If you're like the majority of people, you probably need to step up your retirement savings efforts. A 2017 report from the Government Accountability Office (GAO) found that the median retirement savings for Americans between age 55 and 64 was $107,000.﻿﻿ The GAO notes this sum would only translate into a $310 monthly payment if it was invested in an inflation-protected annuity.

Key Takeaways Retirement savings have dramatically increased since their pre-recession levels, including among millennials.

Aim to save at least 15% of your pre-tax income and make sure you contribute enough to your 401(k) to get the full benefit of your employer match, if it's offered.

It is never too early in your career to put a retirement plan together, but it's never too late to start, either.

Household savings in all retirement accounts have dramatically increased since their pre-recession levels, including among millennials ($9,000 in 2007 to $36,000 in 2017), Generation X ($32,000 to $71,000), and baby boomers ($75,000 to $157,000), according to a Sept. 2018 report from the Transamerica Center for Retirement Studies.﻿﻿ However, by Transamerica's 2019 report, conducted in Oct. 2018, savings for all three groups had dropped: millennials to $23,000, Gen X to $66,000, and boomers to $152,000.﻿﻿ Let's look at what people in various age groups have saved for retirement and how it stacks up to what the experts recommend.

Twentysomethings

If you're in your 20s and just starting out in your career, your paycheck probably reflects that fact. You're also likely to be carrying a good amount of student loan debt. The average monthly student loan payment for someone in their 20s was $393, according to a 2016 report from the Federal Reserve Bank of Cleveland.﻿﻿ High levels of debt combined with an entry-level salary help explain why the average twentysomething has an estimated median amount of $16,000 socked away.﻿﻿

On the bright side, those in their 20s should have around 40 years before they retire, which is a lot of time to make up a shortfall. The single most important thing to do is to contribute to your employer-sponsored retirement plan, such as a 401(k) plan or 403(b) plan. You can contribute up to $19,500 in 2020.﻿﻿

Investment management firm Fidelity recommends that you put aside at least 15% of your pre-tax income a year for retirement. If you can't save 15% of your salary, save as much as you can, and make sure you save enough to get the full benefit of your company's matching contribution if one is offered. Don’t turn away free money.

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Thirtysomethings

If you're in your 30s, you’ve likely moved up the ranks at your company or you’ve gained enough experience to get out of those entry-level pay grades. But life may be more complicated now. You might be married, have a few kids, maybe a home, and you're likely still paying off your student loans. With everything from the mortgage to soccer cleats to that unexpected car repair taking a bite out of your paycheck, saving for retirement may fall by the wayside.

Transamerica data shows thirtysomethings have a median $45,000 saved. Depending on your age and annual salary, you might be okay. According to Fidelity, you should have about the equivalent of your annual salary saved as a nest egg at age 30, twice your salary at age 35, and three times your salary by the time you exit your 30s.

To reach these goals, it is a good idea to tighten up your family budget where you can and try to increase the percentage of your salary that you're saving annually, if at all possible. If you haven't started saving yet, you will need to save a higher percentage of your annual income.

For instance, if you don't start saving until you are 30, Fidelity recommends you put aside 18% of your salary a year, while someone starting at age 35 should try to save 23% a year.﻿﻿ Putting aside nearly a quarter of your income for retirement is a tall order for anyone with monthly bills and debt, and this underscores the importance of saving early.

Finally, don't be too conservative with your investing choices. You're still young enough to weather big market downswings—even the kind in the wake of the pandemic—because your portfolio has time to recover.

Fortysomethings

If you’re in your 40s, you're probably in the prime of your career. You’ve paid your dues and now, one hopes, you have a salary that reflects that. With any luck, you’ll come to the end of those student loan payments sometime in this decade, freeing up more money.

But the house is bigger, the kids are older and may need help buying a car or paying for school—and, if you’re honest, you might be blowing money on things you could do without.

Statistically, most Americans are dangerously behind at this point, with an estimated median savings of only $63,000. Remember that Fidelity recommends that you have three times your annual salary saved by the time you reach 40. So, if you’re making $55,000, you should have a balance of $165,000 already banked. At age 45, it is recommended you have four times your annual salary saved and six times that level by the time you reach 50.﻿﻿

If you are behind (and even if you're not), you should try to max out your 401(k) contributions. If you don’t already have an IRA, start one and try to max that out as well. The amount you can contribute to an IRA is $6,000 in 2020. To reach these goals, consider putting any raises you get toward retirement savings. And if you no longer have student loan payments, commit those sums to your nest egg as well.

Fiftysomethings

If you're in your 50s, you're nearing retirement age, but still have time to save. You also might be paying your children's college tuition and helping them with car payments, gasoline, and any number of other expenses. The house may be getting older and need fixing up, and your medical bills are almost certainly rising.

The estimated median savings of fiftysomethings is about $117,000—far shy of the desirable six to eight times annual income that Fidelity recommends.

If you are 50 or older, you can contribute an extra $1,000 a year to your IRA and an extra $6,500 a year, in 2020, to your 401(k) or 403(b) in what is known as a catch-up contribution.﻿﻿ ﻿﻿ Besides taking advantage of catch-up contributions, consider downsizing by selling your home and collecting any appreciated value.

If you have company stock options or other assets, don’t forget to consider those as part of your retirement balance, even if they don’t sit in a retirement account. Consider meeting with a financial planner, especially one who specializes in retirement, to get things in order.

Sixtysomethings

This is typically the decade when you begin to reap the rewards of decades of saving. By the time you reach 60, you should have eight times your annual salary saved, according to Fidelity, while those who are 67 should have 10 times their salary saved.

Unfortunately, Transamerica reports the estimated median savings for sixtysomethings is $172,000. At this point, it’s harder to save enough to make up for any shortfall. If you are behind on your savings, take a hard look at your assets and see what can be monetized at some point to help sustain you.

This is also the decade you can start receiving Social Security benefits. Most seniors find this to be a significant source of monthly income. For instance, the average monthly benefit for a retired worker in 2020 was $1,503 per month.﻿﻿

The Bottom Line

The amount needed for retirement is different for everyone. Nevertheless, there are benchmarks you can try to hit at every decade of your life. It's never too early in your career to put a plan together, but it's never too late to start, either.