January 3, 2024

Retirement Savings Benchmarks for 2024: How Do You Compare?

Pursuing financial freedom is nuanced, but understanding how your unique circumstances align with the latest retirement “benchmarks” is essential. This comprehensive blog post will explore a range of financial benchmarks tailored to different income levels and ages, offering more specific insights and strategic considerations for anyone above the age of 30.

Source: Northwestern Mutual

Tailoring Your Retirement Savings Goals:

Setting a Personalized Retirement Savings Goal:

While conventional wisdom suggests aiming for 70-80% of your pre-retirement income, this number can vary depending on the lifestyle goals you've set for your post-work years. Collaborate closely with your financial advisor to establish a retirement savings plan that aligns with your desired standard of living, accounting for luxury expenditures, travel plans, and philanthropic aspirations.

The 25x Rule for High Net Worth Individuals:

Consider surpassing the standard 25x rule, especially if you have a high salary. The table provides detailed benchmarks that showcase the expected savings range at different ages and salary levels. For instance, by age 60, the recommended savings range for a $200,000 salary is $2,225,000 - $2,725,000.

Maximizing Tax-Advantaged Accounts:

With higher incomes, optimizing tax-advantaged accounts becomes even more critical. Strategies like backdoor Roth conversions, strategic withdrawals, and effective estate planning can help minimize tax implications and maximize wealth preservation.

Age-Based Savings Benchmarks:

Tracking your progress against age-based savings milestones ensures you stay on the right path. By age 50, experts recommend having the equivalent of your annual salary saved. By age 65, the savings range for a $150,000 salary is $1,855,000 - $2,245,000, emphasizing the need for consistent contributions and adjustments.

Fidelity also suggests a timeline to use in order to get to that magic number:

  • By 30: Have the equivalent of your salary saved
  • By 40: Have three times your salary saved
  • By 50: Have six times your salary saved
  • By 60: Have eight times your salary saved
  • By 67: Have 10 times your salary saved
  • Key Takeaways for Elite Retirement Planning:

Holistic Financial Planning:

  • Craft a comprehensive financial plan beyond retirement savings to encompass tax planning, estate planning, and potential healthcare costs.

Professional Guidance:

  • Engage with financial professionals to navigate the complexities of retirement, seeking advice on investment strategies, tax optimization, and wealth preservation.

Regular Review:

  • Periodically reassess your retirement plan for income, expenses, or investment performance changes. Flexibility is crucial to adapt to evolving circumstances.

Celebrating Milestones:

  • Acknowledge and celebrate your achievements as you reach savings milestones. Your commitment to financial well-being deserves recognition.
The above chart shows that U.S. residents 35 and under have an average of $30,170 in retirement savings; those 35 to 44 have an average $131,950; those 45 to 54 have an average $254,720; those 55 to 64 have an average $408,420; those 65 to 74 have an average $426,070; and those over 70 have an average $357,920. (Source: Federal Reserve Survey of Consumer Finances: https://www.federalreserve.gov/econres/scfindex.htm)

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Every Day is Saturday

Our job begins where most advisors stop—saving money is great, but how do you spend it without risk in retirement? Welcome to Every Day is Saturday with Brad Gotto and Matt Stahl, partners and private wealth managers at Fiat Wealth Management.

In this podcast we help guide you to think about your money in a practical sense and make the boring and complex financial decisions, fun, informative and educational. Join us on this journey where Brad and Matt will explore different strategies on how to spend your money without guilt and have peace of mind knowing you are spending it the optimal way in retirement.

You’ve saved money for a lifetime. Now it’s time to spend it.

In Spending Money and Having Fun, Retirement Income Certified Professional Brad Gotto teaches you how to be smart about spending so you can stop worrying and live the life you want. Old habits are hard to break, but Brad helps you embrace the counterintuitive and build new habits to support your next chapter. You’ll learn how to:

  • Change your mindset around spending

  • Create boundaries that buy you freedom

  • Gain peace of mind with concepts that take the guesswork out of your financial requirements