How Much Should You Save for Retirement?

By the TidyTally team · Last updated October 21, 2026

"How much do I need to retire?" is one of the hardest money questions because the honest answer is "it depends." But there are well-known guidelines that give you a starting point, and a clear method for turning them into a number that fits your own life. This guide walks through the most widely used rules of thumb, their limits and a plan you can start today.

Start with the savings-rate guideline

A frequently cited rule of thumb is to save about 15% of your gross income for retirement each year, including any employer match. On a $70,000 salary, that is $10,500 a year or about $875 a month. Starting in your twenties, this level of saving is often enough to maintain your lifestyle in retirement when combined with Social Security. Starting later usually means saving more.

If 15% feels impossible today, begin where you are — even 5% — and increase by 1% each year or with each raise. The Retirement Savings Calculator compares different contribution levels so you can see what each additional percent is worth.

Benchmarks by age

One widely cited set of guidelines, from Fidelity, suggests having roughly 1× your annual salary saved by age 30, 3× by 40, 6× by 50, 8× by 60 and 10× by 67. These are approximations that assume you retire around 67, save 15% annually and invest in a mix of stocks and bonds. They are guideposts, not pass-fail tests; many people fall behind at some point and catch up later.

The 4% rule

The 4% rule, derived from research by financial planner William Bengen in the 1990s, suggests you can withdraw about 4% of your portfolio in the first year of retirement, then adjust that dollar amount for inflation each year, with a high likelihood your money lasts around 30 years. Flipped around, it implies you need about 25 times your annual spending: a $1,000,000 portfolio supports about $40,000 in the first year.

It is a rule of thumb, not a guarantee. Longer retirements, lower expected returns, market declines early in retirement and higher inflation can all change the picture, and some planners suggest a lower or more flexible withdrawal rate. See our guide on inflation and your savings for why spending power matters.

Social Security and other income

Social Security was designed to replace a portion of your pre-retirement earnings — roughly 40% for an average earner, according to the Social Security Administration — so you typically need your savings to cover the rest. Your own estimate is available in your account at SSA.gov. Pensions, rental income, part-time work and annuities can also reduce the amount you need from savings.

A four-step way to find your number

1. Estimate your retirement spending. Many planners start at 70–80% of your pre-retirement income and adjust for your plans — healthcare, travel, housing. 2. Subtract guaranteed income such as Social Security and pensions. 3. Multiply the annual gap by 25 (the inverse of the 4% rule) to estimate the portfolio needed. 4. Work backward to a monthly saving amount using the retirement calculator, your time horizon and a reasonable return assumption.

Where to save first

A common order is to capture your full employer match in your 401(k), then fund a Roth or Traditional IRA, then return to the 401(k) for additional savings toward its higher limits, while keeping an emergency fund so you never need to raid retirement accounts early.

If you are behind

Do not panic. Raise your contribution rate, take advantage of catch-up contributions after 50, consider working a few extra years — which both adds savings and delays withdrawals — and delay claiming Social Security, since benefits grow for each year you wait past full retirement age up to age 70. Small changes made consistently over a decade change the outcome far more than people expect.

Frequently asked questions

Keep reading

• 401(k) Basics: How It Works and How the Match Works
• Roth IRA vs. Traditional IRA
• Inflation and Your Savings