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Laura Berry

Former Insurance Agent

Former Insurance Agent

Joshua Adamson

Joshua is a copywriter at Obrella who for more than 10 years has been creating content about insurance, health care, and more. He helps companies explain complex insurance subjects in simple ways so that customers can make smart buying decisions. He spends way too much time binge-watching Netflix, loves the outdoors and has a cat who tolerates him.

UPDATED: Nov 29, 2023

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Retirement Savings: How Much is Enough to Live Comfortably?

Older Couple Fishing

We talked about the best apps for retirement planning, but haven’t yet delved into how much you should save. Today, only about half of all Americans are set to meet their retirement savings goals. If you’re getting close to retirement or planning ahead (retirement plans should begin in your 20s), this is probably a question that’s circled around in your brain a time or two. In order to quell your worries and set you on the right track, we’ve done some research to help you find the exact number you need to live comfortably throughout retirement—and savings strategies if you still have work to do. Let’s get started.

The Magic Number

This differs from institution to research lab, but according to Fidelity, those planning on leaving work at age 67 should have eight times their ending salary in a savings account. Saving on this plan means you’ll be living on 85% of what you earned gross during your working years once you retire. Their savings scale breaks down like this:

  • At age 35, you should have 1x your salary saved
  • 3x your salary saved at age 45
  • 5x you salary saved at 55
  • 8x your salary saved at age 67

But how much do you need to put away to save this much?

CNN says that retirees will need $15 – $20 in savings for every dollar they spend beyond their retirement income. That comes to about $300,000-$400,000 in retirement savings if your expenses will exceed social security and pension incomes by $20,00 or more.

More Serious Projections

While some say the typical 10%-15% contribution amounts will suffice, others are a bit more extreme—recommending people save closer to 20% of their income for retirement. This is due to a number of factors: unstable social security, lower pensions, volatile market conditions for stocks and bonds, and inflation. While 20% is unfeasible for most, saving as much as you can is never a bad thing.

How Much You Can Legally Save

Settling somewhere in between the multiple ideologies, we would say the more you can contribute, the better. However, there are limits for 401Ks and other retirement savings funds. As of 2015, 401Ks for those 49 and younger have a contribution limit of 18,000 every year. At 50, you can contribute $24,000. If you’re at the limit for 401K contributions, but you’re saving less than the recommended percentage, looking into an IRA or additional retirement fund is important so that you save enough. IRAs are set at 5,500 for those 49 and under and $6,500 for 50 and older.

What To Do If You’re Behind Schedule

Don’t panic. You’re not alone. Today, 46 percent of Americans are putting less than 5 percent of their annual incomes into longer-term savings. And if you know you’re off track for retirement savings, there are some ways to catch up:

  • Up your contributions. Sock away as much cash as you can every paycheck so that you’ll have a suitable amount at retirement time.
  • Plan to work a few extra years. If you started saving at 45 and plan to retire at 65, you’ll need to start putting away 27% of your salary every year until then. If that’s a problem, you can delay your retirement to 70 and put away just 10% a year.  
  • Don’t rely on investments. At the end of the day, the stock market is a gamble. One day the market is up and the other it’s plummeting. If you’re lucky, you will have earned more on your investments then you anticipated, but this isn’t something we recommend counting on.
  • Budget. Cutting costs while you’re making a steady income is a way to make sure you don’t live beyond your means in retirement.

Retirement Calculators

Retirement calculators are a great tool to help you determine where you stand in retirement savings. Using sliding scales, you can customize your information to receive an accurate calculation. Here are a few we like:

  • Bankrate calculators: These feature multiple types of calculators like IRA contributions and 401K earnings.

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