The number depends on what you spend and what you earn.
Age 45 is an interesting one. You're maybe a bit too old to be staying out till 3:00 a.m. with your buddies, but you're probably not quite ready to start meeting up for dinner at 5:30 p.m. so you can make sure you're in bed by 9:00 p.m.
Age 45 is also an important one financially. At this point, you're probably halfway through your career, which means retirement should be on your radar. And if you have kids, you may be starting to think about (or worry about) paying for college.
So how much savings should you have by age 45? It depends on how much you spend each month and how much you earn each year.
What your savings account balance should look like by age 45
As a general rule, you should have a robust enough emergency fund to cover a full three months of bills. But you may want to aim higher.
See, the point of having enough money in your savings account to pay for three months of expenses is to get you through a period of unemployment (and also, to cover other unexpected expenses that might arise). But by age 45, you probably won't want to take any old job if you lose yours. Rather, you might have specific needs. And you'll want the flexibility to spend more time looking if the right fit doesn't materialize within three months.
That's why having enough savings to cover six months' worth of essential bills is really a better bet by age 45. It could take the pressure off if you're let go at work, or if major home repairs start to pop up as your house ages.
What your retirement plan balance should look like by age 45
If you're 45 years old, retirement isn't exactly right around the corner. But it's also not so far away. And so at this point, you should ideally have a decent chunk of money saved up in an IRA or 401(k).
Fidelity says that by age 40, you should aim to have three times your salary socked away for retirement, and by age 50, you should aim to have six times your salary. So if we meet those figures down the middle, it means that by age 45, you should ideally have 4.5 times your salary set aside for retirement. If you earn $90,000 a year, it means you're in good shape if you have $405,000.
That said, many people's retirement plans lost money in 2022 due to stock market volatility. So if you had 4.5 times your salary before the market took a dive, but you have a lower balance now, don't worry -- you're still in good shape, and once the market rebounds, your balance might climb back up.
What to do if you're behind on savings
Whether you're behind on regular savings, retirement savings, or both, it may be time to make some lifestyle changes. That could mean taking a closer look at your spending and finding ways to cut back on non-essential expenses, like takeout meals and subscriptions. Along these lines, if you commonly take a vacation every year that costs your family $5,000, you may want to opt for a staycation for the next few years and bank that money instead.
By age 45, you should be in a good place with regard to both emergency and retirement savings. If that's not the case, all definitely isn't lost. But it is time to get serious about buckling down and make savings your priority.
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FAQs
As a general rule of thumb, you'll want to have saved three to eight times your annual salary, depending on your age: 40: At least three times your salary. 45: Around four times your salary. 50: Six times your salary.
How much should a 45 year old have in savings? ›
Savings Benchmarks by Age—As a Multiple of Income
| Investor's Age | Savings Benchmarks |
|---|
| 40 | 1.5x to 2.5x salary saved today |
| 45 | 2.5x to 4x salary saved today |
| 50 | 3.5x to 6x salary saved today |
| 55 | 4.5x to 8x salary saved today |
4 more rowsMay 29, 2024
Average net worth by age
| Age of head of family | Median net worth | Average net worth |
|---|
| Less than 35 | $39,000 | $183,500 |
| 35-44 | $135,600 | $549,600 |
| 45-54 | $247,200 | $975,800 |
| 55-64 | $364,500 | $1,566,900 |
2 more rowsMay 29, 2024
By age 40, you should have three times your annual salary already saved. By age 50, you should have six times your salary in an account. By age 60, you should have eight times your salary working for you. By age 67, your total savings total goal is 10 times the amount of your current annual salary.
How much money do you need in the bank to retire at 45? ›
Someone between the ages of 41 and 45 should have 2.8 times their current salary saved for retirement. Someone between the ages of 46 and 50 should have 3.9 times their current salary saved for retirement. Someone between the ages of 51 and 55 should have 5.3 times their current salary saved for retirement.
Where should I be financially at 45? ›
Rowe Price addressed retirement adequacy in a 2024 study that suggested a typical person should have 2.5 times to 4 times their salary saved by age 45. The assumptions used in this analysis were typical of conventional financial planning benchmarks, including: Retiring at age 65. Saving in a tax-deferred retirement ...
How much cash should you have at 45? ›
As a general rule of thumb, you'll want to have saved three to eight times your annual salary, depending on your age: 40: At least three times your salary. 45: Around four times your salary. 50: Six times your salary.
What is the average income for a 45 year old? ›
Average Salary by Age (3rd Quarter of 2023)
| Age Group | Average Salary |
|---|
| 25-34 | $54,080 |
| 35-44 | $65,676 |
| 45-54 | $66,144 |
| 55-64 | $63,544 |
3 more rowsDec 11, 2023
If making investments that yield a 3% yearly return, a 45-year-old would have to invest $3,100 per month to reach $1 million by age 65. If they instead contribute to investments that give a 6% yearly return, they would have to invest $2,200 per month for 20 years to end up with $1 million.
Is 3 million at 45 good? ›
You can probably retire in financial comfort at age 45 if you have $3 million in savings. Although it's much younger than most people retire, that much money can likely generate adequate income for as long as you live.
Can I Retire at 62? You can retire a little early on $400,000, but it won't be easy. If you have the option of working and saving for a few more years, it will give you a significantly more comfortable retirement.
Is it a good idea to retire at 45? ›
Many Americans plan to retire early, before the proverbial age of 65. Pros of retiring early include health benefits, opportunities to travel, and starting a new career or business venture. Cons of retiring early include a strain on savings, and a depressing effect on mental health.
Can I retire at 50 with 300k? ›
With $300,000 planned for your use as a retiree, a retirement age of 50, and an anticipated life expectancy of 85 years, you need that money to last you 35 years. This should mean that your yearly income is around $8,571, and your monthly payment is around $714.
How much savings do most 45 year olds have? ›
Average retirement savings balance by age
| Age group | Average retirement savings balance amount |
|---|
| Under 35 | $49,130. |
| 35-44 | $141,520. |
| 45-54 | $313,220. |
| 55-64 | $537,560. |
3 more rowsMay 7, 2024
You can stop working before your full retirement age and receive reduced benefits. The earliest age you can start receiving retirement benefits is age 62. If you file for benefits when you reach full retirement age, you will receive full retirement benefits.
Is 45 too late to start saving for retirement? ›
Although it's important to start your retirement planning and saving early, you can still fulfill your goals even if you're between 45 and 54. Small business owners may be able to stash extra savings by funding retirement accounts designed for small businesses and the self-employed.
How much money does an average 45 year old have? ›
Read on to understand more. According to CNN Money in 2021, the average net worth for the following ages are: $9,000 for ages 25-34, $52,000 for ages 35-44, $100,000 for ages 45-54, $180,000 for ages 55-64, and $232,000+ for 65+.
How many people have $1,000,000 in savings? ›
In fact, statistically, just 10% of Americans have saved $1 million or more for retirement. Don't feel like a failure if your nest egg isn't quite up to the seven-figure level. Regardless of your financial position, however, you should strive to save and invest as much as you can.
How much does the average middle class person have in savings? ›
The average American has $65,100 in savings — excluding retirement assets — according to Northwestern Mutual's 2023 Planning & Progress Study. That's a 5% increase over the $62,000 reported in 2022.
