When you think of your bucket list, what does it include? International adventures? Courtside tickets to watch your favorite team? No matter your dreams, one essential item probably sits at the top of your list: retirement.
Read more: Traditional or Roth IRA? Find out which is right for you
Understanding your retirement needs
To plan for a financially secure future, it’s important to assess your potential expenses, anticipate your desired lifestyle and determine the resources required to support it.
How much do you need to retire?
There are a lot of factors at play, but the exact number could depend on:
The age you plan to retire
When you will begin taking Social Security benefits
Your desired lifestyle (hobbies, where you’ll live, travel) as a retiree
Retirement goal calculator
Our calculator (which doesn’t account for Social Security) can help you determine how much money you may want to save for retirement.
Retirement fund rules of thumb
While you can determine how much you may need to save for retirement more precisely by using the calculator, you can also follow some useful rules of thumb to get a good estimate. One such guideline is to have 10 to 12 times your annual income at retirement age. So, if you currently earn $100,000, you will need 10 times that amount, or $1 million, at retirement.
Another common way of thinking is to accumulate enough to spend between 60% and 100% of your pre-retirement salary each year in retirement. This is what it might look like if you plan to spend 80% of your pre-retirement salary each year:
Pre-Retirement Salary | Retirement Income |
|---|---|
$50,000 | $40,000 |
$80,000 | $64,000 |
$100,000 | $80,000 |
$120,000 | $96,000 |
$200,000 | $160,000 |
How much to save for retirement by age
The thought of having a couple million dollars by your 60s or 70s can sound daunting. Breaking down your retirement goals with age-based benchmarks can help.
By Age... | You Should Aim to Save |
|---|---|
30 | 1 x your income |
40 | 3 x your income |
50 | 5 x your income |
60 | 7 x your income |
70 | 9 x your income |
Strategies to help you get started
There are a variety of steps you can take to help achieve your retirement goals.
Set financial goals
When planning for retirement, set SMART financial goals:
Specific: Define the exact number you want to achieve.
Measurable: Quantify your goal to track progress, such as aiming to save $1,000 a month.
Achievable: Set realistic goals based on income, expenses and savings potential.
Relevant: Ensure your goals align with your overall retirement vision.
Time-bound: Establish a timeframe for achieving your goals, like retiring by age 65.
Work with a financial advisor
Trying to achieve a major financial milestone like retirement can be overwhelming. Working with a financial advisor can help you map out investing strategies that align to your money goals.
Ways to catch up
If student loans, a rocky job market or any other reason kept you from planning for retirement in the past, that doesn’t mean you can’t get on track.
Employer 401(k) match: If your employer offers a contribution match for your 401(k), consider opting in to take advantage of the program.
Automation: Automatically divert a portion of your paycheck into your 401(k), set up monthly transfers from your checking account to your IRA or turn on recurring transfers for your savings account.
Contributions: Work your way up to maximizing your contributions, as retirement accounts have contribution limits.
2025 contribution limits
Account Type | Under age 50 | Age 50+ catch-up limits |
|---|---|---|
Traditional/Roth IRA | $7,000 | $8,000 |
401(k) | $23,500 | $31,000 |
Planning for your golden years
No matter your life stage or what you envision for your future, retirement is a worthy goal. Don’t let present or future financial fears hold you back from getting started. The sooner you start, the less you’ll have to worry later.
