How Much to Save for Retirement
To Maintain Your Pre-Retirement Standard of Living
The average worker needs to save about 10% of pay each year (including employer contributions) to maintain their pre-retirement standard of living.
- You need to save more if you haven’t saved that much or if investment returns were poor – as they were over much of the past 15 years.
For a Quick Estimate of how much you need to save, enter your age, normal yearly earnings, and current retirement savings.
- Then go to Advanced, below, to see how much you need to save if you adjust your plan & assess your risks.
|Please fill all required fields|
Under The Covers
Our Assumptions & Disclaimer
Retirement Age: The age you intend to retire. Your spouse or partner, if you have one, is assumed to retire at the same time.
Target Date Funds: TDFs are mutual funds that shifts your savings from stocks to bonds as you age. A “more aggressive” TDF targets a more distant retirement age and invests more of your savings in stocks. A “less aggressive” TDF targets a closer retirement age and invests less of your savings in stocks.
Investment Returns: Average returns for stocks and bonds since 1927, less 0.25% in mutual fund fees. “Bad returns” are returns over the decade 2000-2009.
Social Security Benefit Cuts: A 10% cut would eliminate about half the program’s financing shortfall, with increased revenues needed to eliminate the rest.
You need to save MORE if your earnings and standard of living rise faster than average.
You also need to save LESS if your earnings and standard of living rise slower than average, if you will get an employer pension (that pays a set amount each month as long as you live) or if you will downsize or otherwise reduce your expenses in retirement.