Experts Say You Should Have 3X Your Salary Saved for Retirement by 40. Here's How to Get There

The idea of being able to retire on Social Security alone is a big myth. Most retirees need about 70% to 80% of their former income to live comfortably, and Social Security will only provide about 40% replacement income for average wage-earners. This assumes, of course, that those benefits aren't slashed from their current levels.

That's why it's so important to save for retirement independently. Ideally, you should aim to kick off your golden years with enough money to have Social Security serve as a supplement to the withdrawals you take from your nest egg.

But saving for retirement is a process -- one that may have to occur throughout your career. So it may help you to know what milestones you should be aiming for along the way.

Let's be clear that there are no hard and fast rules. The amount of savings you'll need in retirement will depend on the lifestyle you want to lead.

But Fidelity suggests having three times your salary saved by age 40. If you hit that mark, you may be able to approach retirement with more confidence as you near the midpoint of your career.

At first, saving three times your salary by 40 might seem impossible. But with the right approach, it can be done.

Your path to three times your income by 40

If your goal is to save three times your salary by age 40, you should plan on doing two things:

1. Start funding an IRA or 401(k) as soon as you start earning a steady paycheck
2. Invest your savings in the stock market, whether by buying stocks individually or buying shares of an S&P 500 index fund

Let's take a closer look at why these two tactics are so important. The median weekly wage for people in their 40s today is about $1,300, says the Bureau of Labor Statistics, which translates to about $67,600 per year. That gives you a retirement savings goal of about $203,000 by age 40. Of course, your salary may be much different, but we'll use this as our example.

If you start saving $370 a month at age 22 and do so for 18 years, you'll have about $203,000 by 40 if your portfolio generates an average annual 10% return during that time, which is consistent with the stock market's average return over the past 50 years. But if you wait longer to start saving or invest conservatively for a lower return, you may not hit that goal.

Let's say you start saving for retirement at 30. Even if you were to put in $500 a month at that point and score that 10% return, you'd only have about $96,000.

Similarly, let's say you save $500 a month from ages 22 through 40, but you invest conservatively and only score a 5% return in your IRA or 401(k) during that time. That leaves you with about $169,000, which is respectable, but still $34,000 shy of your goal.

Set yourself up for success

It won't necessarily be easy to save three times your salary by age 40. But it can be done. And with the right strategy, that goal should be much easier to meet.

Start off by automating an IRA or 401(k) contribution as soon as you start working full-time. It's amazing how easy it is to stay on track with funding one of these plans if you do so from the start, so you're never even giving yourself access to your paycheck in full.

Next, figure out how to get comfortable with stock investing. That could mean working with an advisor to build a portfolio, or it could mean putting your money into S&P 500 index funds, which basically have you investing in the 500 or so largest stocks in the market. You may find the second approach more suitable if you don't know much about investing and aren't super eager to learn.

Remember, if you're scared of putting money into the stock market because it tends to be volatile, the 10% return used multiple times above represents an overall return. There were plenty of market downturns over the past 50 years, but the stock market has a strong history of recovery. And if you begin saving for retirement at a super young age, you'll give yourself plenty of time to ride out periods of turbulence.