Many Americans are anxious about their savings, especially as they approach retirement age.
Over half of Gen Xers, those aged 45 to 60, say they have no more than three times their current annual income saved for retirement, according to a study commissioned by life insurance and financial planning provider Northwestern Mutual.
This is significantly less than a benchmark set by Fidelity, one of the largest retirement plan providers in the U.S., which advises accumulating six times your current annual income by age 50 if you anticipate retiring at 67.
Other experts take a different view. There’s no magic number when it comes to saving for retirement, says Nathan Sebesta, a certified financial planner and owner of Artesia, New Mexico-based financial services firm Access Wealth Strategies.
How much you anticipate spending every year of retirement and when you decide to retire can greatly affect how much you should have saved, Sebesta says. For example, those who plan on retiring later, as well as downsizing and living more frugally, may need less than Fidelity’s benchmark, the report said.
Additionally, the baseline amount you need can vary by as much as $1.49 million depending on what state you decide to retire in, according to an analysis by GOBankingRates earlier this year.
To figure out how much you need, Sebesta recommends working backward. Start by deciding how much annual income you’ll want in retirement and estimate how long you’ll need that yearly income for. After taking that total and adjusting for inflation, you can determine how much you need to save each year and how your investments need to grow to hit that goal.
If you’re still feeling behind, Sebesta says there are a few other strategies you can consider to catch up and retire comfortably.
“Don’t panic,” Sebesta says. “Start where you are and as soon as you can.”
Consider claiming Social Security later
While you can start claiming Social Security benefits as early as age 62, doing so means you’ll receive a permanently reduced benefit. Alternatively, if you delay claiming benefits beyond full retirement age — 67 for Americans born after 1960 — your monthly payments could increase significantly, Sebesta says.
For every year you wait up to age 70, your benefit grows by about 8%. That means someone born after 1960 who waits until 70 could receive up to 24% more than they would at 67.
Use catch-up contributions
Once you turn 50, the Internal Revenue Service allows you to contribute more to various retirement plans in catch-up contributions. If you have a workplace retirement plan like a 401(k) or 403(b), you can contribute an extra $7,500 beyond the standard limit of $23,500, for a total of $31,000 in 2025.
For those with an individual retirement account, the 2025 contribution limit is $7,000, plus an extra $1,000 in catch-up contributions for those 50 and older.
These extra contributions not only help boost retirement savings but can also reduce your taxable income, which is especially valuable during high earning years in your 50s and 60s, Sebesta adds.
Catch-up contributions are “definitely a neat benefit for people looking for more savings,” Sebesta says, but they won’t work for everyone: “You’ve got to be willing to put the money into the plan as well.” If you haven’t consistently contributed over the years or are struggling to keep enough cash on hand, finding the extra money to take advantage of these higher limits may be difficult.
Lower your income standards
While it’s not the ideal scenario, if you’re significantly behind on retirement savings and working on paying off debt, Sebesta says you may have to consider lowering your expected lifestyle in retirement.
If you have 10 to 15 years left to plan, the focus may need to shift to paying off debt and getting to a point where you can live on less in retirement, Sebesta says. This may look like scaling back on expenses, downsizing your lifestyle or living in a more affordable area.
The last option would be to continue working in retirement. “No one ever dreams of that goal,” Sebesta says. “But if they do delay for so long and are not able to catch up completely, that might be, sadly, one of the realistic opportunities that they would have.”
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