Tips on how to start saving enough for retirement at any age

When you first start thinking about retirement, there are some obvious questions you may ask yourself: “How much do I need to save?” and “Am I taking the right steps now?” Let’s unpack these questions and look at some guidelines for saving at different ages.

This seems like a simple question: How much money will I need for a secure retirement?

Unfortunately, the answer is not so simple. It differs for every person because it depends on many factors that vary for every individual—such as your current age, at what age you hope to retire, how many years you’ll live in retirement, the lifestyle you’d like to lead as a retiree, what sources of retirement income you may have, and many more. The answer also depends on assumptions about things like inflation and expected investment returns. Remember, it’s a forecast, and all forecasts are uncertain.

If you do a little research on this topic, you’ll probably come across some very rough rules of thumb that try to take all these different variables and boil them down to a simple guideline such as “you need X dollars” or “you need enough to provide 70-80% of your pre-retirement income”. These rules of thumb may be okay as a starting point, but they are very general.

You may be able to learn more with a second approach. Try out a flexible interactive retirement calculator like the E*TRADE retirement planning tool (login required) that allows you to input values for the variables we mentioned above. Play with the numbers­—try different retirement ages, different estimates of retirement spending, or even try different assumptions about inflation, portfolio returns, and more. This will give you a range of savings targets and also show you a lot about how each individual choice—how much you save every year, for example—impacts your retirement.

Let’s take a simple example using the retirement planning tool for someone who is 35 years old in January 2021, making $60,000 per year. Notice the impact of making changes to the age you retire and how much you spend each year.

By doing an exercise like this using your own information and goals, you should be able to get a firmer idea of what you may need to save and what choices about retirement make sense for you.

For everyone, at any age:

• If you’re eligible for a 401(k) and your employer will match a portion of your contributions, be sure to contribute at least enough to get the full match
• Consider a traditional or Roth IRA—you can contribute to an IRA even if you have or maxed out a 401(k) (see limits) as long as you have earned income
• If you can, contribute the maximum to your 401(k), IRA, or other tax-deferred retirement accounts
• Periodically analyze your spending and look for ways to cut back and put the savings towards your retirement
• Though it is typically advantageous to pay off high-interest debt first, don’t neglect your retirement saving in favor of other saving or spending priorities

How much of your income to set aside if you’re just beginning to save:

Estimating how much money you’ll need to save for retirement is not an exact science, but it’s worth making the effort. With a target in mind, even if it’s a range rather than a specific number, you can take steps now to give yourself the best chance of achieving your goal.