Retirement Readiness Series: Do you know if you’re on pace to retire comfortably?

Many people approaching retirement – or even decades away – find themselves asking this very question. It’s natural to wonder whether your nest egg is big enough, whether you’ve saved enough at this point in your life, and what “enough” even means. Take a moment to reflect: If you stopped working today, could your savings sustain the lifestyle you want for the rest of your life? If you’re not sure, you’re in good company. In fact, more than 1 in 5 Americans say their biggest financial regret is not starting to save for retirement earlier. But the good news is that it’s never too late to get on track.

One way to gauge your progress is by using some widely accepted benchmarks for retirement savings by age. Think of these as milestones or checkpoints that many financial planners suggest. While everyone’s situation is unique, these benchmarks give a general sense of whether you’re “on track” relative to your income and age. Below, we’ll break down a common rule of thumb for retirement readiness at various ages, explore the reasoning behind each savings target, and discuss what steps you might consider at each stage of life. We’ll also highlight common pitfalls that can throw you off track (and how to recover if you’ve fallen behind), offer perspective for those already retired, and cover key concepts like inflation, longevity, health care costs, and Social Security. By the end, you should have a clearer picture of your retirement trajectory and what actions to take next.

Before diving in, remember: these age-based guidelines are not hard-and-fast rules. They assume typical scenarios (such as retiring around age 67, with no pension, and Social Security providing part of your income). Your personal target might be higher or lower depending on your lifestyle, goals, and financial circumstances. Use these milestones as helpful guideposts, not strict requirements – and adjust as needed for your reality. Now, let’s see where you stand:

By Age 30: Aim to Have 1× Your Annual Income Saved to Be On Track For Retirement

Milestone: By the time you hit 30, a commonly cited benchmark is to have about one year’s worth of your current salary saved for retirement. In other words, if you’re earning $50,000 per year in your late 20s, you’d want roughly $50,000 set aside in your 401(k), IRA, and other retirement accounts by age 30. This 1× income goal at 30 is an early litmus test for whether you’ve started saving early enough.

Rationale: Why one-times your income? The idea is that if you begin saving in your early 20s (soon after starting your career), consistently put away a reasonable percentage of your pay, and invest it wisely, you’ll accumulate about one year’s salary by 30. Hitting this target means you’ve likely established good savings habits during your 20s and harnessed the power of compounding returns. That foundation can then grow significantly over the next several decades. In fact, financial analyses show that if you start investing around age 22 and save roughly 10–15% of your income (including any employer 401k match), reaching 1× your salary by 30 is quite achievable. It sets you up to build towards the later multiples in your 40s, 50s, and beyond. Essentially, this early benchmark puts you on a trajectory to accumulate the wealth you’ll need for retirement.

What to Do in Your 20s: For young adults, the biggest priority is just getting started. Retirement can feel far away at 22 or 25, but the earlier you begin, the easier it is to hit that 1× by 30. Aim to contribute at least enough to your workplace retirement plan to get the full employer match (that’s free money many people leave on the table) – and more if you can. A common guideline is to save around 15% of your pre-tax income each year for retirement, which might include both your contribution and your employer’s match. If 15% isn’t feasible initially, start with whatever you can (even 5-10%) and bump it up a percent or two each year or whenever you get a raise. Many plans let you automate these annual increases. The key is establishing the habit of saving.

Invest for growth: With decades ahead before retirement, your 20s are a time to invest mostly in growth-oriented assets. That generally means a high portion of stocks in your portfolio (often 80–90% stocks for folks in their 20s and early 30s), since stocks have higher potential returns to fuel your long-term growth. Don’t be overly conservative at this age – holding too much in cash or low-yield bonds can stunt the growth of your nest egg when time is on your side. If the stock market’s ups and downs make you nervous, remember that time smooths out volatility. You have 30+ years to ride out market swings, so a few bad years early on won’t ruin your outcome – as long as you stay invested.

If you’re not at 1× by 30: Don’t panic – everyone’s situation is different. Maybe you were in grad school, paying off student loans, or just didn’t start saving until later in your 20s. The important thing is to start now. In your early 30s, you still have plenty of time to catch up. Focus on boosting your savings rate – for example, contribute an extra few percent of your salary each year until you’re saving around 15% or more. Cut back on unnecessary expenses and funnel any windfalls (tax refunds, bonuses) into retirement savings. Also double-check you’re taking full advantage of employer contributions. The road ahead is not lost; you may just need to save a bit more aggressively going forward to reach the next milestones. The good news is that your 30s are a prime time to make impactful moves – you’re young enough that compounding can still work magic on new contributions, yet hopefully earning more than you did in your early 20s. We’ll talk more about catch-up strategies later on, but rest assured: falling a little short of the 30× benchmark is something you can overcome with diligence in the coming years.

By Age 40: Aim to Have 3× Your Annual Income Saved to Be On Track For Retirement

Milestone: By age 40, the guideline grows to roughly three times your annual income saved for retirement. If you’re earning $80,000 at 40, that means about $240,000 or more in retirement accounts by that point. Hitting 3× your salary in savings indicates that you’ve maintained solid saving and investing habits through your 20s and 30s. This can be a challenging leap – after all, your target at 30 was 1×, so you need to triple that over the next decade. But remember, you likely experienced income growth in your 30s and (hopefully) continued to save a significant portion of it. Plus, compounding returns (investment growth on top of growth) ideally started to kick in and accelerate your balance.

Rationale: Why 3× by 40? This target sets you on a path where, if you continue saving, you’ll accumulate around 10× by your mid-60s. In your 30s, many people see their earnings increase compared to their 20s. That means your contributions (as a percent of income) can have a bigger impact, and any employer matches also grow. By aiming for 3×, you’re essentially saying: I’m building momentum. It accounts for the fact that in your 30s, your earlier investments from your 20s have had time to grow (maybe doubling once or so by 40, given a decent rate of return), and you’ve been adding new contributions each year. Hitting 3× by 40 suggests you’ve kept your savings on track despite life’s many demands in mid-career. It’s also a crucial checkpoint because life often gets more complex in your 30s – things like buying a home, raising children, or other expenses can compete with retirement savings. If you can still reach ~3× your income by 40, you’re doing well at prioritizing long-term security.

Key Actions in Your 30s: The decade leading up to 40 is typically full of financial obligations. You might be juggling a mortgage, daycare or college savings for kids, maybe career changes – all while trying to save for your own future. A few tips for staying on track:

• Guard against “lifestyle creep.” As your income grows, it’s tempting to spend more on upgrading your lifestyle. By 40, many people earn considerably more than at 25, but if you simply matched your spending to your higher income, you might still have saved very little. Try to bank your raises – when you get a salary increase or a bonus, increase your retirement contributions before you inflate your spending. This way, you won’t miss the extra money because you never fully absorb it into your budget.
• Maximize tax-advantaged accounts. By your late 30s, aim to be maxing out your retirement accounts if possible. In practical terms, for 401(k)s that means contributing at least the annual limit (which is $22,500 in 2024 for those under 50, and tends to increase most years), or as close to it as you can. If you can’t max out, contribute a healthy percentage of your pay – ideally that 15% or more we discussed, which for many people will eventually hit the max. Also consider IRAs (traditional or Roth) if you’re eligible; you can contribute an additional $6,000–$7,000 per year there, depending on current IRS limits. These accounts offer tax-deferred or tax-free growth, which can significantly boost your savings over time. Every dollar you save in a retirement account is working for you, not going to taxes or being spent.
• Invest appropriately for mid-career. In your late 30s and around 40, you still have 20+ years until retirement, so your portfolio should still be growth-oriented – though perhaps slightly more balanced than in your 20s. Many advisors might suggest something like 70-80% in stocks and the rest in bonds or stable assets by age 40. This mix can help capture growth while starting to reduce volatility a bit. The exact numbers aren’t as important as the concept: don’t get too conservative too soon. One common mistake is that some 40-somethings get scared by a market downturn and shift heavily to cash or bonds, which can cripple their long-term growth (remember, you still have two decades for investments to recover). Stay diversified and keep a long-term perspective. If anything, a market dip in your 30s or 40s can be an opportunity to invest more at lower prices, as long as you have a solid emergency fund and job stability.

If you’re behind at 40: It’s not unusual to find yourself shy of the 3× goal by age 40 – many people fall behind due to career pauses, student debt, family costs, or just not getting serious about saving until their 30s. If that’s you, don’t be discouraged, but do take action. First, get a plan: calculate how far behind the target you are (maybe you have 1× or 2× instead of 3×) and determine how much extra you could realistically save going forward to catch up. You might need to reprioritize retirement over other financial goals for a while. For example, if you were focusing on your kids’ college fund, remember you can’t borrow for retirement – it’s okay to direct more dollars to your 401(k) and consider other ways to fund education (scholarships, cheaper colleges, or your child taking some loans). Look for ways to free up money: trim the fat in your budget, perhaps downsize your home or car if those expenses are crowding out savings, or find opportunities to increase your income (a side hustle, or pursuing a promotion). Another powerful lever if you’re behind in your 40s is time – consider whether you could extend your working years a bit. Working even 2-3 years longer than planned can substantially improve your retirement outlook, both by giving you more years to save and reducing the number of years your savings need to support you. We’ll discuss delaying retirement and other catch-up tactics more later on. The bottom line: at 40, you still have time to adjust course. It might take some effort and discipline, but many people make their greatest financial strides in their 40s and 50s once they truly focus on retirement planning.

By Age 50: Aim to Have 6× Your Annual Income Saved to Be On Track For Retirement

Milestone: By your 50th birthday, the recommended target is roughly six times your annual salary saved. So if you’re earning $100,000 at 50, you’d want about $600,000 put away for retirement. This is a big jump from the 3× at 40, reflecting that your 40s are prime earning (and saving) years for many. In fact, your 40s and early 50s are often when people make the largest strides in retirement preparation – you’re hopefully past the entry-level career stage, perhaps the kids are getting older (or out of the house soon), and you may be able to focus more on your own financial goals.

Rationale: Six-times income by 50 keeps you on pace to accumulate that magic ~10× by your mid-to-late 60s. Why 6×? Consider that between 40 and 50, you have another decade of compounding plus typically higher contributions. For example, if you had ~3× at 40 and continued to save 15%+ of a growing salary, with investment growth on top, you might double or more your savings in those ten years. Reaching 6× at 50 means you’ve roughly doubled your nest egg since age 40 – a reasonable goal if you stayed disciplined. It also acknowledges that retirement is drawing much closer now. At 50, you might only have 10-15 years of work left, so you want a substantial cushion by this point to give yourself flexibility. Additionally, age 50 is a pivotal time because if you’re not near the 6× mark, it’s a critical moment to course-correct (while you still have a decade or more to do so). Conversely, if you do have ~6× by 50, you can feel more confident that you’re on solid footing entering the home stretch of your career.

Key Actions in Your 40s: Hitting the 6× benchmark requires proactive steps during your 40s and early 50s:

• Take advantage of catch-up contributions. The IRS lets those aged 50 and above contribute extra to certain retirement accounts. For instance, in a 401(k) you can contribute an additional $7,500 per year (on top of the standard limit of $22,500, making it $30,000 for age 50+ in 2024). IRAs allow an extra $1,000 catch-up for those 50+. These catch-up provisions recognize that many people need to accelerate savings in the final stretch. If you’re financially able, try to max out these higher limits once you hit 50. It can substantially boost your savings during your last decade of work. And new laws are even enhancing this: starting in 2025, individuals around ages 60–63 will have even larger 401(k) catch-up limits (often called “super catch-ups”) allowing additional contributions beyond the regular catch-up. Staying informed about these opportunities can help you sock away more money tax-efficiently.
• Assess and adjust your investment mix. Around 50, it’s wise to gradually start dialing back on risk – but very carefully. You still likely have 15+ years of investing ahead (and perhaps 30+ years of life after retirement), so growth is still necessary. A common allocation for folks in their 50s might be roughly 60-70% in stocks, with 30-40% in bonds and cash. This is more conservative than in your younger years but still growth-oriented. The idea is to reduce volatility as retirement nears, but not to the point that inflation will erode your spending power. If you haven’t yet, this is a great time to diversify thoroughly – ensure you’re not overly concentrated in any single stock (including your own employer’s stock). Plenty of people have been hurt by having too much of their company’s stock in their 401k, so keep any company shares to a reasonable percentage of your portfolio (a rule of thumb is not more than 5-10%). Also, consider rebalancing your portfolio annually. This means adjusting back to your target asset mix if, say, a stock rally has left you too stock-heavy. Rebalancing forces a “buy low, sell high” discipline and maintains your risk level. Many 401(k) plans offer automatic rebalancing or you can do it yourself periodically.
• Catch and correct any bad habits. By our 40s, some of us might slip into counterproductive behaviors. For example, avoid pulling money out of your retirement accounts early. At this stage, your accounts might have sizable balances, and it can be tempting to dip into them for other needs (or wants). But early withdrawals come with taxes and penalties if you’re under 59½, and even beyond those costs, you lose the future growth that money could have generated. Similarly, be cautious about 401(k) loans – while borrowing from your own account can be better than high-interest debt, it still can set you back if you’re not careful (you might miss out on growth or, worst case, lose your job and have to pay it back quickly). Another pitfall to avoid in your 40s and 50s is getting too conservative too fast. Some people, fearing a market crash as retirement nears, shift almost entirely to cash or very low-risk investments in their 50s. But remember, at 50 you likely have 30-40% of your life ahead – your money needs to last and grow through retirement. Being overly conservative can mean your nest egg won’t keep up with inflation and healthcare costs later on. It’s a delicate balance: gradually reduce risk, yes, but don’t abandon growth. You still need your money working for you.

If you’re behind at 50: Perhaps you’re looking at your savings and thinking, “There’s no way I have six times my salary saved.” First, know that you’re not alone. Plenty of 50-somethings are in the same boat, and there are strategies to improve your outlook even now. Here are a few ideas:

• Maximize those catch-up contributions as mentioned. If you weren’t hitting the contribution limits before, now’s the time to try. Every extra dollar in your 50s counts more than ever. If you can’t immediately jump to the max, increase your contributions gradually (but consistently) until you get there. Also, make sure you’re using all available retirement vehicles – for example, if you’ve maxed your 401k, put money in an IRA; if your employer offers a Health Savings Account (HSA) and you’re eligible, contribute there too (HSAs have triple tax advantages and can be used to pay medical expenses in retirement).
• Consider delaying retirement (or working part-time). If you initially hoped to retire at 62, assess if pushing that to 65 or 67 could fill the gap. Working a few extra years not only allows more savings and investment growth, it also shortens the retirement period you need to fund. Even semi-retirement (like consulting or part-time work) can help reduce how much you withdraw early on. And importantly, delaying Social Security can significantly increase your guaranteed income – for each year you wait past your full retirement age (around 67) up to age 70, your Social Security benefit grows by about 8%. If you’re behind on savings, delaying Social Security until 70 is often a wise move to get a larger monthly check (we’ll elaborate on Social Security later).
• Reevaluate your retirement lifestyle expectations. It might be time for a frank assessment of what kind of retirement your current savings can support, and whether you’re willing to make changes. Perhaps you imagined a luxury travel-filled retirement – if savings are short, you may need to dial those plans back or find creative ways to fund them (like working part of the year to pay for big trips). Look into downsizing your home to free up equity or reduce expenses, relocating to a lower cost-of-living area, or cutting out some planned expenses. This doesn’t mean giving up on enjoyment – it means ensuring your essential needs can be met with your resources, and then prioritizing which “wants” matter most.
• Get professional advice. If ever there’s a time to seek guidance, the early 50s might be it, especially if you feel behind. A financial planner can run a detailed projection for you, identify areas to adjust, and suggest tactics (like tax-efficient withdrawal plans, pension payout options, etc.) tailored to your situation. We’ll touch more on professional help later, but know that catching up in your 50s is doable – it often just requires a multi-pronged approach and a willingness to act.

By Age 60: Aim to Have 8× Your Annual Income Saved to Be On Track For Retirement

Milestone: As you enter your 60s, the typical goal is to have about eight times your yearly salary saved. At a $100,000 income, that means $800,000 saved by age 60. By this stage, retirement is very much on the horizon – possibly only a few years away for those planning to retire in their early to mid-60s. Reaching 8× by 60 suggests that you’re on the home stretch financially. You’ve accumulated a significant nest egg that, with a few more years of growth and contributions, could reach the final target (10× by your late 60s).

Rationale: Why 8× at 60? If you plan to retire around the traditional age (65–67), having eight times your income at 60 positions you well. You likely have around five to seven years of work left. If you continue saving during those years and your investments grow moderately, you can plausibly go from ~8× at 60 to ~10× by your late 60s. In fact, some people choose to partially retire or cut back hours in their early 60s once they hit certain financial thresholds. It’s not uncommon to see folks retire at 60 or 62 if they’ve reached their savings goals early. But keep in mind, if you retire at 60 with 8× saved, those funds may need to last longer (perhaps 25-30 years), and you won’t have access to Medicare until 65 or full Social Security benefits until 67+. So the 8× guideline at 60 is a checkpoint that assumes you’ll keep going a few more years. It’s essentially saying: by 60, you should have most of your retirement fund built, so that the remaining years are about fine-tuning and final contributions.

Key Actions in Your 50s: In the decade leading up to 60, and the first couple years of your 60s, focus on consolidating and protecting your retirement readiness:

• Super-charge savings in the final lap. If you’re not already maxing out your contributions, now is the time. Take full advantage of both the regular and catch-up limits on 401(k)s and IRAs. Remember those “super catch-up” contributions mentioned earlier – if you’re 60–63, you may be eligible to contribute even more above the standard catch-up (the exact extra amount can vary with legislation, but it’s meant to let late-career workers put in as much as possible). Also, if you have after-tax contribution options in a 401k (beyond the normal limits) and your plan allows it, consider those as well, or even a backdoor Roth IRA if it makes sense – these can be complex, so professional advice is helpful, but the idea is to sock away every dollar you can. Many in their 50s also channel unexpected windfalls – like an inheritance or paid-off mortgage – straight into investments for retirement.
• Plan for health care and insurance. One reason some continue working until 65 is to maintain employer health insurance until Medicare kicks in. If you retire before 65, be prepared for potentially high health insurance costs in the interim (via COBRA or private plans). It’s wise in your late 50s to ensure you have a strategy for medical coverage between retirement and Medicare. This could influence whether retiring at 60 vs. 65 is feasible. Additionally, consider long-term care insurance or alternative plans for long-term care needs – your early 60s might be the last good window to purchase a policy at somewhat reasonable rates, if it fits your situation. Thinking about healthcare now is part of “protecting” your nest egg – unexpected medical costs can rapidly erode savings, so any steps to mitigate that risk (insurance, HSAs, healthy living) are beneficial.
• Fine-tune your investment risk level. By 60, you’ll want to have reduced your exposure to extreme market swings, but without going totally to cash. Perhaps an allocation near 50-60% stocks and 40-50% bonds/cash is appropriate now (some might be a bit more conservative or aggressive depending on personal risk tolerance). The goal is that a market crash in the year you plan to retire won’t devastate your plans. It’s a delicate balance: enough in safer assets to cover the early retirement years even if a downturn hits, but enough in growth assets to carry you through later years and keep up with inflation. Many soon-to-be retirees establish a “bucket” approach: for example, keep 1-2 years’ worth of living expenses in cash or very safe short-term bonds for immediate needs, have another 3-5 years of expenses in slightly more conservative investments, and the rest in a stock-heavy portfolio for long-term growth. This way, if a recession strikes at age 61, you could live off the safe “bucket” for a couple years and give your stocks time to recover before you need to sell them. The specifics can get complex, but the principle is to shield your short-term needs from market risk while still investing for the long haul.
• Start mapping out your withdrawal strategy. You don’t have to have every detail set at 60, but begin thinking about how you’ll actually tap your savings when the time comes. Will you draw from your 401(k)/IRA immediately, or use taxable brokerage savings first? Are you planning to wait until 67 or 70 for Social Security to maximize it? Perhaps you’ll withdraw from after-tax accounts in the early years to let tax-deferred accounts grow a bit more (and reduce RMDs later). There’s also the consideration of Required Minimum Distributions (RMDs) – currently, you must start taking withdrawals from traditional retirement accounts at age 73 (for those turning 73 this year; it will be 75 for younger folks in a decade) – which can affect your tax situation. Some retirees do Roth conversions in their early 60s (before RMDs and while in a lower tax bracket) to move money from traditional IRAs to Roth IRAs, thereby reducing future taxable RMDs. These are advanced moves, so it’s wise to consult a financial advisor or tax professional. The main point is: as retirement nears, it’s not just about the amount you’ve saved, but how you’ll use it. Starting to sketch out a retirement budget and withdrawal plan at 60 will make the transition smoother.

If you’re behind at 60: At this stage, retirement may be just around the corner, and falling short of the 8× target can be stressful. But there are still steps you can take:

• Delay retirement (if possible). Working a few extra years can have one of the biggest impacts if you’re behind. Each additional year of work beyond your original plan can markedly improve your finances. It gives your investments more time to grow (hopefully), you can contribute more, and you shorten the retirement period. For example, working from 62 to 65 instead of retiring at 62 could mean three more years of savings and three fewer years to fund – a double win. Not everyone can or wants to work longer, but if you’re willing and able, it’s a powerful lever.
• Optimize Social Security timing. As mentioned, holding off on claiming Social Security increases your benefit. If your savings are lower, you might plan to rely more on Social Security, so maximizing it is crucial. Waiting until age 70 yields the largest monthly check (about 24-32% higher than your full retirement age benefit, depending on when you were born). If you’re behind on savings, strongly consider working until at least your full retirement age (66-67) or later, so you don’t lock in the reduced age-62 benefit. Social Security is essentially a guaranteed, inflation-adjusted income stream, so a bigger benefit can compensate somewhat for a smaller portfolio.
• Adjust your retirement lifestyle plans. We touched on this for those in their 50s, and it’s even more pertinent at 60. You may need to make some hard but realistic choices to ensure you don’t outlive your money. This could mean scaling back discretionary spending (like more modest travel plans, dining out less, or sticking with your current paid-off home instead of buying a new vacation home). It might involve downsizing to reduce housing costs or moving to a locale with lower expenses or taxes. Some retirees who find themselves short of funds also look into ways to tap home equity if needed, such as a reverse mortgage (though that’s a big decision with pros and cons). The earlier you adjust expectations, the easier the transition will be. Many retirees actually find they don’t mind a simpler lifestyle if it means less financial stress – for example, spending more time on hobbies that don’t cost much, or traveling during off-peak seasons cheaply. It’s all about balance and making sure your money lasts.
• Seek guidance and get creative. At this stage, it can be very helpful to consult a financial planner for a retirement income plan. They might suggest creative solutions you hadn’t thought of – maybe annuitizing a portion of your savings to guarantee lifelong income for essential expenses, or strategies to minimize taxes and maximize what you keep. You could also consider part-time work or consulting in retirement for a few years. Even earning a modest amount (say $10k-$20k a year) in your 60s can significantly ease the drawdown on your savings, giving your investments more time to last.

In summary, by age 60, you ideally want to be close to your end goal, but if you’re not, there are still measures to improve your situation. The overarching theme is flexibility: be willing to adjust timing (retire a bit later), adjust lifestyle (spend a bit less), and use all available tools (catch-ups, optimized Social Security, part-time income) to bolster your retirement security.

By Age 67: Aim to Have 10× Your Annual Income Saved (Retirement Ready)

Milestone: Around the typical full retirement age (mid-to-late 60s), many experts recommend accumulating roughly ten times your final annual salary in retirement savings. So if you retire at 67 earning $80,000, you’d want about $800,000 set aside. Reaching ~10× your income means you’ve amassed a nest egg that – combined with Social Security – should reasonably be able to replace a large portion of your pre-retirement income each year. This is essentially the finish line of the rule-of-thumb milestones; it suggests you’re “retirement ready.”

Rationale: The 10× figure isn’t magic, but it’s grounded in some logic. Financial planners often estimate that to maintain your standard of living in retirement, you might need around 70–80% of your pre-retirement income per year (because you’ll spend less on some things, like commuting or maybe mortgage if it’s paid off, but more on healthcare, etc.). Social Security benefits, on average, replace roughly ~40% of pre-retirement income for the average worker. That leaves about 30-40% of your old income that needs to come from your own savings each year. How do your savings produce that income? One common approach is the “4% rule,” which suggests that if you withdraw about 4% of your retirement portfolio in the first year of retirement (and adjust that amount for inflation each year after), your money could last roughly 30 years. If you have 10× your salary saved, and you withdraw 4% of it, that distribution is equal to about 40% of your pre-retirement salary – which, combined with Social Security’s ~40%, gets you to roughly 80% income replacement. For example, say you retire making $100k: 10× is $1,000,000 saved. Four percent of $1,000,000 is $40,000 a year. If Social Security provides around $30-$40k (which is ~30-40% of $100k, depending on your earnings history), then $40k from savings + let’s say $35k from Social Security = $75k, which is 75% of your former $100k salary. That’s in the ballpark of what many retirees need. Of course, this is a simplification – some will need more, some less, and the 4% rule is a guideline, not a guarantee. But it shows how 10× was arrived at as a reasonable target.

Actions as Retirement Begins: If you’ve reached your late 60s with around 10× your income saved, congratulations – you’ve put yourself in a good position. But the work isn’t completely over. The focus now shifts from accumulating assets to managing and preserving them so they last through retirement:

• Reconfirm your plan and numbers. It’s wise to do a thorough retirement plan review as you retire. Revisit your expected expenses in retirement – not just the fun stuff like travel, but also essentials and contingencies. Make sure to account for taxes on retirement account withdrawals (many forget that a $1,000,000 traditional IRA isn’t all theirs to spend; some will go to Uncle Sam as you withdraw). Double-check that 10× truly is enough for your lifestyle. For some, 10× might be plenty or even more than enough; for others, with expensive goals or higher cost of living, 10× might still require belt-tightening.
• Decide on a withdrawal strategy. We introduced the idea of the 4% rule above, but in practice you might choose a more customized approach. For example, some opt for a dynamic withdrawal strategy (withdraw a bit less after bad market years and a bit more after good years) to extend portfolio life. Others use the bucket strategy or set up systematic withdrawals from certain accounts. There’s also the consideration of which accounts to tap first: conventional wisdom often suggests using taxable savings first, then tax-deferred (IRA/401k) funds, and saving Roth IRA money for last (since it grows tax-free and has no RMDs). However, everyone’s tax situation differs. An optimal withdrawal plan might involve mixing sources to manage tax brackets – for instance, pulling some from IRA and some from Roth each year to avoid spiking your income. If this sounds complex, that’s because it can be – this is an area where a financial planner’s input can really pay off, potentially extending how long your money lasts by minimizing taxes and sequencing withdrawals smartly.
• Manage investments for longevity. Even at retirement, you should keep an investment portfolio that balances safety and growth. At 67, you hopefully have a couple decades ahead to enjoy retirement – meaning your money has to stretch that long as well. It’s prudent to maintain a significant allocation to stocks or other growth assets even in retirement, albeit at a lower percentage than before. For example, a newly retired person might still have 50-60% in equities. This is to ensure that your portfolio continues to grow enough to outpace inflation over time. Monitor your asset allocation and rebalance as needed. Also, keep an eye on investment fees and costs – in retirement, every dollar paid in high mutual fund fees or unnecessary charges is a dollar less for you to live on. Shifting to a low-cost portfolio (if not already in one) can help your money go farther.
• Plan for required distributions and benefits. As mentioned, by your early 70s you’ll have to start taking RMDs from traditional retirement accounts. You should prepare for that in terms of tax planning – RMDs can significantly raise your taxable income in those years. Some retirees convert chunks of their traditional IRA to Roth in their late 60s (after retiring but before RMD age) to reduce later taxable RMDs – again, a strategy to discuss with a professional. Also, if you delayed Social Security to 70, plan out how you’ll bridge income in the years from 67 to 70 (likely using more from savings in the short term, then easing off once the larger Social Security kicks in). Ensure your spouse knows the plan too, especially if one of you has a larger benefit – maximizing one benefit can provide a higher survivor benefit if one of you passes away, an important consideration for married couples.
• Stay flexible and vigilant. Reaching your target is fantastic, but life can throw curveballs: market downturns, inflation spikes, health issues, etc. Be prepared to adjust your plan. For instance, if the market has a severe drop in your first years of retirement (which is a risk known as sequence of returns risk), you might temporarily cut back on withdrawals or discretionary spending to avoid selling too much at low values. If inflation suddenly jumps (as it did recently), recognize that your fixed budget might need revisiting – maybe you need to trim some costs or your withdrawals may need to increase slightly (if sustainable). On the flip side, if your investments perform better than expected, you could potentially increase your withdrawals or spending a bit and enjoy more, or do additional gifting to family or charity. Regularly (say annually) review your portfolio balance versus your plan: are you drawing down principal faster than anticipated, or slower? This will give you cues to adjust.

If you haven’t reached 10× by your mid-to-late 60s: Not everyone hits this exact target, and it doesn’t mean retirement is impossible. Many people retire with less than 10× saved, especially if they have other support like a pension or if their lifestyle can adapt. The question to ask is whether your income sources (from savings, Social Security, maybe part-time work or rental income, etc.) will cover your expenses throughout retirement. If you’re short of the guideline, you have a few choices: work longer (if you’re still willing and able), reduce spending, perhaps tap into assets like home equity, or some combination of these. You might still retire at 67 with, say, 7× or 8× saved, and make it work by being frugal and maybe picking up a little side income. The benchmarks are not meant to be a pass/fail grade but rather a prompt to adjust if needed. And even if at 67 you feel behind, it’s not too late to implement some of the catch-up ideas we’ve discussed – for instance, delaying Social Security to 70 or finding ways to trim expenses. Retirement is personal: some can live well on 5× their income saved if they have very low costs or strong family support; others might need 15× if they have expensive tastes or medical needs. So, use 10× as a compass, not an absolute law.

Finally, congratulations to you if you’ve reached retirement after decades of working and saving. It’s an achievement to even get this far, regardless of the exact numbers. The focus now should be on making the most of your time in retirement, using your hard-earned savings wisely, and enjoying the lifestyle you planned for – which brings us to our next section, looking at those who are already retired.

DISCLAIMER:This blog’s content is provided solely for educational and informational purposes and should not be construed as personalized financial, investment, insurance, tax, legal or other professional advice. All information is general in nature and not specific to any individual’s circumstances. Accordingly, nothing in this blog constitutes a recommendation, offer or solicitation to purchase or sell any security, insurance product or other financial instrument. All opinions and analyses are those of the author and may change without notice; neither the author nor any affiliated entity guarantees the accuracy or completeness of the content.

Readers are strongly encouraged to conduct their own due diligence and to consult qualified professionals — such as a financial advisor, CPA, attorney or other specialist — about their specific situation before making any financial, investment, insurance, legal or tax decisions based on this blog. In short, you should not act on any information here without obtaining appropriate professional guidance tailored to your circumstances