How Much to Save for a Secure Retirement

Alicia H. MunnellAnthony Webb Francesca N. Golub-Sass

IB#11-13

The brief’s key findings are:

  • Recent estimates suggest that people need about 80 percent of their pre-retirement income in retirement.
  • The saving rate needed to hit this target depends on earnings, saving start age, retirement age, and asset returns.
    • An average earner who starts saving at 35 and retires at 67 needs to save 18 percent each year, assuming a 4-percent return.
    • The comparable rates for low and high earners are 12 percent and 22 percent, respectively.
  • Starting early and working longer are more powerful levers for gaining a secure retirement than earning higher returns.