What’s Your (Retirement) Number?

Cheryl Lock

The Expert Says: “Robert sounds like most men his age,” says Ellen Derrick, CFP® with LearnVest Financial Planning. “At 35, you may still be paying off college loans, starting a family or trying to buy a home—and these things all take money! Retirement (because it’s so far away) sometimes takes last place in the conversation, even though it should be at the top of your list.”

Derrick explains that a 50-year-old, with only $220,000 saved for retirement, might seem behind, but by contributing the maximum to his 401(k) each year (including catch-up contributions), he could double his planned retirement income by 67.

Mary Fran Blisard, 56, Speech Pathologist

Survey Says: Women between the ages of 45 and 54 admitted to having an average of $219,000 saved in their retirement accounts.

Mary Fran Says: “This number seems low to me. I don’t have that much saved, but I do have a pension, which provides an income to meet my living expenses adequately. I also have money in real estate investments. I’ve essentially retired at this point from my regular job, but I’m still working part-time to supplement my retirement future. Based on my savings, I feel comfortable that I’ll be able to retire with an income that’s relatively close to what I’m accustomed to enjoying.”

“If you’re 45, and live happily on $50,000 a year, you may feel comfortable with having $219,000 saved for retirement.”

The Expert Says: “Having the ‘right’ amount saved up by a certain age is all relative,” explains Derrick. “If you’re 45, and live quite happily on $50,000 a year now, you may feel very comfortable with having $219,000 saved for retirement. Ongoing contributions of just 3% of your gross salary might work out to a retirement income of more than two-thirds of your current paycheck by the time you reach 67.”

However, Derrick cautions that if you’re 54 and currently making $100,000 a year, you may find that $219,000 plus the same 3% contribution rate only gets you about a quarter of your current income in retirement—and that may be less than desirable. “Mary Fran is right to fold her pension into the equation, which is what a financial planner would do when helping you to consider what your target should be,” says Derrick.

So How Much Should You Have Saved Today?

The amount of money that you’ll need for retirement will vary widely based on a number of factors, including your average salary and goals for retirement.

In most cases, an asset-to-salary ratio is used to determine if a person is saving enough for retirement. Using these guidelines, Cathey suggests the following in retirement savings for a person with a $40,000 salary, who expects to retire at 65:

  • 30 years old: approximately $56,000
  • 40 years old: approximately $112,000
  • 50 years: approximately $180,000

“It’s tempting to delay saving for retirement until you have a bigger salary, but the earlier you start, the more money you’ll have due to compounding,” she says.

If, like Carla, you have a workplace retirement plan, such as a 401(k), check to see whether your employer matches the money you contribute. “That match is additional compensation given to you just for socking away money for retirement,” says Cathey. Translation: By not contributing to an account with a company match, you’re passing up free money!

If your employer doesn’t match contributions, you can open an account on your own, such as a Roth or Traditional IRA. For more guidance on how to navigate retirement savings, visit the Knowledge Center.

  • Danielle Milanese

    I’m 28 years old and I haven’t even started saving for retirement. I feel so behind!

    • http://twitter.com/cooperetcastro cooperetcastro

      I was thinknig the same thing.  I have started but it barely clears $1000.  $37000 seems like a crazy amount to me.

    • Stephanie

       Start today!!  No excuses.

      • Flady

        I agree! Even starting with a little now can go along way in the future. I started with a Roth Ira at 25 and I’m amazed how fast it has added up.  Since you can only contribute a limited amount (5500 in 2013) it didn’t seem so daunting.  Just adding $20 a paycheck is better than nothing!

    • Mara

      Same here! I was waiting to be out pf debt and have a fully funded emergency fund…I am already debt free (since a month ago yay!!) and the emergency fund is on its way…I supposed to get a raise this year if that goes through I am gonna start putting at least the matching % for my retirement even if the emergency fund is not fully funded yet

    • http://twitter.com/debtperception Kasey Oliver

      Ditto (well, I’ll be 28 in June).  I probably won’t be able to save for retirement until after I’ve paid off about half of my debt.  That won’t be for a long time, so I’m scared I’ll be working until the day I die!

  • Stephanie

     I am 45, two children in college, getting divorced (which I am happy about) and way behind in retirement savings.  I chose to work part-time and raise my children.  In the next six months I will be graduating from school and starting a new career.

    I intend to be an aggressive saver!!  At the same time I pledge to live as cheaply as possible.

  • Ana

    “an asset-to-salary ratio is used to determine if a person is saving enough for retirement” So I’m confused. Is the amount listed, $56,000 for my age bracket, the amount I should have saved in a retirement account or is that the amount of assets I should have? Like retirement savings plus equity in a home, a car, etc. 

  • Britt

    wow this article is so depressing for me!  I’ve been saving for retirement since 23.  I’m 28 and have nowhere near $56k in my retirement accounts.  Maybe it’s because I live in an expensive city and don’t make an expensive city salary.  Time to start job hunting I guess!

    • Shannon

      I started at 23 and even though I’m a couple years older (31), I feel the same! I have a Roth and I have a plan through my employer but they don’t match it unfortunately. I thought I was doing okay but now after reading this I realize I’m not even close to what I should be!

    • Cathy

      Same. The first few years of my career I didn’t make nearly as much as I do now. So I did a calculation of the 12% rule (that you should be saving around 12% of your salary, including your employer’s contribution or pension) on the various salaries I had over the years (including the length of time I held those lesser paying jobs), and it makes me feel less “behind”. Keep in mind that your savings over the next couple years will also compound a bit by the time you’re 30. So if you have a 401K or a Roth where your money is invested, you can expect to see the number go up. 

  • Lauren

    I sometimes struggle with these articles. When you say $40k annual salary is that pre or post tax? I also feel like an increasing number of women are going to grad school and paying for their own education – I’d love to see more articles on how to balance priorities when you have school debt. 

    • Guest

      I feel one of the key issues is what sort of debt is an education worth.  It seems not many people (and women especially) are doing a cost vs benefit analysis of grad schools (or degrees in general).  Then, they amass more loans than they’ll ever be able to reasonably pay off in hopes that they’ll be eligible for a higher salary in this increasingly shrinking job market.  If the education is to increase earning potential, there are plenty of decent paying careers that don’t require a degree.  If the education is for enrichment’s sake, there are cheaper ways to educate yourself that don’t require so many student loans! 

      • TexasMom2012

        Two Words: Night School.
        That is how I got a BS with only $2000. in debt. Although it took eight years.

    • laurashin

      Hi Lauren,

      This article addresses that question: http://www.learnvest.com/knowledge-center/retirement-savings-or-debt-how-to-prioritize-your-financial-goals/

      Let us know if you have any others!


  • Elle

    What if you want $80,000 to live off of in retirement?  Do you just double all the numbers?

  • LeeLee

    This past year, I was concerned that I wouldn’t be prepared to retire comfortably, so I bumped up my 401k contribution a little more and I started socking away some money in tax-free monthly payout bonds.  At the age of 28, I have $57k in my 401k and $7,600 in bonds.  This article makes me feel less nervous about being able to retire. 

  • KatelinM

    This makes me a little depressed. I’m 23 and working at my first job (think $29,000/yr). I started to save for retirement in a Roth because I’m not eligible for my employer’s program yet (they won’t match when I do become elligible). But, I’m only putting $150 a month away because I have about $40,000 in student loans. I’m putting every extra penny I have towards my debt but I’m afraid that I will never be able to max out my IRA contributions. At this rate, I will never be able to afford to retire :(

    • Britt

      Katelin – this was totally me.  Moved to NYC and started out making $27k a year.  I put away about $100/month into a Roth as well (no 401k at my old company) and even though it doesn’t seem like a lot it adds up!  Slow and steady (and consistent) works.  As you get salary increases slowly increase your contributions and you’ll be maxing it out before you know it!

      • TexasMom2012

        Yes. The most painless way to increase your contributions to your retirement is to dedicate a % of each raise to those savings. This increases your savings without decreasing your take home in a noticeable manner.

    • facepalm

      Oh yeah this is exactly how I started just a couple years ago, you’re in good shape. Just add to it when you can and you’ll see how quickly it will grow. I’ve been really pleasantly surprised in just a couple of years.

    • makaha wahine

      You will earn more as you gain more knowledge in your career.Just keep doing what you are doing and learn more about finances and investing. Time is on your side to take a few chances and be less conservative. Good luck!

  • Rina

    I’m really worried now. I’m trying to go back to school, but I have a debt of roughly $900 keeping me from being able to apply for classes, I make about 12,000 a year working ~30h/w and have NO retirement or emergency savings. I’m 23- this feels like a bottomless pit for me!

  • Ashley W

    I’m contributing to a Roth 401K with company matching. I was given the advice that if I think (a) I’ll be in a higher tax bracket when I retire and/or (b) I think tax rates will go up by the time I retire (I’m 25 now), I should contribute post-tax to a Roth 401K instead of traditional. Couple questions – does anyone know if company matched contributions are pre- or post-tax? Also how would the fact that at least part of my 401K is post-tax affect the target savings in that chart above? With nearly $18K saved so far I feel like I have a decent start…

    • Sophia

      Hi Ashley,
      Employer matching is made into the traditional 401(k) with pretax dollars, as opposed to the Roth 401(k), and accumulates in a separate account that is taxed as ordinary income upon withdrawal.  Hope that helps!

  • Liz

    What are the best online retirement calculators?

  • liz

    I’m 33 and have $63K in designated retirement funds (Roth and regular IRAs). Unfortunately, I am not eligible for the 401K until I’ve been here for a year and my contract is only 1 year (dumb, right?), so my only choice is the Roth right now, which has a max of $5500/year, so any extra I can contribute goes to a regular investment account.
    For those of you who have debt: pay off high interest loans like CC debt immediately, but before worrying too much about student loans, add to retirement funds because the growth of your investment in a low cost mutual fund will exceed the interest owed on most federal and many private student loans, and you can’t make up for lost time.

  • Peter

    Learn how compound interest can help you. I wish I knew about it when I was 23. Go to http://investor.gov/tools/calculators/compound-interest-calculator
    and punch in some numbers, whatever you can start with, what you can contribute monthly, how many years you have to the age you want to retire, and figure an annual percentage rate of 8%. That’s low for high risk stocks but high for low risk stocks. Invest every month and forget about the money. Really, you cannot touch it. Not for a new home, not for an emergency, not for anything. You will be amazed how much you can save before you retire.

  • Maury Miloff

    I would say the one key number you want to know regarding your retirement is 3% (generally speaking, based on conservative predictions of portfolio growth of 2.5% above inflation). As I recall, this is the amount your portfoliio would generate (after taxes of 20%) indexed to inflation over 40 years. For example, $500,000 produces $17,500 per year. After 40 years all the capital is gone. Withdrawal at the rate of 4% would reduce the number of years to around 30 years. Of course, a higher return above inflation would up the number of years or the amount you could withdraw.

  • JBear

    Both my wife and are 51.
    I make $50,000 and have accumulated $210,000 in my 401K. I also have $12,000 in a Roth. I also will receive a modest pension of $12,000/year at retirement. Currently I put 23% of my income into the 401K
    My wife makes $59,000 and has accumulated $268.000 in her 401K and contributes at 19%. She also has a Roth worth $12,000. According to this article we should be OK.

  • Kim

    Here is my life example for you younger women, I am retired at 50. Been married since I was 19. We started saving 10% of our pay at 27, had two children, paid for their college and now at 53 we have $880,000 in our retirement accounts plus an 8 month emergency fund. We didn’t hit $100,000 until 37. Company matches the first 5%. Never thought we would do as well as we have. My advice would be slow and steady. Educated yourself about your finances and take control of your own finances. No one cares more about your money than you. Start with what you can and don’t stop contributing, even if you think you can’t. Something is better than nothing. Good luck with your future. It is in your hands. – Kim

    • ssvatik

      I am with you Kim. Start early and pay yourself first.
      Great reads for all of you are, “The Millionaire Next Door” and “The Automatic Millionaire”. Yes you too can get there and faster than you think.

      • facepalm

        Millionaire Next Door was such a good read. I also recommend it. Really takes that “keeping up with the Joneses” idea and just exposes it for the nonsense that it is.

  • Holly

    A good resource to know what your number is ING. They have a calculator based on what type of life you want to live in retirement, your current age and age when you expect to retire. I did that when I first started my company’s 401k, and I was dramatically behind! I expect I will not live the plush life I wanted in retirement, but I have started the trek towards a true retirement savings, and I increase my contribution every year when I get my pay bump. This way I increase the percentage they take out of my check, but don’t really notice the amount.

  • ksgirl73

    Doesn’t it depend on what part of the country you live in and your lifestyle? I would think kids would factor in as well as if you own or rent and if you own if your house is paid off. Seems hard to predict without all these other factors taken into consideration.

  • https://googlear.contently.com/ ChristaJocelyn

    I’ve been saving responsibly for retirement for a long time. The amount
    of money that women in my age bracket have saved seems about right—and
    I’m actually a little above that, thanks to my company’s generous 401(k) matching policy.


  • http://www.enchumbao.con MrEnchumbao

    I rather multiply what I expect to be my annual expenses by 25 to find out what my retirement number is because I don’t spend 80-95% of what I make. We want to retire early so we’ve become extreme savers. Thinking that I’d need 80% of what I now make, in retirement, would give me a very inaccurate number.