Am I Saving Enough for Retirement?


What’s your retirement number? Hard to say, isn’t it? Answering the question, “Am I saving enough for retirement?” is akin to planning for a vacation you’ll be taking some 20, 30 or even 40 years from now. You don’t know where it will be, how much it will cost or how long it will last, but you’re tasked with saving a chunk of every paycheck toward that trip until the day you embark on it.

See if you know the answer to these three questions to determine whether you’re saving enough for your retirement:

  1. What percentage of your gross salary should you be saving to finance a comfortable retirement?
    Answer: Many financial professionals recommend 15 percent. But that can include employer contributions to your 401(k), so don’t worry – you don’t have to save it all yourself. The old rule of thumb was to save 10 percent of every dollar you earned for a rainy day. But with traditional pensions disappearing and workers becoming more responsible for financing their own retirement (including ever-increasing health care costs), many financial experts recommend saving more these days.
  2. What percentage of your preretirement income should you aim to generate from your nest egg in retirement?
    Answer: Retirement planners generally recommend that you have enough savings at the end of your working life to replace 70 percent to 85 percent of preretirement income. The targets take into account that you’ll no longer be saving for retirement, getting dinged for payroll taxes or covering work-related expenses, such as commuting costs.
  3. How big should your nest egg ultimately be in comparison to your final salary?
    Answer: Assuming you intend to retire at age 65, aim to accumulate savings equal to 8 to 10 times your annual salary. Together with Social Security benefits, that should be enough to replace about 85 percent of your preretirement income. If you have other sources of income — such as a traditional pension or a part-time job – or if you plan to significantly reduce your spending in retirement, you can get by with saving less.

If you are on track to hit the answers to the three questions above, you’re well on your way to answering the important question, “Am I saving enough for retirement?”
Try these helpful calculators to see if you’re on the right track:

By the editors of Kiplinger’s Personal Finance, February 2016

Registered Representatives offer securities through Mutual of Omaha Investor Services, Inc. Member FINRA/SIPC. Investment advisor representatives offer advisory services through Mutual of Omaha Investor Services, Inc.

Item #239257

Related Articles


3 Ways to Help Boost Your Retirement Account

Are you playing catch up on saving for retirement? Do you wish you would have started saving sooner? While investing early in your retirement accounts is good advice, there are still ways to grow your retirement savings as you get closer to retirement age. Since you can’t go back in time and start saving sooner, […]

Read Article


How to Retire Early

Do you have a goal to retire before the average retirement age? Many people work toward the traditional retirement age without realizing there are other options. There are things you can do now to help you retire earlier than you think. Six Things to Do Now to Help You Retire Early Set your personal goal […]

Read Article


Top Places to Retire

Have you been saving your entire career to retire with sandy beaches and ocean breezes? Or dreamed of spending free time in a remote town away from the hustle and bustle? You’re not alone. Three out of five Americans want to spend their retirement in another city or state. And, 50 percent of people aged […]

Read Article