When you retire, you’ll likely rely on Social Security benefits, any available pension from a previous job, and any retirement savings you accrued through investments to keep you afloat. But if you don’t save enough for your retirement, you may need to extend your working life past the typical retirement age, take on limited income work after you retire, or live on a meager limited income. 

The amount you need to save for retirement can vary from person to person based on a few factors, such as:

• Personal lifestyle expectations for retirement
• Pre-retirement income
• Savings ability
• Family composition
• Medical conditions

For example, someone who worked as a lawyer and made $150,000 a year may be better able to save for retirement and save more money than someone who worked as a retail associate and made $40,000 a year. Likewise, someone who works for the government or military may be more likely to get a pension than someone who works for a private company.

No matter who you are or what you do for a living, there are a few tips you can use to help save for retirement and feel more financially secure in your older years. 

It’s never too early (or too late!) to save for retirement. If you’re like most Americans, you may be wondering where to begin. A retirement savings plan can help you figure out how much you may need during retirement and how much you can set aside now. 

• Use a retirement calculator to determine how much you need for retirement planning. There are many retirement calculators available from government agencies, banks, and financial institutions. All you have to do is enter your current age, at what age you’d like to retire, your current income, and a few other figures. Then, the calculator shows you how much money you need to save to live comfortably during retirement and can show you how much you’ll save using different retirement savings account options.

• Open a retirement savings account. Depending on your job status, savings ability, and age, you may choose one of the following retirement savings account options.
  • 401(k), the most common form of employer-sponsored retirement savings account; you and your employer can both contribute, and some employers may contribute up to 100% match.
  • 403(b) Tax-Sheltered Annuity account, another employer-sponsored retirement savings account that’s not as common but has higher maximum contribution limits.
  • 457(b) account, another employer-sponsored retirement savings account that contractor employees are eligible for.
  • Individual Retirement Account (IRA), which is a common non-sponsored retirement account that you can put pre- or post-tax contributions into. It’s perhaps the best way to save for retirement if you don’t have access to an employer-sponsored account. Read the next slide for more information about IRAs.

• Put money in your retirement savings account. Consider maxing out your retirement savings account every year to make the most of your savings plan and accrue the most money you can. Each retirement savings account has its own maximum contribution limits as well as rules for pre- and post-tax contributions.

• Consider working with a financial manager. A financial manager may be able to help you determine how much money you need for retirement, pick the right retirement savings account or other investments, set regular contributions, and create a shifting budget and savings goal as you get older and (hopefully) make more money until you retire. You may be able to get this service for free through your bank or credit union or even your employer.