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Are You on Track to Meet Your Retirement Goals?

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Net Worth Goals By Age

Do you find yourself wondering if you’re on track to meet your retirement goals? Are you saving diligently but still unsure whether it’s enough? A valuable benchmark to help you answer these questions is your net worth: that is, the number you’re left with when you add up your cash and other financial assets and subtract all your debts.

When it comes to net worth, it can be tempting to compare yourself to friends and family, but their habits aren’t necessarily good measures of your own financial footing. Instead, take a look at the net worth targets below that reflect where you should be based on your age and amount of income saved.

In Your 20s: Take Small, Meaningful Steps

When you’re just starting out in the working world, you don’t need to be overly concerned with net worth. In fact, you may be paying off student loans and carrying a negative net worth – and that’s okay!

Instead of focusing on the negative, take small steps that will have a big impact on your future net worth. For instance, if your company offers a retirement savings plan, take advantage of it. These often come in the form of a 401(k) or a 403(b) but, in their absence, you can also open your own Roth IRA retirement account. Each of these types of accounts makes it easy to save and invest, and your money will grow and compound until you’re ready to retire.


Set up an automatic transfer so that at least six percent of your monthly salary goes into your retirement account – 10 percent is ideal – and adjust your asset mix so that you’re investing largely in stocks.

In Your 30s: Hit Your First Net Worth Goal

When you reach age 30, your goal should be to have saved approximately half your annual salary in your retirement account. For example, if you spent your twenties making $60,000 annually, you’ll want to have about $30,000 saved by the time you hit 30. This might seem like a lot but remember: you aren’t simply saving $30,000, you’re earning some of that through smart investing, too.

To make it less daunting, consider this: if you started investing $288 per month ($3,466 per year) at age 23, and your investments average 7 percent in returns each year, you’ll have $30,000 in your retirement account when you reach age 30.


Don’t fret if you haven’t met your age 30 net worth goal. Do the math to determine a monthly savings plan that will get you there by age 35, then put that plan into practice. If you’re able, take on a side hustle for a few years to help increase your net worth.

In Your 40s: Up Your Game with Real Estate

By the time you reach age 40, prevailing wisdom says you should have a net worth equal to about twice your annual salary. Hopefully, you climbed the salary ladder a bit in your 30s, too. If you’re making $80,000 annually, your goal should be to have a net worth of $160,000 at age 40.


Let’s say you’re working in a profession where pay bumps are hard to come by, or you simply haven’t been able to invest as much cash as you’d like to into your retirement account. A smart move may be to invest in real estate to help increase your net worth. Like many other types of assets, real estate will appreciate over time and offer you an alternative path for growing your net worth. Think of it this way: making a small down payment on a home will pay big dividends in the future as the value of your property increases over time.

In Your 50s: Watch the Compounding Magic Happen

When you reach age 50, your goal should be to have a net worth that is four times your annual salary. For example, if you were earning $100,000 throughout your forties, your target net worth goal should be $400,000. This sounds daunting, but consider the magic of compound interest. If you began investing in your twenties, you’ve been earning returns on the money you’ve invested for thirty years – and you’ve also earned returns on those returns. If you started saving a bit later, there’s still time to begin saving more aggressively now.


Your retirement may be just a decade or so away, meaning it’s time to seriously take stock of the kind of retirement you want to have – and whether you’re on track to achieve it. Hitting recommended net worth milestones are great, but it still may not allow you to plan the retirement of your dreams. Get serious about planning and make changes in your asset mix and savings plan to ensure you’ll meet your personal retirement goals.

In Your 60s: Keep Your Eye on the Ball

Once you’ve reached age 60, your net worth should be roughly equal to six times your annual salary. Simply multiply your salary by six and you’ll have your net worth target. However, it’s important to remember that the general recommended targets may not be in line with what your retirement needs will be. Your lifestyle, zip code, and retirement travel plans all play a role in determining what your personal net worth benchmark should be at this age.


Ensure your retirement income will be about 85 percent of the amount you earned while working. If you’re looking forward to a quiet retirement, you may not need that much. If you’re planning to travel the globe, you may need more. At any rate, this rule of thumb is a good place to start, so make sure you have your ducks in a row so there are no surprise dips in your income once you leave the working world behind.

Breaking down your target net worth goals into manageable steps is a useful way to ensure your retirement plans remain steadily on track throughout each decade of your working life.

Paces Ferry Wealth Advisors, LLC is a registered investment advisor with the U.S. Securities and Exchange Commission (“SEC”).  This material is intended for informational purposes only. It should not be construed as legal or tax advice and is not intended to replace the advice of a qualified attorney or tax advisor.