If you plan to retire at 60, you’ll need a clear picture of your future expenses and a solid plan. Because 60 is earlier than most benefit eligibility ages, you’ll need extra savings to cover the gap. The amount needed varies significantly based on your lifestyle expectations, health considerations and location. Some experts suggest saving eight to 10 times your salary by age 60, but your needs may vary.
A financial advisor with retirement planning expertise can help you make a long-term plan that accounts for your needs and goals.
How to Calculate How Much You Need to Save for Retirement
There are multiple ways to calculate how much you need to save for the retirement you want. Experts will suggest certain thresholds for savings accounts, but you can also estimate your own savings based on how much money you think you’ll spend during retirement.
Start with the 4% rule to estimate how much you’ll need for retirement. This guideline suggests you can withdraw 4% of your retirement savings in your first year of retirement and then adjust your annual withdrawals for inflation to preserve purchasing power. For example, if you expect to spend $60,000 during your first year of retirement, you’ll need to have $1.5 million in savings.
Another calculation method involves using income replacement ratios. Many financial planners recommend replacing 70–80% of your pre-retirement income. So if you have $100,000 in annual income, you’ll want between $70,000 and $80,000 in retirement income.
A retirement calculator can also provide more personalized projections. These tools account for inflation, investment returns, Social Security benefits and other variables specific to your situation.
How Much Retirees Save by Age 60 on Average
The Federal Reserve’s Survey of Consumer Finances shows that Americans aged 55-64 have median retirement savings of approximately $185,000. However, this figure varies widely across income levels, with higher earners typically accumulating substantially more.
Fidelity Investments suggests that by age 60, individuals should have about eight times their annual salary saved for retirement. For someone earning $70,000 annually, this translates to roughly $600,000 in retirement accounts. Yet, many Americans fall short of these benchmarks. More than a fifth of workers had less than $10,000 in retirement savings in 2024, according to the Employee Benefits Research Institute. Meanwhile, 29% of workers had less than $25,000 saved for retirement.
A 2024 Gallup survey found that 79% of people between ages 65 and 80 feel like they have enough to live comfortably. That figure is higher among Americans with multiple sources of income, including pensions and 401(k) accounts. Retirement account balances often differ by type, making it important to have a diversified investment portfolio.
Factors That Impact How Much You May Need to Save
Healthcare costs are one of the most significant considerations of retiring at 60. Without Medicare eligibility until age 65, early retirees must budget for private health insurance, which can cost thousands per month. Long-term care expenses, which Medicare doesn’t fully cover, may require additional savings.
Where and how you live directly affects how much you need in retirement. Those with paid-off mortgages typically require less income than those still making housing payments or paying rent. Similarly, downsizing or relocating to a lower-cost area can substantially reduce the savings needed for retirement.
Travel plans, hobbies and entertainment preferences also impact your financial requirements. Someone planning extensive international travel will need considerably more savings than someone with simpler lifestyle goals.
Longevity risk must be factored into retirement planning. With life expectancies increasing, many retirees need to fund 30+ years of retirement. Family health history and personal health status can help estimate your planning horizon and potential healthcare expenses.
Inflation erodes purchasing power over time. Over 30 years, even 2–3% annual inflation can reduce your savings’ buying power. Investment strategies that account for inflation protection become increasingly important for those retiring early.
How to Save More for Retirement
There are a number of things you can do to maximize your retirement savings. For example, earning from side gigs, rental income or part-time jobs can give you more to invest. These additional income sources can also continue into retirement, reducing the pressure on your investment portfolio.
Reducing current expenses allows for increased savings rates. Reviewing subscriptions, refinancing high-interest debt and optimizing tax strategies can free up significant amounts to redirect toward retirement accounts. Even small monthly savings can compound substantially over time.
Working just a few extra years can significantly improve your financial security. Working longer provides additional time to save while reducing the number of years your savings must support you. It can also maximize Social Security benefits, which grow approximately 8% annually for each year you delay claiming between full retirement age and 70.
Bottom Line
Determining how much money you need to retire at age 60 depends on numerous personal factors including lifestyle expectations, health considerations and geographic location. While general guidelines suggest having eight to 10 times your annual salary saved by this age, your specific situation may require adjustments to this target. Taking time to calculate your unique retirement needs, understanding how your savings compare to averages and addressing the factors that impact your financial requirements can help create a realistic plan.
Tips for Retirement Savings
- A financial advisor can help align your retirement strategy with your long-term goals, income needs and risk tolerance. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- A clear goal makes planning easier. SmartAsset’s retirement calculator helps estimate how much you’ll need based on your current savings, expected income, and desired lifestyle. It can show whether you’re on track or need to adjust your contributions, retirement age or investment strategy.
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