By age 40, financial experts generally recommend having saved about three times your annual salary for retirement. For example, if someone earns $70,000 a year, they should aim to have roughly $210,000 saved by 40. This target helps ensure a comfortable retirement by the time of full retirement age and assumes continued contributions and investment growth. Additional guidelines include:
- Having 1 to 1.5 times your income saved by age 35, then three times by 40.
- If earning £100,000 annually, a pension pot of £150,000 to £200,000 is suggested.
- The amount varies based on lifestyle choices, retirement age, and other financial goals.
- Saving roughly 15% of your income annually starting earlier helps achieve this target.
- For those behind, catch-up contributions in your 40s can be critical to meeting goals.
In summary, a practical rule is to have about three years' worth of your current salary saved by age 40 to stay on track for retirement.
