The short answer most advisors give is "save 15% of your income," and it's a decent starting point — but the right number for you depends on your age, current savings, and when you want to retire.
Start with the 15% rule
If you're 30 years old earning $60,000/year and start saving 15% of income ($750/month, including any employer match) into a retirement account averaging 7% annual returns, you'd have roughly $915,000 by age 65. That's enough, under the 4% withdrawal rule, to generate about $36,600/year in retirement income — before Social Security.
Why starting age matters more than amount
Compounding rewards time more than contribution size. Compare two savers, both contributing until age 65 at 7% average returns:
- Starts at 25, saves $300/month for 40 years: ends with about $719,000
- Starts at 35, saves $300/month for 30 years: ends with about $340,000
The first saver only contributed $36,000 more in total but ended up with over twice the balance — purely from 10 extra years of compounding.
Working backward from a target
A common goal is replacing 70-80% of pre-retirement income. If you currently earn $80,000/year and want $60,000/year in retirement income (adjusted for paid-off mortgage and lower expenses), the 4% rule suggests a target portfolio of $1.5 million. Starting at 30 with $0 saved, reaching that by 65 at 7% returns requires roughly $1,000/month in contributions.
Adjusting if you're behind
- Increase your rate gradually — bumping contributions by 1% each year when you get a raise rarely feels painful
- Use catch-up contributions — once you turn 50, you can contribute an extra $7,500/year to a 401(k) beyond the standard limit
- Delay retirement by even 2-3 years — this both adds contribution years and shortens the number of years your savings need to cover
Run your own numbers
Your real target depends on your current age, savings, expected retirement age, and return assumptions. Use the Retirement Calculator to find your specific monthly savings target.