WhatBy age 55, many experts recommend having at least 8-10 times your annual income saved in a 401(k) or similar retirement account to maintain a comfortable lifestyle in retirement.
WhyThis amount is based on the assumption that you'll need to replace 70-80% of your pre-retirement income to cover living expenses, and that Social Security benefits will only cover a portion of those costs.
SignalHaving a smaller 401(k) balance by age 55 may indicate a need to adjust your savings strategy, potentially by increasing contributions or exploring other investment options.
TargetTo reach this goal, consider contributing at least 15% of your income to your 401(k) and taking advantage of catch-up contributions if available, especially if you start saving later in life.
RiskFailing to save enough in your 401(k) by age 55 can lead to a reduced standard of living in retirement, increased reliance on Social Security benefits, and a higher risk of outliving your assets.