401(k) Participants

How Much to Save for Retirement

Studies show that only about half of all workers are confident that they are saving enough for retirement. When it comes to how much you should be saving, there are a lot of things to consider:

How much have you saved already?
What do you expect to do in retirement?
What will your fixed expenses be during retirement?
How much risk can you tolerate in your portfolio?
How many years do you expect to be retired?

By following these four steps, you can increase your chance of reaching your retirement savings goal.

1. Increase Your Retirement Contributions Each Year
Try to increase your contributions until you are saving at least 12-15% of your paycheck.

2. Use your Salary Raise to Increase Your Contributions
Whenever you get a raise or bonus, consider putting a portion or all of it into your 401(k) plan.

3. Create a Budget and Spend Less
Cut out unnecessary expenses like expensive coffeehouses and move the savings into your 401(k). Reduce and eliminate your credit card debt and commit to paying off your balance each month.

4. Negotiate Services
Sometimes a call to your service providers can result in reduced fees and rates. Try this with your bank, cable TV, insurance carrier, credit card company and other providers that might negotiate fees.

Benefit of Starting Early

Megan starts to invest at age 25, while Connor waits until age 35. Both invested $100 per month for 30 years. They each invest the same amount of money in total ($36,000). The only difference is that Megan started 10 years earlier and enjoyed a longer timeframe for dollars to compound. At retirement age of 65, see what a difference it made! Megan’s investment grew to $183,675 while Connor’s only reach $100,954.

This example for illustrative purposes only.

How to Prioritize Your Savings

You may have several savings goals. Where should you start? Don’t delay saving for your own retirement by following these steps.

Contribute to your company’s 401(k) plan up to the match.
Pay off your credit cards from highest interest rates to lowest.
Create an emergency fund to cover at least three months of living expenses.

Once you have covered the basics, consider moving on to other priorities:

Save for the down payment on a home.
Save for children’s college education.
Pay down your mortgage.
Save for major purchases like a car or vacation home.

Retirement Planning Calculators

Retirement Savings and Planning

401(k) Calculator

A 401(k) can be one of your best tools for creating a secure retirement. Calculate how a 401(k) plan can help you build your retirement nest egg.

401(k) Contribution Effects on Paychecks Calculator

Increasing your contributions to your 401(k) is easier than you think. Use this calculator to get an estimate on how increasing your contributions to a 401(k) can affect your paycheck as well as your retirement savings.

How Long Will My Retirement Savings Last Calculator

Use this calculator to see how long your retirement savings will last. This is based on your retirement savings and your inflation adjusted withdrawals.

Retirement Planner Calculator

Do you know what it takes to work towards a secure retirement? Use this calculator to help you create your retirement plan. View your retirement savings balance and your withdrawals for each year until the end of your retirement. Social Security is calculated on a sliding scale based on your income.