Experts Say You Should Have 10X Your Salary Saved for Retirement by 67. Here's How to Get There

Wouldn't it be great if there were some sort of magic number that guaranteed financial security throughout retirement? That way, we'd all know exactly how much to save, and from there, we'd get peace of mind.

A recent Northwestern Mutual survey found that Americans landed on $1.46 million as that magic number of sorts. But that doesn't mean you need $1.46 million to retire comfortably, or that saving that much is attainable given your income. 

Also, while $1.46 million may be more than what some people need to live a nice lifestyle in retirement, for others, it may not be enough. So rather than rely on a single number like that, you may want to use Fidelity's rule for retirement planning. The financial giant says you should aim to have 10-times your final salary socked away in an IRA or 401(k) by the age of 67, which is when people born in 1960 or later can claim their Social Security benefits in full. 

What's great about Fidelity's advice is that it's based on individual earnings. If your ending salary is $70,000, you're aiming for a $700,000 nest egg, which may be what you need based on the paycheck you're used to collecting. If your final salary is $150,000, then you're aiming for $1.5 million -- though you might not need quite that much, depending on your lifestyle.

Either way, though, the idea of accumulating 10-times your salary might seem challenging. But with the right strategy, you may be surprised at how easy it is to hit that goal.

Start young and invest in stocks

Retiring with 10-times your salary could boil down to simply giving yourself a long savings window and investing heavily in stocks. 

If you wait until your 40s or 50s to start contributing toward retirement, you may not get to that goal -- or you might have to part with a lot of money each month to get there. And if you choose safer investments than stocks, your money may not grow at a fast enough pace to get you to your goal. 

But if you begin funding an IRA or 401(k) in your 20s and you invest the bulk of your savings in stocks from the start, you might easily end up with 10-times your salary by age 67. And you might also get there without having to give up a large chunk of your paycheck every month.

Over the past 50 years, the stock market's average annual return has been 10%. So let's say you contribute $100 a month to a retirement plan between ages 25 and 67 for a total of 42 years. If you're able to score a 10% yearly return in your portfolio during that time, you're looking at a total of about $645,000.

Meanwhile, a typical annual wage for someone aged 67 is about $55,000, according to the Bureau of Labor Statistics. If we apply Fidelity's rule, that means our savings target would be $550,000. Here, you're getting to almost $100,000 more on just $100 a month. 

Consider your personal goals and expenses when setting a retirement savings goal

Fidelity's rule of thumb is a good one to follow if you want some guidance on setting a retirement savings goal. But you can also adjust that guidance based on your needs and objectives.

If you want your retirement to be filled with travel, you may decide you should aim to save 12- or 13- times your salary. If you intend to downsize your home and live frugally, then eight-times your final salary may be more than enough.

It could pay to sit down with a financial advisor and have them help you establish a savings goal that's truly unique to you. This could make it so you're not putting undue pressure on yourself to oversave, but you're also less likely to wind up with an income shortfall on your hands.