Experts Say You Should Have 6X Your Salary Saved for Retirement by Age 50. Here’s How to Get There

By age 50, retirement is something you need to start thinking about seriously. If you're hoping for an early retirement, you may only have another 10 years or so left to work and save. Even if you intend to retire in your mid to late 60s, it's still important to have a decent savings cushion by the time your 50th birthday rolls around.

What does that mean? If you ask Fidelity, it means having six-times your salary socked away by that point.  

The median annual salary among people aged 50 is $66,300, per the Bureau of Labor Statistics. So if we follow Fidelity's guidelines, the typical worker should have $397,800 saved by 50. 

That's a large number. But getting there may be easier than expected. 

Start early and harness the power of the stock market

It's not easy to save almost $400,000 in an IRA or 401(k) over eight or 10 years. But many people graduate college and begin working full-time at 21 or 22. 

That means you may have a roughly 28-year opportunity to build up a nice-sized nest egg by 50. And if you begin saving for retirement as soon as you start a full-time career, you may be surprised at how much wealth you can accumulate by 50. 

But saving alone isn't enough. You also have to be willing to invest your money so it grows into a larger sum over time. 

Over the past 50 years, the stock market has rewarded investors with an average yearly 10% return. That return accounts for years of great performance and years when the market did poorly.

So let's say you save and invest $250 a month for retirement from ages 22 through 50 in a portfolio that gives you a 10% annual return during that time. You could end up with about $402,600, which is right where you want to be if you earn an average wage and want six-times your income on hand at that point in life.

What if you don't have enough savings by age 50?

Northwestern Mutual reports that the average Gen Xer has $108,600 saved for retirement. That's a decent sum, but it's not six-times the typical wage for people in that age group.

If you feel you're behind on retirement savings at age 50, there are a few things you can do. First, examine your spending and try to carve out room for higher retirement plan contributions. The good thing about turning 50 is that you're newly eligible for catch-up contributions in an IRA or 401(k), allowing you to put in more money each year than your younger counterparts. 

Secondly, you may want to consider joining the gig economy to give your savings a lift. The earnings from a second job could go right into your IRA or 401(k), allowing you to make good progress.

Continue to invest in stocks during your 50s, especially if you're not planning on an early retirement. You'll often hear that it's good to start scaling back on stocks as retirement nears, but that doesn't mean to stop investing in them a decade or more beforehand. 

All told, all isn't lost if you don't have six-times your salary saved by age 50. But you should also know that starting early and going heavy on stocks from the start is probably a good way to get the job done.