There is no question that many people want to be at a target number by a certain age to know they are on track for retirement. This argument and the reasoning why knowing such a number is so important is boosted by Edward Jones, a financial firm that has long provided a guide on exactly what this number should be. 

While it’s okay if these numbers fluctuate a little, there is every reason to feel on track if you are remotely close to the numbers Edward Jones is indicating. For those who make around $100,000 a year, knowing an approximate number by the time you turn 45 will help you know that retirement is on track or if you will need to play catch up. 

Where You Should Be

Suppose you’re about to turn 45, and you and your family make approximately $100,000 annually. At this point in your life, you know you still have at least two more decades to work, but retirement is no longer in the back of your mind like it once was. 

According to Edward Jones, the average retirement savings of someone between 45 and 54 should be around $313,220. Knowing where you are in approximation to this number strongly indicates how much you need to put into retirement to catch up or how far ahead of the game right now. 

To be more specific, at a $100,000 salary, Edward Jones indicates you should want to be around $360,000 – $450,000 in a retirement account. Unsurprisingly, the number gets larger as your salary grows. For example, at a $150,000 salary, you should have at least $690,000 tucked away in a retirement account and growing, preparing for the day when you stop working. 

What To Do If You Are Behind

It’s important to remember that saving for retirement is a marathon, not a sprint. This means you have time to catch up as it’s a long-distance event, not a financial problem you must solve today. 

However, if you are behind, regardless of how much, it’s also something to be very focused on. It would be best to look at your monthly spending to see where to carve out additional money for a retirement account. Unfortunately, just cutting your spending isn’t the only step you need to take to catch up. 

At 45, you’re not eligible for catch-up contributions to a 401(k), so you need alternative options. One such option might be ensuring you fully utilize your employer’s matching. This could mean adjusting your contribution to the maximum as well as taking advantage of your employer’s maximum contribution level. 

Separately, consider doing something every month known as “pay yourself first.” This means that your contribution to your retirement savings should be one of your monthly expenses. Then, you use whatever money is left over for entertainment, expenses, and more. 

Accelerate Your Position 

Congratulations, you’re on the right track if you’re already in the financial position Edward Jones recommends. However, now is the time to see if you can accelerate your position and hit that retirement number you’ve been thinking about for a few years a little early. 

First and foremost, you should increase your automatic contributions to your 401(k) as much as possible. If you find yourself with extra savings at the end of each month, you know that a slight increase in your contribution won’t dramatically impact your life now, but it will compound over time, giving you even more money later. 

Outside of your 401(k), consider investing in a Roth IRA or Traditional IRA and maxing out these accounts as much as their annual limits allow. Keep in mind that a Traditional 401(k) will reduce your taxable income today, while a Roth will allow for tax-free withdrawals during retirement, so there are advantages to both account types. 

Last but not least, if you have the time, look at pursuing an additional income stream, potentially something in the gig economy, to give yourself even more income each month that you can put away. Outside of being more aggressive with your investing, one potential solution to help you accelerate your position is to bring in more money to put away for retirement. 

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