If you’re around 60 years old, you may be wondering, “How much should I have saved for retirement by age 60?” After all, by age 60 you are likely either ready to retire or getting close.

The truth is, there is no easy answer to this question. The amount you should have saved by age 60 will depend on your current lifestyle and the lifestyle you want to live in retirement.

True financial freedom in retirement means you can enjoy the life you want to live free from worry or anxiety about money. So how much money does a 60-year-old person need to enjoy retirement and achieve true financial independence?

Let’s explore that – but first, let’s take a look at how much money the average 60-year-old person actually has saved.

A hand putting a coin into a blue piggybank. A blackboard says "retirement" in chalk writing behind it. Average 60-year Old Have Saved for Retirement?

How Much Money Does the Average 60-Year-Old Have Saved for Retirement?

Here’s a scary statistic about having enough saved for retirement: About half of all American households have no retirement savings. At all. That comes to about 40 million households. It’s hard to imagine how someone can retire without having any retirement savings.

And it’s hard to get by on just Social Security alone. After all, the average monthly social security benefit for retirees is $1,658. This is like having a minimum wage job.

Furthermore, around 29% of households age 55 and over have no retirement savings. Which means that the problem is not limited to just younger people.

In 2016, the median retirement account balance of people who actually have retirement accounts was about $60,000. However, the median increases by age. The median account balance for someone in the range of 55 to 64 was $104,000.

Also, this looks at just retirement accounts. The number is higher if you take into account total household net worth. For the same age range, the average household net worth is $187,300.

When you take all this data together, the picture becomes clear that the average 60-year-old does not have nearly enough money saved for retirement.

How Much Money Should You Have Saved?

Since it’s clear that the average age 60-year old person does not have enough money saved for retirement, let’s dig in to how much you should actually have saved.

Different financial professionals offer different ways to calculate how much money you should have saved for retirement.

One way to figure out how much people need to save for retirement is simply to ask those people how much they think they need. A study by Charles Schwab did precisely that.

The outcome of that study revealed that people think they need about $1.7 million in savings to retire comfortably. If you compare that to the average household net worth in the previous section, you can see how far off people are versus where they think they should be.

Fidelity argues that by the age of 60, you should have 8X your annual income saved for retirement. So if you earn an average of $100,000 per year in income, you should have 8 x $100,000 saved by age 60. Which comes out to $800,000.

Again, what is clear from the data is that most people simply do not have enough money saved to retire comfortably. This is a major problem. But perhaps we can use a mindset shift to change the way we think about this and then change our behavior.

Saving vs. Investing for Retirement

The previously mentioned Schwab survey points out that most people think of themselves as saving for retirement. At Investment U, we believe that this is actually the wrong way to think about it.

The right way to think about it is to look at yourself as investing in your retirement. Because the large majority of your retirement “savings” is not going to come from squirreling away portions of your income in a bank savings account.

It’s going to come from investing.

And when I say investing, I mean in a variety of different assets and accounts. After all, investing doesn’t just mean day-trading stocks – although that certainly counts, too.

If you have a 401(k), you are an investor. Same if you have an IRA. Or a small Robinhood account. You may be investing in stocks. Bonds. Gold. Pork bellies. Art.

But the basic point remains the same: The way you are going to have enough money to retire is not merely by saving money, but by investing. Investing with knowledge, insight and wisdom.

The Real Answer to the Question Depends on You

The true answer to how much you need to save by age 60 in order to be able to retire depends on what you want out of your retirement. It is dependent on both your current lifestyle and the lifestyle you want to live while retired.

In order to determine this, you really need to take a hard look at your retirement financial goals. After all, there are a wide number of things you could use your money for in retirement. Here are some ideas:

  • Buy your dream retirement home
  • Travel the world
  • Build an expensive fine wine collection
  • Leave legacy money to your grandchildren
  • Contribute to your favorite charity every month.

Really, the possibilities for a happy and fulfilling retirement are endless. And money is freedom. The more wealth you are able to build for your retirement, the more real possibilities you have.

Once you know what your goals are, you can start truly planning for how to achieve them. This will involve calculating how much income you need to earn after you retire from you career.

How to Invest for Retirement

It’s never too late to begin or continue investing for your dream retirement even by age 60. It starts with the right mindset that you are willing to put in the work.

Many people are scared to get started investing. This is true at any age. The whole idea of investing can be scary and overwhelming. And I can’t say I blame you.

After all, it’s difficult to trust Wall Street professionals. They all have agendas of their own. Often, they are not advising you on the best possible investments. But instead, they are offering you the investments that make sense for them and their firm.

And they often do so while charging you exorbitant fees.

On the other hand, going it completely alone is difficult. There’s a lot you need to know about investing to do so successfully. It’s easy to make mistakes. And oftentimes, the common or conventional wisdom is wrong.

For example, you may think that by age 60 you should have very little money in stocks. But the truth of how much money you should have in stocks by age 60 is quite different now than it was even 20 years ago.

So how can you get started with wise investing today?

How to Save More Money for Retirement

It may be worthwhile to increase your retirement savings, no matter where you are on your journey. During the last few years of your working career, how can you save more for retirement? Here’s a few options…

  • Max out your 401(k) contribution if you can afford to. This is especially important if your employer matches it.
  • Invest in a traditional individual retirement account (IRA) or Roth IRA. You may be eligible to deduct your contribution to a traditional IRA. You cannot deduct Roth IRA contributions, but you can withdraw them tax-free later in retirement.
  • Invest in a retirement lifestyle today. You may have a more simple lifestyle than you did before. Empty nester? Downsizing your home? If so, you can consider the benefits. Your home sale can give you the funds to add to your retirement savings now. It can also reduce or eliminate mortgage payments that you can instead put into retirement savings. Furthermore, if you move to a smaller home with fewer things to maintain, you can start a less-work intensive lifestyle.
  • Find a second career. Do you find it more appealing to work part-time or provide consulting services instead of full-time employment? Would you consider working for a lower salary if you enjoyed another kind of work? The difference between your current job and no job at all can be bridged by a second career.

There’s several other ways to save money for retirement. You still have more time to save, adjust your expectations and find new opportunities.

Concluding Thoughts on Wise Investing

The truth is, the choice between trusting an untrustworthy financial advisor from Wall Street or going it completely alone is a false choice. No matter how much money you have saved by age 60 for your retirement, there’s a better way to determine how to grow it from here.

The way to do that is to follow the wisdom of non-Wall Street experts who have your best interests at heart. People with the experience, know-how and will to truly guide you in making the best investing decisions for you.

Whether you’re just starting your retirement savings journey – or rather, retirement investing journey – at age 60 or you’re a veteran stock trader, our experts have clear insights and actionable wisdom to offer you each and every day.

And before you know it, you’ll be on your way to living the retirement of your dreams.