largely depends on your lifestyle and what age you plan to retire. However, it is important to prepare for unexpected expenses such as medical costs or house repairs in retirement.
How are high-yield savings accounts different from traditional savings accounts?
High-yield savings accounts differ from traditional savings accounts in that they offer much higher interest rates, which allows your money to grow faster. Most high-yield savings accounts are offered by online banks that do not have physical locations. While funds in high-yield savings accounts are accessible, there may be a withdrawal or transfer limit.
What is the 50-30-20 budgeting rule?
The 50-30-20 budgeting rule is a popular budgeting strategy which means you put 50% of your paycheck toward things you need, 30% toward things you want and 20% toward savings and investment.
How can I save money in my 20s?
Saving money in your 20s can seem difficult, but making smart financial choices now can set you up for long-term financial success. It is important to set up a realistic and manageable budget to pay off debts such as student loans while also building an emergency fund.
If I'm already retired, how can I manage my savings?
Once you retire, it's important to set up a budget to avoid outliving your savings. One way to do this is using the 4% rule, which says you should withdraw 4% of your retirement savings during your first year of retirement. Each year following, you should take out the same amount, but make sure to adjust to inflation.
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At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every personal finance article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of financial products. We also considered CNBC Select audience data when available, such as general demographics and engagement with our content and tools. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.
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Andi Jones contributed to this story.
*New and existing Checking and Savings members who have not previously enrolled in Direct Deposit with SoFi are eligible to earn a cash bonus of either $50 (with at least $1,000 total Direct Deposits received during the Direct Deposit Bonus Period) OR $300 (with at least $5,000 total Direct Deposits received during the Direct Deposit Bonus Period). Cash bonus will be based on the total amount of Direct Deposit. Direct Deposit Promotion begins on 12/7/2023 and will be available through 1/31/2026. Full terms at sofi.com/banking. SoFi Checking and Savings is offered through SoFi Bank, N.A., Member FDIC. SoFi members who enroll in SoFi Plus with Direct Deposit or by paying the SoFi Plus Subscription Fee every 30 days or with $5,000 or more in Qualifying Deposits during the 30-Day Evaluation Period can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. Members without either SoFi Plus or Qualifying Deposits, during the 30-Day Evaluation Period will earn 1.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Only SoFi Plus members are eligible for other SoFi Plus benefits. Interest rates are variable and subject to change at any time. These rates are current as of 1/24/25. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet. See the SoFi Plus Terms and Conditions at https://www.sofi.com/terms-of-use/#plus.
