How Much Should You Save for Retirement at Every Age?

“How much should I save for retirement?”

This question gets asked often but rarely answered with concrete numbers in Indonesia. OJK has launched a Pension Fund Development Roadmap 2024-2028, but that document focuses on industry strengthening — not giving practical targets for individual workers.

This article fills that gap. You’ll get retirement savings targets by age, from 25 to 59, tailored to the Indonesian context: earlier retirement age, shorter life expectancy, and the reality that BPJS (Indonesia’s social security) isn’t enough.

Why Do You Need Targets?

Without targets, retirement planning becomes empty hope. “I’ll save as much as possible” sounds good but provides no direction.

Age-based targets provide:

• Benchmarks to measure whether you’re on track or falling behind
• Concrete motivation — not just “saving for the future”
• Early warning if you start veering off course

In developed countries, Fidelity Investments popularised a simple guide: save 1x your annual salary by age 30, 3x by 40, and so on up to 10x by 67.¹ But this guide can’t be applied directly in Indonesia.

Why Must Indonesian Targets Be Higher?

There are five fundamental differences between the US and Indonesian contexts:

1. Earlier Retirement Age

In the US, full Social Security retirement age is 67 years. In Indonesia, the BPJS Jaminan Pensiun (pension guarantee) retirement age is 59 years (as of January 2025).²

This means Indonesian workers have 8 fewer years to accumulate retirement funds. This impact is massive — the last 8 years of a career are typically the highest-earning period with the largest contributions.

2. BPJS Is Less Adequate Than Social Security

US Social Security provides a replacement rate of about 40-50% of final salary. BPJS Jaminan Pensiun? The estimate is only around 30-40%, and even that’s capped at a maximum monthly wage of Rp 10.5 million (about $680).³

This means personal savings must cover a larger gap in Indonesia.

3. Different Life Expectancy

Indonesia’s current life expectancy is about 72 years (2024 national average).⁴ Lower than the US (~78 years) or Japan (~84 years).

This actually provides some relief — the retirement period that needs funding is shorter, around 15-20 years compared to 20-25 years in developed countries. But don’t rely on this too much — life expectancy keeps increasing, and you might live longer than average.

4. Dominance of the Informal Sector

About 60% of Indonesian workers are in the informal sector — without any BPJS protection. They must build 100% of their retirement fund themselves, without employer contributions.

5. Inflation and Uncertainty

Bank Indonesia targets inflation at 2.5% ±1%.⁵ But history shows Indonesia has experienced significant inflation spikes. A higher safety margin is needed.

Retirement Fund Targets by Age

Based on the analysis above, here are adjusted targets for Indonesian workers:

For Formal Workers (With BPJS)

Age	Minimum Target	Ideal Target	Example (Rp 5 million/month salary)
25 years	0.5x annual salary	1x annual salary	Rp 30-60 million
30 years	1.5x annual salary	2x annual salary	Rp 90-120 million
35 years	3x annual salary	4x annual salary	Rp 180-240 million
40 years	6x annual salary	8x annual salary	Rp 360-480 million
45 years	10x annual salary	12x annual salary	Rp 600-720 million
50 years	15x annual salary	18x annual salary	Rp 900 million - 1.08 billion
55 years	20x annual salary	22x annual salary	Rp 1.2-1.32 billion
59 years	25x annual salary	30x annual salary	Rp 1.5-1.8 billion

Important notes:

• These targets are total accumulation (BPJS + personal savings)
• “Ideal Target” provides a safety margin for inflation or early retirement
• Rupiah examples use a fixed Rp 5 million salary — in practice, your salary will increase throughout your career

Comparison with Fidelity (US)

Age	Fidelity (US)	Indonesia (Our Recommendation)	Reason for Difference
30	1x	1.5-2x	Retire 8 years earlier
40	3x	6-8x	BPJS is less adequate
50	6x	15-18x	Less accumulation time
60	8x	25-30x (at age 59)	Combination of all factors

See the pattern? Indonesian targets are 2-3x higher for the same age, mainly because of earlier retirement age and lower BPJS replacement rate.

Breakdown: BPJS vs Personal Savings

The targets above are totals. But how much can you expect from BPJS, and how much must you prepare yourself?

Estimated BPJS Accumulation

For a worker earning Rp 5 million/month who works formally from age 25-59:

JHT (Jaminan Hari Tua — Old Age Security):

• Contributions: 5.7% of salary (3.7% employer + 2% employee)
• Monthly contribution: Rp 285,000
• Estimated accumulation over 34 years (6% annual return): Rp 500-600 million

JP (Jaminan Pensiun — Pension Guarantee):

• Contributions: 3% of salary (2% employer + 1% employee)
• Monthly contribution: Rp 150,000
• Estimated accumulation: Rp 300-350 million

Total BPJS: approximately Rp 800-950 million

To understand the difference between JHT and JP in detail — including how to claim and withdrawal conditions — read BPJS JHT vs JP: Differences, Benefits, and How to Claim.

Sounds decent? But remember some important caveats:

• This estimate assumes continuous formal employment for 34 years
• Many workers experience gaps in BPJS membership (resignation, layoffs, informal sector)
• JHT is often withdrawn before retirement during resignation or layoffs
• Actual BPJS returns can vary

The Gap You Must Fill Yourself

With a target of Rp 1.5-1.8 billion at age 59:

Component	Estimate
Total target	Rp 1.5-1.8 billion
BPJS (JHT + JP)	Rp 800-950 million
Gap (personal savings)	Rp 550-850 million

BPJS provides about 50-60% of needs. The rest you must prepare yourself.

For a more detailed explanation of the BPJS gap, read BPJS Alone Isn’t Enough for Retirement.

Instruments for Closing the Gap

There are several investment vehicles you can use to build your personal retirement fund:

1. Mutual Funds

This is the most flexible and affordable instrument for most Indonesian workers.

Type	Estimated Return	Risk	Suitable For
Money Market	5-6%/year	Very low	Emergency fund, age 55+
Fixed Income	6-8%/year	Low-medium	Diversification, age 45+
Balanced	8-12%/year	Medium	Moderate growth, age 35-50
Equity	10-16%/year	High	Aggressive growth, age 25-40

Mutual fund advantages:

• Can start from Rp 10,000 (under $1)
• 0% tax on gains (for mutual funds)
• Liquid — can be redeemed anytime
• Professionally managed

To understand how to choose the right mutual fund, read Index Mutual Fund Guide.

2. DPLK (Dana Pensiun Lembaga Keuangan — Financial Institution Pension Fund)

DPLK is a voluntary pension program managed by banks or insurance companies, regulated by OJK.⁶ Read the complete comparison in DPLK vs BPJS: Financial Institution Pension Fund Guide.

DPLK advantages:

• Contributions can be deducted from taxable income (tax-deductible)
• Enforces discipline — difficult to withdraw before retirement age
• Investment profile choices (conservative, moderate, aggressive)

Disadvantages:

• Less flexible than mutual funds
• Some DPLKs have high fees

DPLK is suitable as a complement to mutual funds, especially to utilise tax benefits.

3. Deposits

Deposits offer safety and return certainty, but returns are relatively low.

Current returns:

• Conventional banks: 3.75-4.5%/year
• Digital banks: 6-8.25%/year (promotional rates)

When deposits are suitable:

• Age 50+, approaching retirement
• As a conservative component in your portfolio
• Funds that must not lose value

Warning: Deposit returns are often below inflation long-term. Don’t make deposits your only retirement instrument if you’re young. Learn more in Deposits Lose to Inflation? Safe Investment Alternatives.

4. Recommended Combinations

The optimal strategy is usually a combination:

Age	Equity Mutual Funds	Balanced Mutual Funds	Fixed Income Mutual Funds	Deposits/Money Market
25-35	40-50%	20-30%	10-20%	10-20%
35-45	25-35%	25-35%	20-30%	10-20%
45-55	15-25%	20-30%	30-40%	15-25%
55-59	5-15%	10-20%	40-50%	25-35%

Basic principle: The younger you are, the more aggressive. The older you are, the more conservative. This is because you have more time to recover from market volatility when you’re young.

What If You’re an Informal Worker?

About 60% of Indonesia’s workforce is in the informal sector — traders, freelancers, farmers, small business owners, gig economy workers. Without BPJS Ketenagakerjaan, you have no government retirement foundation.

Targets for Informal Workers

Because there’s no BPJS contribution, targets must be much higher:

Age	Target (Without BPJS)
30 years	3-4x annual income
40 years	12-15x annual income
50 years	25-30x annual income
59 years	35-40x annual income

Yes, you need about 50% more than formal workers for the same retirement outcome.

Strategies for Informal Workers

1. Register for BPJS Ketenagakerjaan independently

   • Informal workers can register as Non-Wage Recipient (BPU) participants
   • You choose the wage amount that becomes the contribution basis
   • At minimum, get JHT and JP protection

2. Invest more aggressively when young

   • Without the BPJS “safety net”, you must build it yourself
   • Larger allocation to equity mutual funds (50-60%) when young
   • Consistency — this is more important than the amount

3. Consider DPLK

   • Tax benefits still apply for informal workers
   • Helps with discipline since it’s hard to withdraw

4. Diversify income

   • Build multiple income streams
   • Consider rental property as “passive retirement income”

What If You Started Late?

Not everyone starts saving at 25. If you started late, don’t panic — but you need a catch-up strategy.

Strategies for Late Starters

Starting at age 35:

• You still have 24 years — enough time for compounding to work
• Target saving rate: 15-20% of salary
• Focus on equity and balanced mutual funds

Starting at age 40:

• Time is more limited, but still possible
• Target saving rate: 20-25% of salary
• Consider delaying retirement by 2-3 years if possible

Starting at age 45+:

• Every year is precious
• Target saving rate: 25-30% of salary
• Combine with: reducing lifestyle inflation, delaying retirement, additional income
• Be realistic about targets — may need to adjust expectations

Illustration: The Power of Starting Early

Starting Age	Monthly Investment	Years Saving	Total Deposited	Final Result*
25	Rp 1,000,000	34	Rp 408 million	Rp 2.8 billion
30	Rp 1,000,000	29	Rp 348 million	Rp 1.8 billion
35	Rp 1,000,000	24	Rp 288 million	Rp 1.1 billion
40	Rp 1,000,000	19	Rp 228 million	Rp 640 million
45	Rp 1,000,000	14	Rp 168 million	Rp 350 million

*Assuming 10% annual return, monthly compounding, retirement at age 59

With the same monthly investment, someone who starts at 25 gets 8 times the result compared to someone who starts at 45. This isn’t magic — it’s compounding.

Checklist: Evaluate Your Position

Use this checklist to evaluate where you stand currently:

Step 1: Calculate Your Total Retirement Assets

• Check your JHT balance in the JMO app or sso.bpjsketenagakerjaan.go.id
• Check DPLK balance (if any)
• Calculate total mutual fund investments
• Deposits allocated for retirement
• Total = all of the above

Step 2: Compare with Targets

• Calculate your annual salary (monthly salary × 12)
• Look at the target table for your age
• Compare: Are you above the minimum target?

Step 3: Determine the Gap

• If below target: calculate the difference
• Divide the gap by months until your next target age
• Add to your monthly investment

Step 4: Adjust Allocation

• Review asset allocation — is it appropriate for your age?
• Rebalance your portfolio if too aggressive/conservative

Frequently Asked Questions

”What about inflation?”

Targets in this article already implicitly account for inflation by using salary multiples. Your salary (usually) rises with inflation, so targets in the form of “x times salary” are already inflation-adjusted.

”What if I’m not sure about retirement expenses?”

General rule: target 70-80% of your final income. Some expenses decrease (commuting, work clothes), but some increase (healthcare, recreation).

”Will BPJS still exist when I retire?”

BPJS is a national program that will most likely continue to exist. But benefits could change. Don’t depend 100% on BPJS — diversify with personal savings.

”What about healthcare costs?”

Targets in this article don’t include major healthcare costs (critical illness, long-term care). BPJS Kesehatan provides basic coverage, but consider additional health insurance or a separate healthcare emergency fund.

”What if I have a mortgage until old age?”

Ideally, your mortgage is paid off before retirement. If that’s not possible, factor those payments into your retirement expense planning. Your retirement fund target may need to be higher.

Easy-to-Remember Rule of Thumb

If all the numbers above feel overwhelming, remember one simple rule:

“Retirement fund target = 25x your final annual salary”

For a Rp 5 million/month salary (Rp 60 million/year):

• Target: 25 × Rp 60 million = Rp 1.5 billion

This gives you funds sufficient for 4% annual withdrawal (Rp 5 million/month) for 25+ years, assuming the funds continue to be invested.

Action Items

Finished reading? Don’t stop here. Take action:

1. Today: Check your JHT balance in the JMO app
2. This week: Calculate your total retirement assets (all sources)
3. This month: Compare with your age target — determine the gap
4. This quarter: Set up automatic monthly investment to mutual funds

A comfortable retirement is the result of planning, not luck.

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References

• How Much Do I Need to Retire? — Fidelity Investments (2024)
• Contribution Amounts for JHT, JKK, JKM, JP and JKP — BPJS Ketenagakerjaan (2025)
• Worker Retirement Age Becomes 59 Years — Tempo (2025)
• Life Expectancy by Province and Gender — BPS (2024)
• BI-Rate — Bank Indonesia (2025)
• OJK Launches Pension Fund Roadmap 2024-2028 — OJK (2024)
• Financial Institution Pension Fund — OJK Sikapi Uangmu

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Disclaimer: This article is for educational purposes only, not professional investment or financial advice. The figures presented are estimates based on simplified assumptions — actual results will vary depending on market conditions, inflation, and your individual situation. Consult a licensed financial planner for recommendations tailored to your needs.

Related Articles

• Retirement Savings Guide
• DPLK (Company Pension Fund)
• FIRE (Financial Independence, Retire Early) in Indonesia
• JHT vs JP: Understanding Social Security Programs
• Portfolio Rebalancing Guide

Footnotes

1. How Much Do I Need to Retire? — Fidelity Investments (2024) ↩

2. Worker Retirement Age Becomes 59 Years — Tempo (2025) ↩

3. Contribution Amounts for JHT, JKK, JKM, JP and JKP — BPJS Ketenagakerjaan (2025) ↩

4. Life Expectancy by Province and Gender — BPS (2024) ↩

5. BI-Rate — Bank Indonesia (2025) ↩

6. Financial Institution Pension Fund — OJK Sikapi Uangmu ↩