I don’t think there’s any doubt that your seven hundred grand puts you far ahead of most people your age when it comes to retirement savings. The latest figures from the Employee Benefit Research Institute (EBRI) show that the average IRA balance for people 45 to 49 years old was a bit over $72,000, while 401(k) participants in their 40s who’ve been with their employer more than 20 years (and thus most likely to be long-time contributors to their plan) have an average balance of roughly $159,000.
But whether your sizable nest egg means you’re on track in the sense that you’ll be able to maintain your standard of living in retirement — which, after all, should be your primary goal — is another question. And the answer depends not just on the size of your retirement savings accounts at a given age, but a variety of factors including how much you earn, the age at which you retire, whether you’ll qualify for a traditional pension, the retirement lifestyle you envision, how long you’ll live and whether you’re able to manage your savings in retirement without depleting your assets too soon.
Still, you can get a quick sense of how you’re doing by going to a calculator like Fidelity’s Get Your Retirement Savings Factors. This tool helps you estimate how many times your annual salary you should have tucked away in retirement accounts at ages ranging from 30 to 67. What’s more, it can show you how much the amount you should have accumulated by a given age can vary depending on when you plan to retire and your expected lifestyle in retirement.
So let’s say that you’re 45, plan to retire at 65 and you would like to maintain your current lifestyle in retirement. Based on those and a host of other assumptions — including a 15%-of-salary savings rate, a retirement portfolio of which at least half is invested in stocks and that you’ll have income from Social Security but not a pension — the tool estimates that you should have six times your annual salary tucked away in retirement accounts at 45, nine times salary by age 55 and 12 times your yearly pay by the time you retire at 65.