Most Americans' retirement savings are dangerously low.
According to a 2016 report from the Economic Policy Institute (EPI), the median working-age family (50th percentile) had only $5,000 saved in 2013. By contrast, the top one percent of families had $1.08 million or more stashed away in 2013, or 216 times more.
Where do you stand?
While putting away as much as you can is always better than nothing, hitting pre-determined milestones can help you figure out if you're on track to live comfortably in retirement.
By age 50, experts recommend having the equivalent of six times your annual salary in bank if you plan to retire at 67 and keep up a similar lifestyle, according to a recent report by financial services company Fidelity.
That's twice as much you should have by 40 (three times your salary) and three times as much as you should have by 35 (twice your annual salary).
And it's a lot. So how do you get there?
Save as much as you can as early as you can. Fidelity recommends putting away 15 percent of your income per year starting at age 25 and investing more than 50 percent of your savings over your lifetime.
"The good news is that that 15 percent also includes any employer match," Ken Hevert, senior vice president of retirement at Fidelity, tells CNBC Make It. That means if you're eligible for a five percent match on your 401(k) plan and you contribute five percent of your salary to the account, you're already putting away 10 percent.
Three big factors determine if you're on track for retirement: amount, account and asset allocation. In addition to saving 15 percent of your income, you should be investing it back into the market. The easiest way to get started is to sign up for your employer's 401(k) plan and take full advantage of any company match, which essentially gives you free money.
Regardless of whether your employer offers a 401(k), you can contribute to a Roth IRA or traditional IRA, which are both individual retirement accounts that offer tax breaks.
In addition to saving and investing, you also want to create a diversified portfolio. "The purpose of diversification, ultimately, is that through different economic cycles and different policy cycles, some asset classes will perform better than others," Hevert says.
As the market swells and declines over the years, a mix of various types of investments will keep you from being at the mercy of how one specific stock, or kind of stock, is performing.
Accruing six times your annual income by 50 represents an ideal scenario, especially if you choose to divert savings to other goals, such as buying a home or having kids. But, as a general rule, if you're aiming to save around 15 percent of your income — or as close as you can get — and invest it, "you're going to be in the right ballpark," Hevert says.
At the end of the day, how much you'll want to save for retirement will depend on the lifestyle that you want to maintain during your golden years. Do you want to travel? Pursue a hobby? Go back to school? "This is all about giving people the confidence that they're going to be able to maintain a desired lifestyle, while also putting themselves in the best position to not run out of money," Hevert says.
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