This Is How Much You Should Have in Savings by 50. How Do You Compare?

This Is How Much You Should Have in Savings by 50. How Do You Compare? It’s how we make money. But our editorial integrity ensures that our product ratings are not influenced by compensation. Image source: Getty Images By age 50, the general recommendation is to have about five to six times your annual income saved up in retirement accounts, brokerage accounts, and other long-term savings accounts. For example, if you earn $80,000 a year, you'd want roughly $400,000 to $480,000 put away. Of course, this isn't a perfect rule for everyone. Here's why you might need more or less than this guideline, and what to do if you feel behind. The 5x-6x income guideline This benchmark is popular because it's easy to understand and flexible enough to work for a wide range of earners. Importantly, it's not just talking about cash sitting in a savings account . It typically includes: Retirement accounts like 401(k)s and IRAs Brokerage accounts Long-term savings earmarked for retirement Equity in other assets like rental properties or businesses The goal is to estimate whether your savings trajectory lines up with supporting your lifestyle once paychecks stop. But like most personal finance rules, it works best as a directional check, not a strict pass-fail test. If you're building toward that 5x-6x target, where you keep your investments matters. Take a look at today's top brokerage firms and how they fit into long-term retirement planning. Why this rule doesn't fit everyone perfectly No two retirement plans look exactly alike. So your ideal savings number may be higher or lower depending on your situation. One big factor is when you plan to retire. Someone aiming to fully leave work in their mid-50s will likely need more savings than someone planning to work into their late 60s. Earlier retirement generally means a higher savings target. Another consideration is guaranteed income . If you'll receive a pension or have other reliable income sources in retirement, you may not need to rely as heavily on personal savings as someone without those benefits. Your overall financial picture also matters. For example, some people own rental properties or other income-producing assets that help offset living expenses later in life. Others may expect to downsize or relocate to a lower-cost area, reducing how much they need to draw from savings each year. All of these variables can push your personal target above or below the standard guideline -- and that's completely normal. Not where you want to be yet? You still have options The good news is that most people approaching age 50 still have 10-20 working years ahead of them before retirement. This is plenty of time to make meaningful progress on savings. The most effective place to focus is often tax-advantaged retirement accounts, like 401(k)s and IRAs. These accounts allow your money to grow more efficiently, thanks to tax deferral or tax-free withdrawals later on. Once you hit 50, many retirement accounts also allow catch-up contributions, which raise your annual contribution limits...

Preview: ~500 words