According to a recent poll by Northwestern Mutual (, which surveyed 2,003 adults as part of their 2018 Planning & Progress Survey, 21% of Americans polled have nothing saved for retirement, and a third have less than $5,000. 33% of Baby Boomers (born in 1946 to 1964) have $25,000 or less in retirement accounts. Considering that the youngest Baby Boomers are already 54, that’s not much time to accumulate the funds needed for retirement.

One of the first questions I hear from new clients is typically, how much should I save for retirement? This seems to be one of the biggest fears or worries that many people have. I am a firm believer that knowledge is power – if you know the details of your situation, you can make more informed choices. Confronting this question may be difficult or bring up feelings of shame or inadequacy, but a financial advisor can help provide you with information specific to your situation and also, provide you with practical advice so you know exactly what steps you should take right now to plan for the future.

Unfortunately, there is no one, easy answer to the question of how much you should save, since everyone’s situation is different. Here are a few ways to think about how much you should save.

Conventional Wisdom
AARP’s website (American Association for Retired People has a lot of information about planning for retirement. They reference conventional wisdom: “you should aim to have a nest egg of $1 million to $1.5 million. Or that your savings should amount to 10 to 12 times your current income.” This might be helpful for determining where you want to end up. But, what does this look like over time?

Set Aside a Portion of Income for Future Use
Fidelity provides information about saving for retirement with a rule of thumb they publish on their website ( “Aim to save at least 1x your salary by 30, 3x by 40, 6x by 50, 8x by 60, and 10x by 67.” So, say you make $80,000 per year. At age 30, according to this rule of thumb, you should have $80,000 saved. At age 40, you should have $340,000 saved. At age 50, you should have $480,000 saved.

Another statement from the website: “Aim to save at least 15% of your income annually”. Saving 15% of an $80,000 salary, for example, is $1,000 per month or $12,000 per year. Over time, that can really add up.

Einstein’s 8th Wonder of the World: Compound Interest
The reason why it’s so important to start saving early is that your money will have longer to grow if it’s invested wisely. Compound interest combines growth, with time. In investment terms, compound interest is the interest earned on the initial principal you put in, and on the accumulated interest of previous years. According to folklore, Einstein called it the eighth wonder of the world. The longer your money can work for you, the more it can potentially grow.

Your Specific Situation
Of course, your situation is probably a lot more complicated than these or any other rules of thumb can fully address. To get to an idea of how much you should save, there are several factors to consider:
• How much do you plan to live on in retirement?
• At what age will you retire?
• How long will you live after you retire?
• What investment return and inflation levels do you expect?
• What is your tax liability now, and what do you expect it to be in the future?

A quick google search reveals several online calculators that permit you to input your own assumptions. But to really get a complete picture of your personal financial situation, a financial planner can help. Financial planners can work with you to answer your questions and in the process, build a clear and practical path towards achieving your financial goals.

Contact Jacki Liautaud at Tree Fort Financial ( for more information.

The information and illustrations presented above is hypothetical and does not represent the return on any particular investment nor specific financial advice. All investing is subject to risk, including the possible loss of the money you invest.

Content provided by Women Belong member Jacki Liautaud