A new study from the Pew Charitable Trust warns that so-called late boomers and members of Generation X will face declining standards of life in retirement because they haven't saved enough.

Late boomers are defined as those born after 1956, while Generation X is made up of those born between 1966 and 1975.

So how much should you save if you fall into either of these age groups? Fidelity Investments has some new easy rules of thumb to make sure you're not too far behind.

The guidelines state that by age 35, you should have one times your annual salary saved up for retirement. Five years later, you should have two times. And on and on, until you reach 67 when you should have eight times your annual salary saved.

Laid out visually, the guidelines look like this:

  • By 35, save 1x gross annual salary
  • By 40, save 2x gross annual salary
  • By 45, save 3x gross annual salary
  • By 50, save 4x gross annual salary
  • By 55, save 5x gross annual salary
  • By 60, save 6x gross annual salary
  • By 67, save 8x gross annual salary

Meanwhile, more and more employers are providing matches on their 401(k) plans, according to new numbers from Charles Schwab. Employers who bailed on matching contributions during the financial meltdown are now back up to nearly the pre-meltdown level.

This is not being done out of altruism. There is a provision in the law that if an employer can't get the vast majority of employees to participate, the bosses can't themselves get high levels of matching 401(k) compensation!

So your company's 401(k) match is there for the benefit of the boss and as a bribe to get you to participate. I say take the bribe. It's free money!

Other Interesting Reads

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Image of Clark Howard About the author: Clark Howard

Clark Howard is a consumer expert whose goal is to help you keep more of the money you make. His national radio show and website show you ways to put more money in your pocket, with advice you can trust. View More Articles

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