Retirement savings can feel like a moving target for many people. The amount you need to save depends on your age, salary, and desired lifestyle in retirement. Financial experts have created benchmarks to help guide retirement savings based on age and income level.
For those making $100,000 per year, the goal is to have saved 2.5 times your salary by age 40. This increases to 12 times your salary or more by age 65. Higher earners need to save even more to maintain their standard of living in retirement.
Those making $150,000 annually should aim for 3.3 times their salary by 40 and 14 times by 65. $200,000 earners need 4 times their income saved by 40, growing to 16 times or more by 65. Dave Ramsey, a well-known financial advisor, offers several strategies for high-income earners to stay on track with retirement savings:
1.
Max out contributions to tax-advantaged retirement accounts like 401(k)s and IRAs. In 2025, you can contribute up to $23,000 to a 401(k) and $7,000 to an IRA, with additional catch-up amounts if you’re over 50. 2.
Use a backdoor Roth IRA. This allows high earners who exceed the regular Roth IRA income limits to still take advantage of tax-free growth and withdrawals in retirement.
Retirement savings benchmarks for high earners
3. Contribute to a Health Savings Account (HSA) if you have a high-deductible health plan. HSAs provide triple tax benefits.
4. Invest in taxable brokerage accounts, real estate, and other assets to diversify your retirement income streams. 5.
Be mindful of lifestyle inflation. Balance enjoying your current income with saving for the future. 6.
Plan ahead for healthcare costs. Consider options like long-term care insurance. 7.
Meet regularly with a financial advisor who can provide personalized guidance and keep you updated on changing laws and investment opportunities. The keys to a comfortable retirement are to start saving early, save consistently, and make smart investment choices. By understanding savings benchmarks and using savvy strategies, high earners can work toward the retirement lifestyle they envision.
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