The most commonly cited benchmark for retirement savings comes from Fidelity: aim to have 1x your annual salary saved by age 30 (fidelity.com/viewpoints/retirement/how-much-do-i-need-to-retire). To hit that, you’d need to save roughly 15% of gross income starting in your mid-20s — a number that includes any employer 401(k) match.
That benchmark is a goal, not a judgment. Most people in their 20s are not saving 15%. Federal Reserve data from the 2024 Survey of Household Economics and Decisionmaking (released May 2025; federalreserve.gov/publications/2025-economic-well-being-of-us-households-in-2024-savings-and-investments.htm) shows only 36% of adults aged 18–29 have savings sufficient to cover three months of expenses. The point isn’t to feel behind — it’s to understand what the math requires and start moving toward it.
The Fidelity age milestones
| Age | Target savings (multiple of annual salary) |
|---|---|
| 30 | 1× |
| 40 | 3× |
| 50 | 6× |
| 60 | 8× |
| 67 | 10× |
These milestones assume you start at 25, invest predominantly in equities, retire at 67, and replace about 45% of pre-retirement income through savings (Social Security covers the rest), per Fidelity’s methodology at fidelity.com/viewpoints/retirement/how-much-do-i-need-to-retire. If you plan to retire earlier or have a higher income — where Social Security replaces a smaller percentage — you may need more.
What 15% looks like in practice
On a $50,000 salary:
- 15% of gross = $7,500/year, or $625/month
- If your employer matches 4% ($2,000), you need $5,500/year yourself — about $458/month
On a $60,000 salary with a 50% match on the first 6%:
- Employer contributes $1,800/year
- You need $7,200/year yourself to hit 15% total
(These are illustrative examples; use your actual salary and match to calculate your number.)
In Q4 2025, Fidelity reported the average total 401(k) savings rate across its book of business was 14.2% — 9.5% from employees and 4.7% from employers (about.fidelity.com/data-and-insights/q4-2025-retirement-analysis). That’s close to the 15% target, but it reflects people of all ages who have been saving for years. Workers in their 20s typically start lower.
What to prioritize in your 20s
Not all savings carry equal value. A rough priority order:
- 401(k) or 403(b) up to the employer match — an employer match is an immediate 50–100% return on the matched dollars. Don’t leave it on the table.
- High-yield savings account for an emergency fund — 3–6 months of expenses in a liquid account. Without this, unexpected costs become debt.
- Roth IRA — in your 20s, you’re likely in a lower tax bracket than you’ll be at retirement. Paying taxes now (Roth) rather than later (traditional) generally favors younger earners.
- 401(k) above the match — once the emergency fund and Roth IRA are funded, additional retirement contributions.
The emergency fund comes before additional retirement savings because without it, a single large expense forces you to either go into high-interest debt or raid retirement accounts (with taxes and penalties).
The compounding math
A dollar saved at 25 has roughly twice the time to compound as a dollar saved at 35. At a 7% average annual return:
- $5,000 saved at 25 grows to ~$53,000 by 65 (40 years)
- $5,000 saved at 35 grows to ~$27,000 by 65 (30 years)
The implication: modest contributions early outperform larger contributions later. As an illustrative comparison: saving $200/month from 25–35, then stopping, produces a larger balance at 65 than saving $400/month from 35–65, assuming a consistent 7% annual return.
Where most 20-somethings actually are
Federal Reserve Survey of Consumer Finances data (2022, most recent available; federalreserve.gov/econres/scf/dataviz/scf/table/) shows the median retirement savings for households under 35 is $18,880. The median bank account balance for the same group is approximately $5,400.
The gap between the benchmark (1x salary by 30) and the typical reality is real — but it’s also why starting now matters more than having the “right” number already saved.
Starting from zero mid-decade
If you’re 26 or 27 and haven’t started yet: you have roughly 3–4 years to reach 1x salary by 30. Whether you hit it exactly matters less than whether you’ve built the habit and are heading in the right direction. A 29-year-old with $25,000 saved and a $50,000 salary who is consistently saving 15% is in a far better position than someone who hit 1x exactly but then stopped.
Consistency over time matters more than hitting any single year’s benchmark precisely.