Are you behind or ahead of the average?
When it comes to your finances, everything is relative. Many people need a specific savings method to grow their savings, while others are more liberal and spontaneous with their income.
The problem with most financial advice is that it assumes everyone has the same starting point, income trajectory, and life circumstances. It doesn’t account for people who need to pay for college, help family members, or simply figure out what they want to do with their lives before they can focus seriously on saving.
But having some kind of roadmap is still valuable, even if it’s just a reference point rather than a strict rule. It helps you understand whether you’re generally on track or if you need to make some adjustments to reach your long-term financial goals.
So I decided to calculate realistic savings benchmarks based on a specific retirement target: reaching $1 million by age 60. This isn’t necessarily the right number for everyone, but it provides a concrete framework for understanding how much you should ideally have saved at different stages of your life.
And here I will show you how much you should have saved based on your current age if you want to retire as a millionaire, so you can adjust your current method (or not worry at all).
How much you should have saved at every age milestone.
To create these benchmarks, I used a specific target: having $1 million saved by age 60, assuming a 5% annual return on investments and consistent monthly savings of $600. This formula accounts for compound interest, which means your money grows not just from your contributions but from the returns on your previous savings.
Where:
- FV = the future value of the series of payments.
- P = the monthly payment (the amount you save each month; in this case, I used an average of 650).
- r = the annual interest rate (5% or 0.05).
- n = the number of compounding periods per year (12 for monthly).
- t = the total number of years.
This is the result of how much you should have saved by age:
These numbers assume you’re saving $600 every month starting at age 18 and earning a consistent 5% return. The progression shows how compound interest accelerates your wealth building over time. Notice how the jumps get bigger as you get older because you’re earning returns not just on your monthly contributions but on all the growth from previous years.
From there, all you need to do is keep saving $600 each month to reach a million by your 60s. Naturally, starting sooner makes hitting your annual savings goal simpler, but it’s still possible to become a millionaire even if you didn’t start saving at 18.
You can catch up even if you’re “behind” the average.
The reality about saving money is that you can start whenever you want and still achieve the same results as those who started earlier. It will cost you more monthly to reach certain numbers, but that doesn’t mean it’s impossible.
For many people, it’s actually easier.
As I’ve grown and matured, I’ve realized that saving becomes easier as we age. Many financial books tell you that you must start saving $500 from age 18 if you want to be a millionaire one day. However, this is unrealistic, especially for people from the middle class who have other priorities when they start working.
When I was in my early 20s, one of my worries was that I couldn’t save enough because I had to pay for college and wanted a vehicle. Now that I don’t have many big commitments, I’ve realized how easy it has been to catch up with those benchmark numbers because I can save more than $600 now.
So don’t worry if you don’t have $32,000 at 22. Most people your age don’t even have $5,000.
For example, from 18 to 22, I was only able to save $8,000. I was missing $24,325 from the benchmark. However, that year I finished my software engineering degree and started working at a job paying $45,000. My fixed expenses were around $1,000 a month since I was still living with my parents and had no loans or major responsibilities, so I could catch up on the missing savings in two years.
Not everyone has that privilege, but it demonstrates that you can start with zero at any point in your life and still end up in the same position as those who started saving early. The key is understanding how much you need to catch up and creating a plan to get there.
What matters now is your mindset after learning what you need to achieve financial freedom and how you’ll plan everything from now on to get ahead.
What to do if you’re missing your savings target.
If you don’t have the amount of money these benchmarks suggest for your age and you want to reach $1 million by 60, you need to figure out how much you’re missing and how much time it will take you to catch up with your current savings plan.
The first step is doing the math. Calculate the gap between where you are now and where the benchmark says you should be. Then determine how much extra you need to save monthly to close that gap while still staying on track for your retirement goal.
For example, if you’re 30 and have only $20,000 saved instead of the target $99,840, you’re about $80,000 behind. To catch up and still reach $1 million by 60, you’d need to save approximately $900 per month instead of $600.
Review your budget and see how much you can realistically increase your savings without completely sacrificing your current lifestyle. Look at your expenses and identify areas where you can cut back, but also consider ways to increase your income rather than just reducing spending.
This might mean taking on freelance work, starting a side business, selling items you no longer need, or investing in skills that could lead to a higher-paying job. It’s often easier to save more when you’re earning more rather than trying to squeeze every penny out of your existing salary.
You can also consider adjusting your investment strategy. If you can achieve a 7% return instead of 5% through different investment choices, you won’t need to save as much monthly to reach the same goal. However, higher returns usually come with higher risk, so make sure you understand what you’re getting into.
Remember that these calculations assume you want exactly $1 million by age 60. You might decide that $800,000 is sufficient for your lifestyle, or that working until 65 is acceptable if it means less aggressive saving now. Adjust the targets based on what actually makes sense for your life and goals.