A husband and wife standing together in kitchen

How much money do you need in retirement?

Sep 6, 2022
Empower Insights

Helping you plan and save for retirement

Even as you get older, you may find yourself feeling younger at heart. Your job, family and health, as well as your financial, physical and mental well-being, can all keep you feeling strong as you grow and advance in your career. After all, there’s a reason people believe “age is more than just a number.”

But do you know what else is more than just a number?

Your retirement income.

There are a lot of factors at play when it comes to deciding the right retirement savings amount for you. Read on for things to consider as you think about saving for retirement.

How much do I need to retire?

New research from Empower shows most Americans would feel comfortable if they had around $530,000 saved in the bank. And while setting a goal of more than a half a million dollars in savings sounds great, it’s important to keep in mind there’s no one-size-fits-all amount when it comes to retirement income.

Growing your nest egg is more about saving enough to achieve the lifestyle you want. It depends on many variables, such as the expenses, priorities and hobbies you envision on having during retirement.

Do you have dreams of traveling the world in your newfound free time or moving to a warmer location? What bills do you anticipate on having every month? Will you have a mortgage or rent payment? How will you protect against inflation?  Do you have any medical conditions? When do you think you’ll collect Social Security?

Of course, these are just some of the critical questions to answer. But putting a financial plan in place now can help you prepare for what’s to come later. 

How long will my retirement savings last?

On average, a 65-year-old man today can expect to live until 84 while a 65-year-old woman can expect to live until 86.1 So, when you’re thinking about retirement, you’ll want to keep average life expectancies in mind and have enough socked away to last at least two decades.

Also keep in mind that some professionals suggest you’ll need about 80% of your current earnings to cover your cost of living in retirement. For example, if you bring in $80,000 right now, you may need $64,000 per year when you’re retired.

Whether you settle on 80%, 100% or in between, don’t forget to factor in your estimated Social Security benefits and any personal sources of income when doing the math and evaluating your situation.

How can you make sure you have enough money to last throughout your retirement? A good first step in achieving your desired retirement income is to contribute as much as you can to a retirement savings account.

What percentage should I contribute to my retirement account?

While there is no magic number, saving 10% of your annual salary is often the target many people shoot for along their journey. In fact, Empower research reveals that those who contribute 10% from each paycheck to their retirement savings account are on pace to replace 100% of their working income down the road.

Graphic. Saving for your golden years.

How do I know if I’m on the right path?

Empower’s retirement calculator can help you determine how much money you might need to fund your golden years.   

Once you’ve entered the required data, which includes your retirement accounts, outside assets, savings goals and investment strategies, the tool will show you your retirement income projection and provide tips for closing any gaps.

If your results aren’t quite what you thought they’d be, don’t worry. There are plenty of ways you can kick it up a notch when it comes to saving for retirement. Here are five tips:

  1. Don’t leave “free” money on the table. If you have an employer-sponsored 401(k) plan (or 403b, 457 or other), enroll and meet your employer match.
  2. Check out the IRS 401(k) limits and try to max out your contribution. For 2022 the IRS allows individual contributions of $20,500 per person and $27,000 (including catch-up contributions) for people age 50 and older.
  3. Consider opening an individual retirement account. If you don’t have a retirement plan at work, or if you want to put away a little more and supplement your current savings, an IRA may be a good option.
  4. Health savings accounts (HSAs) are a convenient way to set aside money for health expenses now as well as during retirement. There’s no “use it or lose it” requirement, and many programs allow you to invest your HSA money once you hit a certain threshold.
  5. Don’t be afraid to ask for help. Financial planning is sometimes confusing and complex — working with a pro can have a big impact on how confident you feel making financial decisions.

Remember, no matter what stage of life you’re in, it’s never too early to start saving for retirement. There are plenty of paths you can take, and the earlier you start, the better off you could be. 



1 ssa.gov/oact/STATS/table4c6.html

Empower Retirement, LLC and its affiliates are not responsible for the third-party content provided.

Personal Capital is an affiliate of Empower Retirement.