There is no single right number, but there are reliable guidelines, and the most important variable is not how much you save. It is when you start. This guide covers the benchmarks, the 2026 limits, the employer match, how much you might need, and the decisions near retirement that change the answer.
Start early: the effect of a decade
Saving 500 dollars a month at a 6% average return until age 67 produces very different results depending on when you begin:
- From age 25: about 1.14 million dollars, from 252,000 dollars of contributions.
- From age 35: about 579,000 dollars, from 192,000 of contributions.
- From age 45: about 273,000 dollars.
Starting at 25 rather than 35 means paying in 60,000 dollars more and ending up with almost twice as much. The extra decade of compounding does the work. If you are older, the lesson is not that it is too late; it is that every year you start sooner is worth a great deal.
The benchmarks
Fidelity suggests saving at least 15% of your gross income for retirement, counting any employer contribution, starting by age 25. Its milestones for savings at each age are about one year of salary by 30, three times by 40, six times by 50, eight times by 60 and ten times by 67. Fidelity also suggests that if you are behind, you raise your savings rate by at least one percentage point a year, which most people barely notice in their paycheck.
2026 contribution limits
- 401(k), 403(b), most 457 plans and the Thrift Savings Plan: 24,500 dollars.
- Catch-up contributions from age 50: an extra 8,000 dollars, or 11,250 at ages 60 to 63 under the SECURE 2.0 Act.
- IRA: 7,500 dollars, plus 1,100 from age 50.
Always take the full match
If your employer matches, say, 50 cents per dollar up to 6% of your salary, contributing that 6% earns an immediate 50% return. Nothing else in personal finance pays like that. Contribute at least enough to collect the whole match before paying extra toward any other goal except high-interest debt.
Traditional or Roth?
Traditional contributions reduce your taxable income now and are taxed when withdrawn. Roth contributions are taxed now and come out tax-free in retirement. If you expect your tax rate to be higher later, or you are early in your career on a lower income, Roth contributions are attractive. Many people split their savings between both to keep options open.
How much will you need?
Planners often start from replacing 70 to 80% of your pre-retirement income, because some costs, such as commuting and saving for retirement itself, disappear. Social Security or a pension covers part of it; your savings cover the rest. As an illustration, replacing 60,000 dollars a year of spending for 30 years, with a 5% return and 2.5% inflation, needs roughly 1.27 million dollars at retirement.
The 4% rule offers a quick cross-check. Based on William Bengen's 1994 study of historical US returns, it suggests that withdrawing 4% of a portfolio in the first year, then raising the amount with inflation, has historically lasted around 30 years. By that rule, a million dollars supports about 40,000 dollars a year. It is a starting point, not a guarantee, and many planners use a lower rate for early retirees or longer retirements.
Decisions near retirement
- When to claim Social Security. For anyone born in 1960 or later, full retirement age is 67. Claiming at 62 permanently reduces the benefit by about 30%; waiting beyond 67 increases it by 8% a year, up to age 70.
- Sequence of returns. A market fall in the first years of retirement does more damage than the same fall later, because you are selling investments to live on. Many retirees keep a year or two of spending in cash for that reason.
- Healthcare. Retiring before Medicare eligibility at 65 means paying for health insurance yourself, which can be a large cost.
Find your own number
The retirement calculator has four tabs: how much you will have, how much you need, how long your savings will last, and how much to save each month to hit a target. Try a cautious return, such as 5%, alongside an optimistic one, and plan around the cautious result.
Estimates only, not financial advice. Contribution limits are the IRS figures for 2026; returns are not guaranteed.