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How Much Should I Save for Retirement?
Summary
There’s no single number, but common guidelines use a share of income or a target multiple of salary. Your age, target retirement date, and expected spending all matter.
How much you should save for retirement depends on when you want to retire, how much you expect to spend, and how much you’ve already put away. Rules of thumb help, but they’re not one size fits all.
Many advisors suggest saving at least 10% to 15% of gross income if you start in your thirties. If you start later, you may need to save a larger share to catch up. The idea is to build a nest egg that can support withdrawals in retirement without running out.
Factors that change the number
Your target retirement age matters. Retiring at 65 with a pension is different from retiring at 50 with no pension. So is your expected spending. Someone who plans to travel a lot or live in a high-cost area may need more than someone who plans to downsize and stay put.
Existing savings and any pension or Social Security also change the math. The more you already have, and the more you expect from other sources, the less you may need to save from each paycheck. A Retirement Income Gap Calculator can help you see how much income you might be short and what to save to close the gap.
Definitions
- Savings rate
- The share of your income you save, often expressed as a percentage of gross or take-home pay.
FAQ
What percentage of income should I save for retirement?
Common guidelines range from 10% to 20% of gross income, depending on when you start and when you want to retire. Starting later usually means saving a higher percentage.