2 Most Common Questions


There are some questions that we hear again and again as we discuss retirement with plan participants. The first is “How much do I need to save for retirement each month?” and the second is “How much money do I need to have when I retire?”

Here is a simple answer. If you start saving at age 25, when you first enter the work force, you should save at least 8.5% of your gross pay. If you save that much year after year, and if you invest it so that you get an average return of 6%, you should have enough money for retirement at age 65. That amount, coupled with your social security, should allow you to continue to live the lifestyle you could afford just prior to retirement.

But what if you are late to the game, and didn’t start saving at age 25, or have been saving less than 8.5%? Again the answer is simple – you need to save more. How much more? The chart below can help. On the left hand side of the chart are numbers from 1 to 10. On the bottom are numbers representing your age.

The way to use the diagram is to find your age and then read up to the blue line. Where the blue line crosses your age, look to the left to see the corresponding number. That number, multiplied by your yearly gross income, is how much you should target for your savings at that point in your life. Someone, for example, who is 45 might have a retirement savings goal of about 3 times their yearly income. A 35 year old might be trying to build a retirement account worth 1 times their yearly income. Someone who is about to retire might be looking to have about 8 times their yearly income to get them through the rest of their life.

These are general guidelines. They are not meant to be specific for everyone. But they do give ballpark answers to the questions everyone asks. They are the start to a conversation that will last your entire career.

We appreciate the opportunity we have to work with you!

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