The Art of Saving: How Much Money Do You Need
For a median-income household, fully leveraging these tax advantages can effectively increase saving power by 15-30% through tax deferral or tax-free growth.
Saving by Age: Benchmarks for 2025
Saving recommendations vary significantly across life stages, reflecting changing priorities, earning potential, and financial responsibilities.
Young Adults (25-35)
The focus for this age group should be on establishing foundational saving habits and beginning retirement contributions:
- Emergency fund: 3-6 months of essential expenses
- Retirement savings: 15% of gross income
- Recommended net worth: 1x annual salary by age 30, 2x by age 35
- Debt reduction: Prioritize eliminating high-interest debt while building savings
Mid-Career Adults (35-50)
This life stage typically combines peak earning years with significant financial obligations:
- Emergency fund: 6 months of expenses, plus additional buffers for dependents
- Retirement savings: 15-20% of gross income
- Recommended net worth: 3x salary by age 40, 6x by age 50
- College savings: If applicable, regular contributions to 529 plans or similar vehicles
- Housing equity: For homeowners, accelerated mortgage payments can build equity faster
