How Much You Should be Saving for Retirement Right Now

Saving for retirement can be a challenge at any age. Here are tips, broken down by decade, of how much you should be investing for retirement.

According to a recent article at Time published this month, 1 in 3 Americans have nothing saved for retirement. Zero. Nada. Nothing. I don’t know about you, but to me, it’s really scary that many aren’t saving for retirement.

Retirement is one of those things that everyone knows they should think about and save for, but the process seems overwhelming so many wait or never really start. For those not well versed in personal finance, the different types of retirement accounts, investments and all the unknowns make it hard for many people to just start saving for retirement.

So, if you’re someone who needs a little bit of a head start or some knowledge on just how much you need to save in each decade of your life, keep reading.

Saving for retirement can be a challenge at any age. Here are tips, broken down by decade, of how much you should be investing for retirement.

How Much Should You be Saving for retirement?


The Center for Retirement Research at Boston College advises people to save 15% of their income each year in order to reach their retirement goals. While 15% might seem like a lot, even starting with 5% or 10% will place you in a better position than the majority of the population.

The best way to save this percentage of your income is to do so automatically. I am a big fan of automation, and I pay all of my bills and make monthly investments using automation all the time.

The best time to start automating your investing is to do so when you first start your job or start a new job – through a 401(k). If you have a certain percentage of your income automatically coming out of your check each month, you’ll never know the difference. If the thought of automating your retirement savings seems overwhelming or you don’t have access to a 401(k), an automated retirement program like Betterment or Wealthfront can take all the work out of it for you, making it that much easier to save for retirement.

How Do You Calculate What You Will Need?


Saving 15% of your income every year is a great place to start when it comes to retirement planning, but it’s also important to know why you chose this number and what it will mean in terms of future retirement savings.

You should think about how much money you want during your retirement years. Do you want to live on $100,000 a year? Do you think you could live on $50,000 a year? Do you want to travel and see the world? Do you just want to enjoy sitting outside your garden and reading a book for pleasure?

These are important questions because you need to know how much money you want to have in the future to know how much to save now.

I recommend using a retirement calculator. Vanguard has one where you can use a sliding scale to see how much you will need to save to have a certain amount of income while you’re retired. You can even include estimated social security income, so it’s a pretty thorough calculator.

Let’s take it a step further though and look at what people should do during each decade of their life to be truly successful when it comes to saving for retirement.

In Your 20s


I’ll turn 29 next month, and it’s hard to believe that I’m inching closer to 30 all the time. I already know that I’m behind on my retirement savings after spending most of this decade being in school and starting a business. I’ve never had a job that sponsored a 401(k) but I’ve managed to start the retirement savings process on my own using an IRA.

For those in their 20s, I recommend saving the max in your 401(k) that is allowed at your job if you have one. I also recommend saving in a Roth IRA. Although you won’t get the tax benefit of a traditional IRA every year, your future self with thank you if you open a Roth now while you’re young so you get the benefit when you’re older.

If you’re in a job that doesn’t offer a 401(k) plan, there are many options available to invest – even if you have little money. You can open an account with Motif Investing, for example, for as little as $250 and get started on planning for your retirement.

Many people might read this and say that they can’t start investing in their 20s because they have student loan debt. My advice for you is to aggressively pay off your debt as fast as possible. One way to do that might be through securing a lower interest rate on your student loans. There are even online options like Credible and others that can help you search for a lower rate on your student loan debt. The longer you hang on to your debt, the less money you can put towards retirement in the future. The sooner you get rid of it, the more you can focus on building your wealth for the future.

Saving for retirement can be a challenge at any age. Here are tips, broken down by decade, of how much you should be investing for retirement.

In Your 30s


Similar to when you’re in your 20s, you should be maxing out your retirement accounts as much as possible, including a 401(k) through your work and a Roth IRA in addition to it. You should strive to save 10-15% of your income, and as mentioned above, the best way to do so is to save automatically.

Many people get married and start families in their late 20s and 30s. Remember that you can start saving for your children’s future too in tax advantaged college savings accounts. While you’re thinking about saving for retirement, any extra money above saving 15% of your income could be allocated to helping pay for your children’s education in the future.

Saving for retirement can be a challenge at any age. Here are tips, broken down by decade, of how much you should be investing for retirement.

In Your 40s


Once you’re in your 40s, it’s time to amp up the retirement savings even more. This could mean increasing your contributions to 20% of your income (especially if you started saving late) or diversifying your investments by having rental properties, for example.

Either way, your 40s are a great time to really organize your finances and make sure you’re saving enough for your future. It’s also the perfect time for a little #adulting and organizing whether that means finally paying off debt, buying a house or finally figuring out how to do a budget. Personal Capital is a great tool to help you do just that as it tracks your net worth and assures you’re in the most suitable investments possible.

Saving for retirement can be a challenge at any age. Here are tips, broken down by decade, of how much you should be investing for retirement.

In Your 50s


If you’re in your 50s and haven’t started saving for retirement yet, remember that it’s never too late. Now is a good time to sit down with a financial advisor or financial expert to see how much money you will get in social security benefits and how much you will need to save in order to increase the monthly income you will have in retirement when combined with those benefits.

This is also the time where you can start thinking about other income streams. If you own a larger home, can you downsize and invest the difference to beef up your retirement accounts? Is there a part-time job that you could do to help increase your monthly income while you are retired? The options are truly endless.

Ultimately, there are many ways to think creatively about saving for retirement and make sure you can have a wonderful experience even if you started later than everyone else.

By focusing on saving for retirement when you are young and making smart decisions throughout your life, you can absolutely be the type of person who gets to retire early and spend the rest of your life doing things you truly enjoy.

Saving for retirement can be a challenge at any age. Here are tips, broken down by decade, of how much you should be investing for retirement.

Is your retirement planning on track? Do you have traditional investments, rental properties or something different? Do you plan to retire at a certain age or work until you die? I want to hear from everyone!

If you enjoyed this post, please consider subscribing to the RSS feed.
The following two tabs change content below.
Catherine Alford is a professional public speaker and freelance writer who covers family, finance, and freedom. Check out her blog, BudgetBlonde, and her bio at


  • I think I’ve recently reached 7 percent. Each year I try to up it 1 percent when my salary increases. I’ve always contributed the minimum for my match which has certainly helped.

  • I’m in my 20’s and think 10% is a good amount. The only reason I wouldn’t put more is because I plan to retire early. So I don’t want most of my money to be tied up in an account that penalizes early withdrawals.

  • Michelle says:

    Love this! More people should definitely be saving for retirement. We’re on track to be financially independent by next year, and we will “retire” before 30, but I will probably continue working, haha.

  • Michael says:

    Nice post, Catherine!

    It is always good to begin with the end in mind – (a) nest egg required (b) burn rate.

    In my mid 20’s, I had a nest egg target. I am in my late 30’s now and my target has crept up. I am on track to meet my new target.

    There are several calculators to determine nest egg required online.

    If you want to do it from scratch, you can easily do it in Excel if you understand the time value of money.

  • I’ve been thinking about decreasing our retirement savings percentage actually… We started out saving 10% at 22 and now save 18% at 30 (all post-tax, no match) so I think we had a good start. It’s so hard to tell what we’ll need in retirement since we don’t yet own a home. I’ve been considering taking our retirement savings down a few percentage points to save more for a down payment instead. Tough call!

  • Even though my wife and I are far from retirement, we seriously consider putting money in our retirement accounts. After all, time flies and the next thing you know, retirement is knocking.

    Currently, we are saving 40% of my income. My wife is not working right now and is taking care of our little once. I aspire to improve our savings until she gets a job. When she does, we will tremendously save more.

  • I feel so behind to what I should have already had at the age of 30 years. I have maxed my contributions to 401(k) and felt that I have to increase my investment and portfolio to catch up.

  • My work offers dollar-for-dollar matching on up to 10% of my income. Crazy! Problem is, 10% of not much is still not much. Nevertheless, I’m taking full advantage of it while I can. I finally feel like I’ve put on my big girl undies for once!

  • Great post!

    We are in our early 40’s and currently contribute 25-30%. Fortunately, we started in our 20s, but only put in about 6% for several years until our mid 30s when we gradually increased it. Our expenses are moderate, so we are hoping to retire by 50.

Leave a Reply

Your email address will not be published. Required fields are marked *