HOW TO ESTIMATE YOUR NEEDS
To determine how much you’ll need, you have to think about what you want your retirement to look like. Typically, financial planners advise people to replace 70 percent to 85 percent of their income in retirement. These funds can come from savings, Social Security and pension income.
You can estimate your retirement income using Fidelity’s free online calculator or the free FuturePath planning tool from T. Rowe Price.
Financial planners typically recommend setting aside 15 percent of your salary annually (including matching contributions from an employer) to save enough for a comfortable retirement. A recent Fidelity Investments analysis of 401k participants who have salaries below $150,000 per year but $1 million or more in their accounts revealed that they save an average of 14 percent of their salaries.
Unfortunately, 42 percent of Americans have less than $10,000 saved for retirement, according to a recent GOBankingRates survey. But you can still reach the $1 million mark if you start now and follow these tips.