facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast phone blog external search brokercheck brokercheck Play Pause
What’s The Best Way For High Earners To Determine Their Retirement Number? Thumbnail

What’s The Best Way For High Earners To Determine Their Retirement Number?


By Eric Chetwood, CFP®

Retirement is arguably the most talked-about financial topic, and rightly so. Our retirement years can span decades and require sizable assets to take care of all our needs and desires in our non-working years. It can be especially difficult to save enough—or to even know if you’re saving enough—when you’re a high earner and plan to maintain your current lifestyle in retirement.

The exact amount of assets each person truly needs can be tricky to pinpoint, especially with the glut of contradictory and overwhelming advice provided by financial news sites and forums. For example, we often hear financial experts telling us that to live comfortably, we need X amount for a 30-year retirement, or that we should contribute X% of our income to our 401(k) every year. 

But those recommendations don’t take into account the fact that each family has wildly varying goals for their monthly income and lifestyle in retirement. With that being said, it’s no secret that most Americans struggle to save for even a modest retirement, (1) so simply comparing your savings to your neighbors’ often isn’t the best benchmark. Even so, knowing how your neighbors stand can be a good starting point to determine whether you’re on track and how your situation sets you apart.

The Numbers Tell The Story

In the most recent Survey of Consumer Finances (SCF), (2) we get an inside peek at the size of retirement savings accounts across varying age groups. Let’s take a look at the numbers for pre-retirees and those who have reached retirement. (Keep in mind that these numbers span across low-income households to high-income households.)


The majority of those nearing retirement, aged 55 to 64, don’t seem to be all that ready for their upcoming milestone. According to the SCF, the average household retirement savings in this group is only $374,000, with a median of $120,000. It’s clear that the average is skewed by high earners, but $374,000 in savings within 5-10 years of retirement is still a low number.

Those Who’ve Reached The Golden Years

Those aged 65 to 74, many of whom have already entered retirement and are thus spending more than they’re saving, also seem to be unprepared for this life transition even as they’re in the midst of it. In this group, only about 50% report having a retirement account at all, with the average household savings at $358,400 and the median amount saved at a mere $126,000.

But I’m A High Earner, So What’s My Benchmark?

You may be shocked by these numbers, and you have good reason to be. Retirement savings of $126,000 would likely provide less than $500 a month for a 30-year retirement. Those with savings that low will be unlikely to be able to stop working at typical retirement ages. 

But now that we know what the average person has saved, how do you figure out the number that’s correct for you?

Let’s take a look at how these figures compare to retirement savings milestones recommended by financial experts. According to Fidelity Investments, you can gauge your progress by comparing your retirement savings to your annual salary. (3) They suggest you aim for your retirement savings to be:

● 6x the amount of your salary by age 50
● 8x the amount of your salary by age 60
● 10x the amount of your salary by age 67

These numbers are much more likely to help you accurately determine the amount you need to have saved for retirement. For example, if you earn $600,000 a year, you would need about $6,000,000 in savings by age 67 to maintain your current lifestyle.

Although doable, it can be difficult for high-income earners to save this much of their income, and it often takes decades of diligent saving and investing to reach these numbers. If you’re behind, it may be difficult—but not impossible—to catch up.

What Do I Do Now?

Whether you are patting yourself on the back or biting your nails after reading these numbers, the fact of the matter is that you won’t be living the same retirement as your peers. Therefore, you need to figure out how your savings compares to the cost of the retirement you desire. There are a plethora of online retirement calculators, but they are often generic and fail to take into account the various vital factors that will impact your unique personal situation. 

The only way to truly get a clear idea of what you’ll need to retire comfortably is to have a financial planner run a thorough analysis of your goals and situation. A professional can utilize their expertise as well as modern technology to more accurately show you different possible retirement outcomes and how to prepare for both the good and the bad.

And if your retirement numbers aren’t where you need them to be to achieve your goals, your financial planner can help you strategize the best ways to play catch-up and improve your chances of reaching that vision.

We Can Help

When you work with us at Adams Chetwood Wealth Management, you won’t get a cookie-cutter solution. We employ personalized strategies to simplify your finances and get you on track toward your ideal future. If you feel like you are falling behind and are tired of staying up at night wondering if you will have enough money to retire while maintaining your current lifestyle, easily schedule a complimentary introductory meeting online or reach out to us at audra.grice@adamschetwood.com or (919) 287-5660.

About Eric

Eric Chetwood is managing partner and CERTIFIED FINANCIAL PLANNER® (CFP®) at Adams Chetwood Wealth Management Group, a faith-based Registered Investment Advisory (RIA) firm located in Durham, North Carolina. Eric graduated from the Kenan-Flagler Business School at the University of North Carolina at Chapel Hill in 2003 with a bachelor’s degree in business administration and has been on the Adams Chetwood team for over 15 years. Eric spends his days helping clients with comprehensive financial planning and portfolio construction and helping them navigate the opportunities and challenges of each stage of life. Away from the office, Eric enjoys effecting change in the local community. He was chosen to participate in the 2007 Leadership Durham program and the 2009 Leadership Triangle program. Currently, Eric serves as a directional Elder at the Summit Church. He also serves on the board of directors for the NC Study Center at UNC-CH and previously served on the board of Samaritan Health Center, an organization that provides medical care to uninsured and low-income families in Durham. He and his wife, Allison, have two sons, and are passionate about adoption advocacy as well as leveraging their gifts and resources to alleviate physical and spiritual poverty through microfinance and social businesses. To learn more about Eric, connect with him on LinkedIn.


(1) https://www.bankrate.com/banking/savings/financial-security-march-2019/
(2) https://www.federalreserve.gov/econres/scfindex.htm
(3) https://www.fidelity.com/viewpoints/retirement/how-much-money-do-i-need-to-retire 
*Retirement savings factors are hypothetical illustrations, do not reflect actual investments, results, or actual lifetime income and are not guarantees of future results. Targets do not take into consideration the specific situation of any particular user, the composition of any particular account, or any particular investment or investment strategy. Individual users may need to save more or less than the savings target displayed depending on their inputs of retirement age, life expectancy, market conditions, desired retirement lifestyle, and other factors.