Maximize your retirement savings

Here's what to know to make sure your savings strategy is working as hard as you are.

Saving for retirement is a marathon, not a sprint, and it's not always easy to know if you're on the right track. These guidelines can help you stay on course—or get up to speed. We recommend you save 15% of your income—including employer matching contributions—each year that you work until you turn 67.1

If you're in your 20s or 30s, we recommend that you save an amount equal to your salary by age 30. But don't worry if you haven't—just get started as soon as you can.

If you're in your 40s or early 50s, saving is important because you're closer to the time when you'll need the money. We recommend you save 3 times your salary by age 40 and 6 times by 50.

If you're less than 15 years from retirement but short of your savings goal, try to increase the percentage of your income that you save because the finish line is in sight.

At any age, making—and sticking to—a budget can help you cut spending and boost saving. Investing appropriately is also essential for maximizing your retirement.

Read more about investing and saving for retirement

Guidelines for saving

Maximize your 401(k) employer match

If your employer offers a retirement plan, make it your first priority take advantage of the entire match—it's basically "free" money. Companies that offer such plans typically match your contribution dollar-for-dollar or 50 cents on the dollar, up to a certain percentage of your contribution.

Check to see whether you're currently contributing enough to get the full match and if you're not, consider adjusting your contribution amount to get that "free" money.

Aim to save 15% per year

Our rule of thumb is to try to save 15% of your pre-tax income for retirement. That includes your contributions to workplace plans and any additional IRAs, in addition to any matching or profit-sharing contributions from an employer.

Starting early, saving consistently, and investing wisely is important, as is saving in tax-advantaged retirement savings accounts such as 401(k)s, 403(b)s, Health Savings Accounts (HSAs), or IRAs. If you're not yet able to save the full 15%, don't worry—just try to make small cuts in everyday spending. Even saving an additional 1% more has the potential to add up.

Automate your contributions

One of the easiest and most popular ways to make saving a regular habit is to set up automatic contributions. We recommend that you set up automated contributions to your retirement accounts that are timed with your paycheck, so you never have to think about it.

Automatic contributions make sure you prioritize retirement and spread investment risk over time.

Know where you stand for retirement by answering some brief questions. You'll find out if you are on the right track to meet your goals and what steps you should consider as you build your savings.

Balancing retirement with other goals

You can only stretch your income so far—and competing priorities can make your head spin. Here are some guidelines for how to meet multiple money goals without pulling your hair out.

Remember that time is a key ingredient in retirement saving. If you choose to save less now, you have 3 choices: Save more later, work longer, or spend less in retirement—or some combination of these.

Get tips for how to list your priorities

  • Tackle the critical stuff first
  • Make a list, and check it often
  • Prioritize based on your values
  • Get feedback from your partner if you’re planning for a household

How to grow your savings beyond the 401(k)

Putting money away every day—that's the first step. Let's make the next step as easy as possible: deciding where to stash your savings. Here's a guide for a few places to put your hard-earned dollars, whatever your situation, to help you prepare for a long, happy future.

Take advantage of IRA savings

In 2021, you can contribute up to:
$6,000 if you're under age 50
$7,000 if you're age 50 or older

Traditional IRAs offer up-front tax breaks, if you meet certain income eligibility requirements.2 Earnings can grow tax-deferred, but you pay taxes on withdrawals and required minimum distributions (RMDs). RMDs are required at age 72.3 Roth IRA contributions are after tax but earnings and withdrawals are free from federal tax, provided certain conditions are met.4

Saving without a workplace account

No 401(k)? No problem. Freelancers, entrepreneurs, and small-business owners still have tax-advantaged ways to save. Alternatives to the traditional 401(k) include SEP IRA, SIMPLE IRA, HSA, or Self-Employed 401(k). You'll need to decide what you value most: maximizing contributions or ease of administration.

Making your old accounts work harder

You've got 4 basic options for an old workplace account: Keep it with your old employer, roll over the money into an IRA, roll over into a new employer's plan, or cash out. Learn about rollover IRAs and other choices for your old 401(k) when you retire or change jobs. Be sure to consider all your available options and the applicable fees and features of each before moving your retirement assets.

Next step: Investing your IRA

Successful investors know that developing a plan—and sticking with it—works. Make the most of your savings with a diversified portfolio that accounts for your personal situation, tolerance for risk, and time horizon.