Experts Say You Should Have 8X Your Salary Saved for Retirement by 60. Here's How to Get There

It's hard to focus on saving for retirement when you're in your 20s, 30s, and even 40s. At those ages, retirement may be decades away, and you likely have pressing expenses to deal with.

But by age 60, you should be thinking seriously about retirement -- especially since it may be coming up quickly. You'll also, ideally, want a nice amount of savings to your name by age 60, since you may not have that many years of full-time work left ahead of you.

Fidelity says you should aim to have eight-times your salary saved for retirement by 60. A typical salary for someone that age is about $64,700, per the Bureau of Labor Statistics. So that means you'd be aiming for a $517,600 IRA or 401(k) by 60 if you earn a pretty average wage. 

Saving a sum that large may seem daunting. But with the right strategy, you may be surprised at how easily you can get there. 

It's a matter of time and the right investment approach

If you want to have eight-times your salary saved by age 60, you should do two things:

1. Start saving and investing as soon as possible
2. Invest heavily in stocks for maximum growth potential

If you wait until your 40s or beyond to begin funding your nest egg, you may find that it takes a lot of money every month to get to eight-times your salary. But if you start in your 20s or even early on in your 30s, you could end up with eight-times your salary by 60 with relatively small monthly IRA or 401(k) contributions. 

Then there's the investing part. Some people are hesitant to invest in stocks because of the potential to lose money. And if you're worried about putting your long-term savings into the stock market, that's totally understandable. 

However, over the past 50 years, the stock market's average annual return has been 10%. And that accounts for years of great performance and years of losses. So if you're saving and investing for your retirement over a longer period, you have opportunities to ride out market downturns and come out ahead. 

Putting the numbers together

So we're trying to get to $517,600 by age 60. Let's assume you're able to generate an average annual 10% return in your portfolio. If you contribute $160 a month toward retirement starting at age 25, you'll have a touch more than $517,600 by age 60. 

Even if you aren't able to start saving for retirement until age 32, in that scenario, you only need about $325 a month to get your savings to $517,600. That's clearly about twice as much per month as you'd need to save compared to starting at 25, but it's still a reasonable sum.

But if you wait until age 40 to start saving for retirement and you want $517,600, it'll take $755 a month, assuming that same 10% return. And that, frankly, is not an easy sum of money to part with monthly on a typical salary.

What to do if you don't have enough retirement savings by 60

If you've reached your 60th birthday and you don't have close to eight-times your salary saved for retirement, don't assume your future is doomed. But prepare to make some adjustments to your plans.

First, consider delaying retirement by a few years. If you were aiming to end your career at 65, consider waiting until your late 60s. This gives you an opportunity to add to your savings and also leave your nest egg untapped a few extra years. The result? More growth in your retirement account.

Another option to consider is retiring when you originally planned, but continuing to work part-time. This puts less pressure on your savings, since you'll have a partial income to fall back on. And thanks to the gig economy, you may be able to find a job in retirement that's flexible and enjoyable. 

Remember, too, that having eight-times your salary by 60 is recommended by a trusted name in the financial industry, but it's not an absolute rule. If you have six-times your salary saved by age 60, you may be just fine if you plan to live frugally as a retiree. But it's a good idea to assess your savings by age 60 either way and see if you need to adjust any of your plans based on what you have.