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How Much is Enough??

August 22, 2017

How much is enough… A major retirement savings question…


If you look back at our last blog titled Where Will Your Retirement Money Come From, we covered the various sources of retirement income. Now it’s time to take a look at how much you will need saved for retirement, a question we regularly receive. The simple answer is it depends.


Three of the most important factors to consider for retirement savings are when you will retire, how much will your retirement lifestyle cost, and how long you will live in retirement. Obviously, the answers to these questions are not always incredibly clear but there are some basic savings habits that are considered conventional wisdom in the financial planning community.



To put it simply, the vast majority of adults are not saving nearly enough for retirement. We understand that saving money can be difficult, especially with other competing interests. One must remember that nobody will pay for your retirement so it’s incredibly important that you also take care of yourself and your future. As previously mentioned, the amount you should save for retirement depends, however, we can provide some very general targets. Within the financial planning community it’s generally accepted that one should set a savings goal of 10% - 15% of pretax earnings. In your early lower earning years you may only be able to target 10% but as your earnings increase so should your savings percentages. Once you are able to save 15% of pre – tax earnings you should continue pushing the bar, further increasing your savings. Fidelity recently published** what they call their retirement savings factors to provide a general rule of thumb of how much you should have saved for retirement at each age as detailed below, assuming you plan to retire at age 67.


  • Age 30 – one times your annual salary
  • Age 40 – three times your annual salary
  • Age 50 – six times your annual salary
  • Age 60 – eight times your annual salary
  • Age 67 – ten times your annual salary


Again, these targets are general in nature and will vary based upon your age at retirement, retirement lifestyle, and retirement longevity. These targets may provide for a solid review of your current retirement savings and if you need to make adjustments. It’s imperative that you pay yourself first and no matter what your age, begin planning for your retirement years.