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How Much Should You Have Saved at Age 65?

For many years, social security considered age 65 full retirement age. It remains the age at which you are eligible for Medicare. Thus, 65 is one of the most common ages at which people begin their retirement. 

Retirement is a major milestone in life and one that requires careful planning and preparation. One of the most common questions that people ask themselves is: How much should I have saved by the time I retire?

The answer to this question is not simple, as it depends on many factors, such as your income, expenses, lifestyle, goals, health, and longevity. However, there are some general guidelines and rules of thumb that can help you estimate how much you need to save for retirement. In this blog post, I will provide you with some general guidelines and rules of thumb that can help you estimate how much you need to save for retirement. I will also show you how to use the 4% rule, a simple and widely used method to calculate your retirement income needs.

Average Net Worth by Age

One way to gauge how much you need to save for retirement is to compare your net worth with the average net worth of people in your age group. Net worth is the difference between your assets and liabilities. The following table shows the average net worth of Americans at or near retirement. It is based on 2019 data from the Federal Reserve Board’s Survey of Consumer Finances:

AgeMean Net WorthMedian Net Worth25%75%90%Top 1%

As you can see, there is a huge gap between the mean and median net worth of each age group. This means that there are some outliers who have very high net worths that skew the average upward. The median net worth is more representative of the typical American in each age group.

The median net worth for the 60-64 year bracket is $229 thousand and $272 thousand for the 65-69 year bracket. Those in the top 10% of net worth have close to $2 million. While these numbers can give you a rough idea of how much others have saved for retirement, they do not tell you how much you need to save for your own retirement. You need to consider your own income, expenses, lifestyle, goals, health, and longevity.

Rules of Thumb for Retirement Savings

Another way to estimate how much you need to save for retirement is to use some rules of thumb that are based on multiples of your salary or income. These rules of thumb assume that you want to maintain a certain percentage of your pre-retirement income during retirement.

T. Rowe Price suggests that you should have saved between 8.5 and 13.5 times your salary by age 65, depending on your income level. Higher earners need to have a greater multiple of their salary saved because social security provides less of their spending needs:

Fidelity recommends that you should have saved 10X your salary at age 67. That would allow someone to replace 45% of their pre-retirement income with asset withdrawals (the remainder coming from social security and other sources). They assume a retiree would live until 93 and with a reasonable portfolio allocation should not run out of money. 

Let’s take a hypothetical 65-year-old entering retirement who made $100 thousand. T. Rowe Price’s table says they should have 10.5X their salary saved, or $1.05 million. According to Fidelity’s rule, they should have saved 10 times their salary or $1 million by age 67.

The 4% Rule for Retirement Income: 

A more personalized way to calculate how much you need to save for retirement is to use the 4% rule. The 4% rule is a simple and widely used method to estimate how much you can withdraw from your retirement portfolio each year without running out of money. In a recent post, I detailed how the 4% rule still is an appropriate withdrawal rate in today’s investing climate. 

The 4% rule assumes you withdraw 4% of your assets in the first year of retirement and inflation-adjust each subsequent withdrawal. Assuming you follow a solid portfolio allocation and rebalance regularly, the portfolio has lasted at least 30 years historically. 

Here’s how you would use the 4% rule to determine how much you should have saved: 

  • Calculate your annual spending needs in retirement. This is the amount of money that you need to cover your essential and discretionary expenses, such as housing, food, health care, travel, entertainment, etc.
  • Subtract your other sources of retirement income from your spending needs. These are the income streams that you can rely on during retirement, such as social security, pensions, annuities, etc.
  • Divide the remaining spending that needs to be funded by 0.04. 

Here’s an example: 

  • Spending Needs: $80 thousand
  • Social Security: $30 Thousand
  • Funding Need: $50 Thousand.
    • $50,000 / 0.04 = $1.25 million

Thus someone spending $80,000 would need assets of $1.25 million to retire at 65, assuming social security benefits of $30,000. 


Retirement planning is not an exact science. It involves many uncertainties and assumptions that can change over time. Therefore, you need to be flexible and adaptable in your retirement strategy.

The guidelines and rules of thumb that we discussed in this blog post can help you estimate how much you need to save for retirement based on your income level and spending needs. However, they are not substitutes for a comprehensive and customized retirement plan that takes into account your specific situation and preferences.

At Sophos Wealth Management, we can help you create a personalized retirement plan that aligns with your goals and values. We can help you:

  • Assess your current financial situation and net worth
  • Define your retirement vision and lifestyle
  • Project your retirement income and expenses
  • Optimize your portfolio allocation and withdrawal strategy
  • Minimize your taxes and fees
  • Maximize your social security and pension benefits
  • Plan for inflation, health care costs, and longevity risks
  • Adjust your plan as needed over time

If you are interested in working with us, please contact us today for a free consultation. We look forward to helping you achieve your retirement dreams.

Scott Caufield, CFA, CPA