Estimate Time7 min

How to take control of your retirement

Key takeaways

  • Estimate how much money you'll need in retirement and how much you'll need to save to get there.
  • Investing for growth—keeping your time frame, risk tolerance, and financial situation in mind.
  • Consider using Fidelity's Planning & Guidance Center to help build your plan and monitor it.

If you haven't started planning for retirement, thinking about it can be overwhelming. If you have started, it can be hard to know if you're doing enough.

You don't have to do it all at once. Starting with a single step can be enough—and that includes saving what you can in a retirement account. Here are some factors to consider.

Think about how much money you'll need in retirement

Depending where you are in life, retirement could be very far away or it could be just around the corner. To make your plan a reality, start with an estimate of the amount of money you'll need in retirement. Fidelity has some rules that may help you hone in on the amount that will allow you to maintain the lifestyle you want in retirement. These rules are just a starting point. Be sure to factor in your personal circumstances in order to fit the guidelines to your life. Some factors that could influence the numbers include your age, financial situation, and risk tolerance for investing.

One way to roughly estimate the amount you may need to save is with the 10x rule. Fidelity's rule suggests aiming to save 10 times the salary you will be making by age 67.1 The salary people earn often goes up as they get older, so your retirement savings target would go up too. Having a ballpark figure to aim for can help you decide if your savings are on track or if you need to save a little bit more or less.

Your savings rate, the amount you save from each paycheck, can be another important piece of the puzzle. Try to save 15% of your pre-tax income, which includes any match you may get from your employer. If you cannot save that amount, try to save as much as you can to receive the full employer match.

Read about all 4 of Fidelity’s retirement saving guidelines: Retirement roadmap

It’s important to save for the expenses that you know you’ll need to pay in retirement. But it’s also important to be prepared for the unexpected. Here are 3 important variables that could affect your retirement if you’re not ready for them.

Fidelity Viewpoints

Sign up for Fidelity Viewpoints weekly email for our latest insights.

1. Health care expenses

According to the Fidelity Retiree Health Care Cost Estimate, an average retired couple age 65 in 2023 may need approximately $315,000 saved (after tax) to cover health care expenses in retirement. An average individual may need $157,500 saved (after tax) to cover health care expenses in retirement. The estimate doesn't include the potential cost of long-term care (LTC).2 The majority of people may require some type of LTC services at some point in their lives, according to the US Department of Health and Human Services.

It sounds a little scary but you can do something about it now.

Consider long-term care insurance: Insurers base the cost largely on age, so the earlier you purchase a policy, the lower the annual premiums, though the longer you'll potentially be paying for them.

Consider saving in an HSA if it's available: If your employer offers a health savings account (HSA), you may want to take advantage of it. An HSA offers a triple tax advantage:3 You can save pre-tax dollars, which can grow and be withdrawn state and federal tax-free if used for qualified medical expenses—currently or in retirement. It's a pretty powerful tax benefit and if you can save even a part of the money you contribute to the account for your retirement, the money will be able to potentially grow and compound for years.

Read Viewpoints on 3 healthy habits for health savings accounts

2. Inflation

Inflation can eat away at the purchasing power of your money over time. Inflation affects your retirement income by increasing the future costs of goods and services. Including investments that have the potential to help keep pace with inflation as part of a diversified portfolio that also reflects your time horizon, risk tolerance, and financial circumstances may make sense.

3. Longevity

As medical advances continue, it's quite likely that today's healthy 65-year-olds will live well into their 80s or even 90s. This means there's a real possibility that you may need to fund 30 or more years of retirement. People are living longer because they're healthy, active, and taking better care of themselves.

Annuities are an option: When it's time to turn your retirement savings into income, an annuity may be an option worth considering. Annuities provide regular income payments that are guaranteed for as long as you (or you and your spouse) live.4

Saving money is vital but it can only take you partway to your retirement goals. Earning a return on your money above the rate of inflation can help supercharge your retirement plan.

Investing for growth could help you get there

An investment strategy, or asset mix, that balances growth potential while managing risk may help you hit your retirement goals. (Risk in this context refers to volatility of returns.) Your mix of investments should reflect your time frame for investing (for instance, the number of years until you retire), your tolerance for risk (how upsetting would temporary market fluctuations be?), and your financial situation—or your ability to invest this money and leave it in the account for decades.

The sample investment mixes below show illustrative blends of stocks, bonds, and short-term investments with different levels of risk and growth potential. If you have a very long time until retirement, that gives investments time to recover from potential downturns, which means you may be able to take more risk.

Risk and return are generally linked: Lower risk investments tend to have relatively lower returns while higher risk investments have the potential for relatively higher returns. That's to compensate investors for the added risk. An investment mix including a combination of relatively higher risk investments, like stocks, and relatively lower risk investments, like bonds, is one way investors aim for higher returns while helping to manage risk.

The impact of asset allocation on long-term performance and short-term volatility

Asset mix performance figures are based on the weighted average of annual return figures for certain benchmarks for each asset class represented. Historical returns and volatility of the stock, bond, and short-term asset classes are based on the historical performance data of various indexes from 1926 through 2022. Domestic stocks represented by S&P 500 1926 – 1986, Dow Jones U.S. Total Market 1987– most recent year end; foreign stock represented by S&P 500 1926 – 1969, MSCI EAFE 1970 – 2000, MSCI ACWI Ex USA 2001 – most recent year end; bonds represented by U.S. intermediate-term bonds 1926 – 1975, Barclays U.S. Aggregate Bond 1976 – most recent year end; short term represented by 30-day U.S. Treasury bills 1926 – most recent year end. It is not possible to invest directly in an index. Although past performance does not guarantee future results, it may be useful in comparing alternative investment strategies over the long term. Performance returns for actual investments will generally be reduced by fees and expenses not reflected in these investments’ hypothetical illustrations. Indexes are unmanaged .Generally, among asset classes, stocks are more volatile than bonds or short-term instruments and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. Although the bond market is also volatile, lower-quality debt securities, including leveraged loans, generally offer higher yields compared with investment-grade securities, but also involve greater risk of default or price changes. Foreign markets can be more volatile than U.S. markets due to increased risks of adverse issuer, political, market, or economic developments, all of which are magnified in emerging markets.

Consider diversification

Build a diversified mix of stocks, bonds, and short-term investments, according to how comfortable you are with market volatility, your overall financial situation, and how long you are investing for. That may provide the potential for the growth you need without taking on more risk than you are comfortable with. But remember: Diversification and asset allocation do not ensure a profit or guarantee against loss.

You don't have to do it yourself—if you don't want to. If you're looking for simplicity, a single-fund option may help you get invested right away with professional management. There are typically 2 types: target date funds (based on an anticipated retirement date) and target allocation funds (asset allocation remains aligned with your risk tolerance). Investors or savers who want more personalized attention, or who are navigating a complex financial situation, may benefit from a managed account service.

Read Fidelity Viewpoints on The guide to diversification

You're not alone It sounds like a lot to tackle but you don't have to do it all at once. Saving what you can in a retirement account with an eye toward increasing that amount over time is a great start.

What's more, you're not on your own through the process. The Fidelity Planning & Guidance Center can help you every step of the way, from building your plan to maintaining it over time. It factors in variables like inflation, Social Security, unpredictable markets, and tax considerations to help you develop a strategy for saving and investing.

You'll also get ideas for the next steps you can take to strengthen your financial foundation. After you have a plan, you can monitor it on your own or with the help of a financial professional. It can be an ongoing process, but taking the first steps toward planning can give you one less thing to worry about.

Are you on track for retirement?

Review your retirement savings plan and see how small changes could improve your outlook.

More to explore

Past performance is no guarantee of future results.


Fidelity has developed a series of salary multipliers in order to provide participants with one measure of how their current retirement savings might be compared to potential income needs in retirement. The salary multiplier suggested is based solely on your current age. In developing the series of salary multipliers corresponding to age, Fidelity assumed age-based asset allocations consistent with the equity glide path of a typical target date retirement fund, a 15% savings rate, a 1.5% constant real wage growth, a retirement age of 67 and a planning age through 93. The replacement annual income target is defined as 45% of pre-retirement annual income and assumes no pension income. This target is based on Consumer Expenditure Survey (BLS), Statistics of Income Tax Stat, IRS tax brackets and Social Security Benefit Calculators. Fidelity developed the salary multipliers through multiple market simulations based on historical market data, assuming poor market conditions to support a 90% confidence level of success.

These simulations take into account the volatility that a typical target date asset allocation might experience under different market conditions. Volatility of the stocks, bonds and short-term asset classes is based on the historical annual data from 1926 through the most recent year-end data available from Ibbotson Associates, Inc. Stocks (domestic and foreign) are represented by Ibbotson Associates SBBI S&P 500 Total Return Index, bonds are represented by Ibbotson Associates SBBI U.S. Intermediate Term Government Bonds Total Return Index, and short term are represented by Ibbotson Associates SBBI 30-day U.S. Treasury Bills Total Return Index, respectively. It is not possible to invest directly in an index. All indices include reinvestment of dividends and interest income. All calculations are purely hypothetical and a suggested salary multiplier is not a guarantee of future results; it does not reflect the return of any particular investment or take into consideration the composition of a participant’s particular account. The salary multiplier is intended only to be one source of information that may help you assess your retirement income needs. Remember, past performance is no guarantee of future results. Performance returns for actual investments will generally be reduced by fees or expenses not reflected in these hypothetical calculations. Returns also will generally be reduced by taxes.

2. Estimates based on a hypothetical single person or opposite-sex couple retiring in 2023, 65-years-old, with life expectancies that align with Society of Actuaries' RP-2014 Healthy Annuitant rates projected with Mortality Improvements Scale MP-2020 as of 2023. Actual assets needed may be more or less depending on actual health status, area of residence, and longevity. Estimate is net of taxes. The Fidelity Retiree Health Care Cost Estimate assumes individuals do not have employer-provided retiree health care coverage, but do qualify for the federal government’s insurance program, Original Medicare. The calculation takes into account cost-sharing provisions (such as deductibles and coinsurance) associated with Medicare Part A and Part B (inpatient and outpatient medical insurance). It also considers Medicare Part D (prescription drug coverage) premiums and out-of-pocket costs, as well as certain services excluded by Original Medicare. The estimate does not include other health-related expenses, such as over-the-counter medications, most dental services and long-term care. 3. With respect to federal taxation only. Contributions, investment earnings, and distributions may or may not be subject to state taxation. The triple tax advantages are only applicable if the money is used to pay for Qualified Medical Expenses as described in IRS Publication 969. 4. Guaranteed lifetime income is subject to the claims-paying ability of the issuing insurance company.

Diversification and asset allocation do not ensure a profit or guarantee against loss.

Investing involves risk, including risk of loss.

Stock markets are volatile and can fluctuate significantly in response to company, industry, political, regulatory, market, or economic developments. Investing in stock involves risks, including the loss of principal.

In general, the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities). Fixed income securities also carry inflation risk, liquidity risk, call risk and credit and default risks for both issuers and counterparties. Lower-quality fixed income securities involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Foreign investments involve greater risks than U.S. investments, and can decline significantly in response to adverse issuer, political, regulatory, market, and economic risks. Any fixed-income security sold or redeemed prior to maturity may be subject to loss.

Views expressed are as of the date indicated, based on the information available at that time, and may change based on market or other conditions. Unless otherwise noted, the opinions provided are those of the speaker or author and not necessarily those of Fidelity Investments or its affiliates. Fidelity does not assume any duty to update any of the information.

IMPORTANT: The projections or other information generated by the Planning & Guidance Center's Retirement Analysis regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. Your results may vary with each use and over time.

Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917