How Much Do You Need to Save for Retirement? Here’s How to Find Out

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Whether your plans include basking on a quiet beach or sipping champagne in your first-class seat to some far-off destination, you’re probably looking forward to a well-deserved break after a lifetime of hard work.

But figuring out how much you need to save for retirement can be just as taxing as earning the money in the first place. And once you have a total in mind, actually achieving that savings goal can feel overwhelming.

Financial experts offer a few well-worn guidelines and rules of thumb to help you make your ideal nest egg a reality. But the exact amount you need to save during pre-retirement depends on your personal financial landscape — and what you want that landscape to look like down the line.

Here’s how to tell how much you need to save for retirement, no matter your age, income level, or golden-years goals.

Retirement Saving Rules of Thumb… and When to Break Them

Maybe 15%

Generally speaking, financial experts advise saving about 15% of your income for retirement. (That’s in pretax dollars, by the way, which means it’s a significant portion of your paycheck.)

Let’s say you’re a freshly-minted college grad and just scored your first real job, making a $35,000 salary. The rules say you should stash $5,250 away for the future, most likely in a company-sponsored 401(k) plan.

But… Maybe More

If you’re starting to save later rather than earlier, that percentage goes up to help you compensate for the lost time you could have been earning income through compound interest.

Maybe you’ve just celebrated your 35th birthday and realized it’s time to get serious about this retirement-savings thing. If you’ve yet to start working on your nest egg, you’re in good, or at least plentiful, company:

About one in five half of Americans have absolutely nothing saved for retirement. But to catch up, experts suggest you save 23% of your income, a substantial increase over that twentysomething’s 15%.

But Here’s Why Those Rules Might Not Apply

But a percentage-based rule of thumb can only go so far. Your actual retirement-savings needs vary by the following:

  • Age
  • Income level
  • What you expect your retirement income to look like

What’s more, today’s retirement goals are a lot different than they were in the past. The pension, once a common workplace perk, is all but extinct, and many of us are carrying substantial debt much further into our life spans.

Malik S. Lee, a certified financial planner and founder of Atlanta-based Felton & Peel Wealth Management, is skeptical about the old guard’s retirement suggestions. “Frankly, I feel that going off of old rules of thumb, such as saving 15 or 20 times your salary, is a thing of the past,” he says.

Instead, he says, figuring out how much you need to save for retirement is all about planning. And whether you hire professional help or DIY it, that means you’ve got some homework to do.

How Much Money Should You Have at Retirement?

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It would be nice to have an easy, set guideline for how much to have saved for retirement by 30, 40, or 50.

But the truth is, you can’t start answering the “how much should I save” question before answering this one: How much are you planning to spend?

Your specific retirement-savings goal depends on how you plan to live once you get there.

Do you want a modest retirement — a simple life spent working on hobbies and passions at home? Or are you planning on spending your golden years in style, jet-setting and taking all those epic vacations you didn’t have time for during your prime?

If you want to retire with $100K per year in income, your calculation is going to look significantly different than it would if your income needs are only $35,000.

Start With This Very Important Question

So the very first thing you need to do, before you even touch that retirement calculator, is sit down and work out how much you may spend during your retirement. Don’t forget to include regular expenses like housing and food as well as any long-held plans for fun — but expensive — adventures.

You’ll also need to multiply the yearly expense by how many years you think you’ll need that income. (Yes, this means estimating your own death date. Yes, it’s a bit morbid.)

Once you’ve got a decent idea of how much your retirement will cost, you can move on to the next step.

How Much Should I Save for Retirement Each Month?

Now that you know exactly how much you need to fund your dream retirement, the question remains: How much do you need to save to get there?

The easiest way to figure out exactly how much to stash is to use a retirement savings calculator, like this one from Bankrate.

You simply enter information like your age, income level, existing retirement holdings and contributions and — most important — how much income you require at retirement, usually expressed as a percentage of your current earnings.

The calculator will then tell you how far your current savings efforts will get you, which gives you an idea of how much more you need to save to achieve your goals.

Calculate, But Keep These Points in Mind

The calculator may (or may not) include Social Security benefits as part of your projected retirement income, since there’s some speculation on whether those benefits will continue, at least at their current level. You can decide for yourself whether to factor Social Security in as a source of annual income.

Finally, don’t forget that this equation changes over time. As you progress through life, you’ll (hopefully) earn raises and accumulate a nice savings cushion. You may also change your retirement plans and decide you’ll need more or less income once you get there. So be sure to revisit your retirement-savings calculation often.

How to Meet Your Retirement Savings Goals

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So you’ve got your goal and you know how much you need to save to get there.

Now comes the really hard part: actually doing it.

Depending on how long you plan to live after retirement and how much you plan to spend then, you might be looking at a million-dollar savings goal… or even higher. You’ll have the best chance of reaching that total if you start saving for retirement as soon as possible — ideally, as soon as you’re earning an income.

But thanks to the power of compound interest, those sky-high goals aren’t impossible to achieve. When you let the stock market work its magic, even modest savings can stack up to a serious nest egg given enough time.

401(k) Savings

If you’re working for a company that offers one as part of its benefits package, your 401(k) account is likely your best retirement vehicle.

As far as retirement accounts are concerned, it’s ace: The 401(k) carries high contribution limits, gets you a tax break today, and if you’re lucky, you may even be able to take advantage of an employer match, which means free money.

Self-Employment Options

But if you’re wondering how to save for retirement without a 401(k) (hello, freelancers — trust me, I feel you), you’ve still got options.

Figuring out how to save for retirement when you’re self-employed is a little bit more complicated, but that doesn’t make it impossible. You can open an individual retirement account, such as a Roth IRA (taxed today) or traditional IRA (tax-deferred).

Although they’ve got significantly lower contribution limits than 401(k)s do — $6,000 for 2019, or $7,000 including catch-up contributions for savers over 50) — IRAs still give you access to the power of compound interest.

If you’re a solopreneur or small business owner, you could also look into a SEP IRA (for small-business owners) or solo 401(k) (for business owners with no employees), which carry higher contribution limits and can help you achieve your retirement savings goals faster.

But no matter your income level or retirement plans, the most important rule for retirement savings is this: Just do it! Although starting young is ideal, working toward your nest egg is a worthy financial goal at any age — and when the golden years arrive, any savings are better than none.

Whether you meet your ideal retirement savings total or not, your future self will thank you for your efforts.

Jamie Cattanach’s work has been featured at Fodor’s, Yahoo, Self, HuffPost, The Motley Fool, Roads & Kingdoms and other outlets. Learn more at