No single number fits everyone. The right amount depends on the lifestyle you want, the age you retire, other income and how your investments perform. Rules of thumb are useful starting points as long as you know what they assume.
Common rules of thumb
- Replace a share of income: many planners aim for retirement income equal to a large portion of pre-retirement income, adjusted for your situation.
- The 4% guideline: withdrawing about 4% of your portfolio in the first year and adjusting for inflation after that. It is a starting point, not a promise.
- Save a percentage of pay: a common target is 10–15% of income including any employer match, but the right rate depends on when you start.
Build your own estimate
Estimate yearly spending in today’s dollars, subtract expected Social Security, inflate the rest to your retirement year and work out the savings needed to support it. The retirement calculator runs this calculation and shows the extra monthly saving needed to close any gap.
Levers you control
- Capture your full employer match; see the 401(k) calculator.
- Raise your savings rate with each raise.
- Delay claiming Social Security; compare ages with the Social Security calculator.
- Work a little longer or trim planned spending.
If you are behind, start now. Even modest increases made earlier can matter more than large increases made later.