How Much Savings Does the Average Middle-Class Worker Need to Retire?

Planning for retirement has become increasingly complex for the average middle-class household. With uncertainty surrounding Social Security and the rising cost of living, determining how much you actually need to save for your post-work years requires more than just guesswork. Certified financial planner Andrew Latham, managing editor at SuperMoney, notes that while there’s no universal answer—everyone’s situation differs based on debt, current assets, potential inheritances, and expected medical costs—there are proven frameworks that can guide your savings goals.

The middle class in the United States typically comprises households earning between roughly $56,600 and $169,800 annually, according to research from the Pew Research Center. Understanding how much the average middle-class person should accumulate requires looking at two established retirement planning methodologies.

The 10x-12x Income Multiplier

Financial experts widely recommend that the average middle-class worker accumulate between 10 and 12 times their annual income by retirement age. This benchmark translates into specific targets depending on where you fall within the middle-income spectrum:

• Those earning $56,600 annually should aim for $566,000 to $679,200 in savings
• Higher earners at $169,800 per year need roughly $1.7 million to just over $2 million

Workers retiring with less than approximately $566,000 face potential financial challenges throughout their retirement years. This rule provides a straightforward baseline that many use to evaluate whether their current savings trajectory is on track.

The 25x Expense Multiplier Approach

A more personalized method involves the Rule of 25, which creates a customized target based on your actual retirement expenses rather than a fixed multiple. Here’s how it works:

First, calculate your estimated annual retirement spending—typically about 75% of your pre-retirement expenses, since you’ll no longer spend money on work-related costs. Next, subtract your expected fixed income sources, such as Social Security or pension payments. Finally, multiply the remaining amount you need from savings by 25.

For the lower-income middle-class earner, this calculation looks like:

• Annual expenses at 75% of $56,600 = $42,450
• Minus expected Social Security of $20,000 = $22,450 needed annually from savings
• $22,450 × 25 = $561,250 total savings needed

For higher earners:

• Annual expenses at 75% of $169,800 = $127,350
• Minus expected Social Security of $30,000 = $97,350 needed annually from savings
• $97,350 × 25 = $2.43 million total savings needed

This approach assumes a sustainable 4% annual withdrawal rate from your portfolio, giving you flexibility to adjust based on actual spending patterns.

Building Your Personal Retirement Blueprint

The real takeaway, according to Latham, isn’t hitting some arbitrary number but creating a realistic plan tailored to your circumstances. The average middle-class person’s savings target should reflect their specific debt levels, anticipated inheritance, health considerations, and retirement lifestyle goals. Rather than viewing these figures as rigid targets, use them as starting points for deeper financial planning that accounts for your unique situation.