Saving for Tomorrow

 

How Much Should I Save?

Only about one-third of Americans are saving for retirement.1 That adds up to a lot of people who’ll be struggling financially after they stop working.

Why aren't more of us saving for retirement? The reasons may sound familiar.

It's too hard to get started.

Retirement is still a long ways off.

I'll be fine on my Social Security benefits.

I don't know how much to save.

Here's the Reality.

  1. Your Social Security benefits will probably replace only about 40 percent of your pre-retirement income. Experts say you'll need 80-90 percent of it to live comfortably when you retire.
  2. Your employer offers a retirement plan that is easy to join.
  3. Enrolling in a plan now, rather than putting it off until you're close to retiring, will mean more spending money in retirement.

It's easier than you think to stay on the path to retirement readiness.

Set a Target Savings Goal.

Saving even a small amount of your pay each month can make a big difference when you retire. Your employer makes it easy for you to save. Your company's plan lets you:

  • Optimize the company match, if available
  • Increase your contribution whenever you like
  • Enjoy tax savings and the ease of automatic saving
  • Experience the freedom to choose your investments

Saving Mileposts

Age 30

Target Savings Goal:
​10-15% each paycheck

Aim to Save:
1x annual salary

Age 45

Target Savings Goal:
​15%-20% each paycheck

Aim to Save:
3.5x annual salary

Age 60

Target Savings Goal:
​20% each paycheck

Aim to Save:
7x annual salary

Use your target savings goal and enroll in your company’s plan today. The sooner you start saving, the easier it will be. Starting early gives your money time to compound. That’s when the earnings on your savings are reinvested and begin earning an investment return of their own.

If you’ve already enrolled in your plan, figure out how much more you can save and increase your contribution today.

 

Use the retirement needs calculator for a quick estimate of how much you might need to save.

More About Saving for Retirement
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Creating a budget can be an important tool to help you save. Get started now and learn how to create a budget.
You’re balancing a range of financial priorities. Planning for retirement should be high on the list. To help you focus, we’ve listed a few common obstacles faced by many people in your age group. You’ll also find some basic actions you can take to start — or stay — on the road to saving.
How much will you need in retirement? When you retire, you should generally plan on replacing about 80 percent or more of your pre-retirement income. Are you on track?
Before taking a loan from your retirement plan consider this: It may seem like a fast and easy way to access your account money, but is it really a good idea? Before you decide, take a moment to consider some of the risks and potential pitfalls.

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Combine strong plans with tools and education that help employees plan for retirement.