Here’s a gut-check most people avoid until it’s late: pull up your retirement balance, then look at what the benchmarks say you “should” have by your age. The gap is often bigger than expected — and every year it goes unaddressed, it widens, because compound growth works against you when you’re behind just as powerfully as it works for you when you’re ahead.
The good news is that being behind is fixable at almost any age. Let’s look at the benchmarks that matter, how far behind is “too far,” and a catch-up plan that doesn’t require living on rice and beans.
The benchmarks (and why they exist)
Fidelity’s retirement savings milestones are the most widely cited, and they’re designed around one goal: replacing roughly 80% of your pre-retirement income so you don’t have to downgrade your life when you stop working. The multiples below are Fidelity’s published benchmarks; the dollar columns are simple arithmetic applied to three example salaries.
| Age | Savings target (Fidelity) | If you earn $50K | If you earn $75K | If you earn $100K |
|---|---|---|---|---|
| 25 | 0.5x salary | $25,000 | $37,500 | $50,000 |
| 30 | 1x salary | $50,000 | $75,000 | $100,000 |
| 35 | 2x salary | $100,000 | $150,000 | $200,000 |
| 40 | 3x salary | $150,000 | $225,000 | $300,000 |
| 45 | 4x salary | $200,000 | $300,000 | $400,000 |
| 50 | 6x salary | $300,000 | $450,000 | $600,000 |
| 55 | 7x salary | $350,000 | $525,000 | $700,000 |
| 60 | 8x salary | $400,000 | $600,000 | $800,000 |
| 67 | 10x salary | $500,000 | $750,000 | $1,000,000 |
Before you panic: these are targets, not pass/fail scores. Fidelity’s benchmarks assume you retire at 67, claim Social Security at 67, and maintain roughly your current lifestyle. If you plan to downsize, move somewhere cheaper, or work until 70, your numbers shift significantly.
They’re most useful as a gut check — a way to see whether you’re roughly on track or need to change something.
How people end up behind on a decent salary
The math is usually predictable. Consider a common pattern: someone contributes just enough to get the full employer match — say 4%, matched at 50% up to 4%, so 2% from the employer — from their late 20s into their mid-30s.
As a worked example, on a $60K average salary over seven years, that’s roughly $2,400/year from the worker and $1,200 from the employer, about $3,600/year. Over seven years that’s around $25,200 contributed, which market returns might lift to somewhere near $42,000. Not bad on paper — but if salary grew over those years, the benchmark (a multiple of salary) moved further away at the same time.
The problem usually isn’t doing something wrong. It’s doing the minimum. And the minimum isn’t designed to hit the benchmark — it’s designed to be easy to say yes to at 28, when retirement feels like a concept for other people.
What being behind actually costs you
This is the chart that tends to change behavior. The cost of starting late isn’t linear — it’s closer to exponential, because compound growth is exponential. The figures below are a hypothetical illustration at an assumed 8% average annual return; real returns vary and are not guaranteed.
In that example, starting five years late costs about $613,000 — not in extra contributions, but in lost growth. The actual difference in what you contribute between starting at 25 vs 30 is only $30,000 ($500/month × 60 months). Compound growth turns that $30,000 head start into roughly $613,000 by age 65.
That’s the math worth internalizing — and the reason to raise a contribution today rather than “next year.”
A realistic catch-up plan (not a miserable one)
Going from 4% to 20% overnight isn’t realistic for most people with rent, a car payment, and a life. Here’s a laddered approach that works better. These figures are an illustrative example based on a ~$66K salary.
Immediately: Bump your 401(k) from 4% to 8%. With a 2% employer match, that’s 10% total going in. On a $66K salary this reduces take-home by roughly $220/month — tight, but usually doable.
About six months later: Once you’ve adjusted to the lower take-home (most people miss it less than they expect), bump to 12% — another ~$130/month.
Around a year later: Open a Roth IRA and add, say, $250/month on top of the 401(k). This is the step that usually requires trimming spending — fewer restaurant meals, a cheaper gym, cancelling streaming services you don’t use. If freeing up that money is the hard part, a simple framework like the 50/30/20 budget rule is a good place to start.
Where that lands: 12% to the 401(k) + 2% employer match + $250/month to a Roth IRA works out to roughly $1,050/month toward retirement. From a starting balance around $42,000, a couple of years of that can push a balance near $98,000 — still behind the benchmark, but with the gap closing instead of widening.
The order that actually matters
A question that trips people up for years is whether to prioritize the 401(k), a Roth IRA, or something else. The order most experts converge on:
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401(k) up to the employer match — this is free money. A 50% match is an instant 50% return on that portion. Almost nothing beats it.
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Roth IRA up to the annual limit — tax-free growth and tax-free qualified withdrawals in retirement. You contribute after-tax dollars but never pay tax on the gains. The younger you are, the more valuable this tends to be. (The IRS sets the annual limits; for 2026 the Roth IRA limit is $7,500 — confirm the current figure at irs.gov.)
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Back to the 401(k) up to its annual limit — more tax-advantaged space, and pre-tax contributions reduce your taxable income now. (For 2026 the employee 401(k) limit is $24,500 per the IRS — again, confirm the current number, as limits change.)
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Taxable brokerage account — once you’ve maxed tax-advantaged accounts (most people never get here), invest in a regular brokerage with low-cost index funds.
Most people get stuck debating step 2 vs step 3. If you can’t do both, a Roth IRA often wins for people under 40, since you’re likely in a lower tax bracket now than in retirement. But the most important thing is simply putting money in somewhere — the exact split matters far less than the total amount. For the mechanics of choosing between the two, here’s a full comparison of 401(k) vs Roth IRA with worked numbers.
If you’re behind: the honest truth
No sugarcoating: if you’re 40 with nothing saved, you’re probably not retiring at 55 on a beach. But you can retire comfortably around 65-67 if you start now and get aggressive. The table below is a hypothetical based on an assumed 8% average annual return — returns vary and aren’t guaranteed.
| Current age | Current savings | Monthly investment needed to reach $750K by 67 |
|---|---|---|
| 25 | $0 | $300/month |
| 30 | $0 | $460/month |
| 35 | $0 | $700/month |
| 40 | $0 | $1,100/month |
| 45 | $0 | $1,800/month |
| 50 | $0 | $3,200/month |
(Assumes an 8% average annual return. $750K plus Social Security might cover roughly $50K-$60K/year in retirement spending, depending on your situation.)
The later you start, the steeper the hill — but none of those numbers are impossible for someone with a median income and real commitment. The $1,100/month at age 40 is roughly what many people already spend on a car loan plus a gym plus a few subscriptions. It’s a lifestyle adjustment, not a lifestyle sacrifice.
The one idea worth taking away
The money you save between 25 and 35 matters more than the money you save between 35 and 65. That sounds backwards, but the math backs it up: early dollars have the most time to compound, and compound growth doesn’t care about your salary or your stock-picking skill — only about time and consistency.
If you’re in your 20s and putting off retirement savings because you’re “too young” or “don’t earn enough,” start with whatever you can. As a hypothetical, even $100/month from 25 could grow to around $310,000 by 65 at an assumed 8% return — and with an employer match on top, it’s one of the best financial moves you can make in your 20s.
The fastest way to see what your own numbers turn into is to run them through our compound interest calculator — plug in a starting balance, a monthly contribution, a rate and a time horizon, and it shows the year-by-year growth so you can find the monthly figure that closes your gap.
This is general information, not personalised financial advice. Benchmark multiples are Fidelity’s; growth figures marked illustrative or hypothetical assume a fixed average return and are not guarantees. Confirm current contribution limits at irs.gov and consider your own circumstances (or a licensed advisor) before deciding.