How much do you really need to save for retirement?

Retirement is the ultimate long-term financial goal. You can save and invest for decades and have no doubt you’ll have enough. So how much do you really need to save for a comfortable retirement?

Unfortunately, there’s no crystal ball to tell you how much you’ll need. Instead, you will need to use some general rules and apply them to your own situation. We’ll cover four strategies you can use to help with retirement planning, as well as factors that will affect how much you should save.

Below are some common strategies for determining your retirement savings needs. Use these as starting points when estimating your own retirement savings goal.

One way to track the progress of your retirement savings is to compare your nest egg with age-based benchmarks. These criteria are intended to keep you on track as you save for retirement for decades to come. They provide a measure of how much you should keep as a function of your salary.

For example, if you are 50 years old, you should have saved 3.5 to 5.5 times your salary. If you earn $100,000, that means you need to save between $350,000 and $550,000 for retirement.

Different companies have published their own benchmarks over the years, but investment firm T. Rowe Price recently reevaluated those numbers. These are based on retirement starting at age 65. See the table below for a summary of the results of this study:

Financial services firm Fidelity suggests that you should save at least 15% of your pre-tax income each year to have enough money for retirement. (This includes any 401(k) matches offered by your employer.)

For example, if your salary is $60,000, you should save at least $9,000 a year. If your salary increases to $90,000, you should save at least $13,500 per year.

The 15% rule comes from Fidelity’s calculation that you should get about 45% of your retirement income from savings in retirement; the rest will come from Social Security.

This rule assumes that you have been saving consistently throughout your career, from age 25 to age 67. So if you start late or plan to retire at a younger age, you’ll likely need to increase your savings rate to catch up on your retirement savings.

Another simple way to measure your retirement savings goal is to multiply your annual income in retirement by 10 and 12 and use those numbers as goalposts for your nest egg. (These numbers also line up with T. Rowe Price benchmarks, assuming you retire around age 65.)

For example, if you earn $125,000 when you retire, you should have between $1.25 and $1.5 million set aside. While this strategy can help you estimate your ultimate retirement goal, it’s less useful in tracking your retirement savings along the way.

The 80% rule says you’ll need about 80% of your pre-retirement income to get by each year during retirement. For example, if you earn $100,000 at the end of your career, you will need approximately $80,000 per year to fund your retirement.

This rule is based on the idea that you will have lower expenses in retirement. For example, you will no longer have to set aside money for taxes and retirement contributions, and you can live in a paid-for home.

While the 80% rule provides a simple way to estimate your retirement budget, it does not give you a detailed picture and is based on a variety of assumptions. For example, it assumes that your lifestyle will not change in retirement. However, if you plan to spend more on things like travel, donations, or healthcare, covering 80% of your income may not be enough.

These strategies are guidelines intended to guide you towards saving enough for retirement. However, you should approach these rules with some caution, considering the following factors and how they may affect your retirement needs.

Your retirement age plays an important role in how much money you should save. The sooner you retire, the more money you’ll need to take care of yourself and the less time your money will have to grow. Additionally, between the ages of 62 and 70, SSI benefit amounts increase for every month you delay taking them.

How do you envision your lifestyle in retirement? Will you stay close to home and spend time with family and friends, jet off to see the world, or buy a second home on the beach? How you plan to live your retirement determines how much you’ll spend each year; This is directly related to the amount of money you need.

While your health can be difficult to predict, it’s worth considering when planning for retirement. For example, if you have a chronic illness or a family history of heart disease, you may want to plan for higher healthcare expenses in retirement.

Consider what fixed expenses you will have in retirement. Will you still have a mortgage or other debt to pay off? Or will you be completely debt free? Similar to healthcare costs, it is difficult to predict your fixed expenses decades into the future, but good forecasting of these costs can help you plan better for retirement.

Ideally, you’ll use a combination of retirement savings rules and your own personal circumstances to create a realistic goal. But if your savings pale in comparison to these guidelines or average retirement savings by age, you can use these tips to get you on track:

• Create a retirement budget: It’s difficult to plan for retirement without knowing how much you’ll need. Spend time creating a retirement budget by estimating how much you’ll spend on various categories such as housing, food, healthcare and travel.

• Win your employer match: If your employer offers a 401(k) match, do what you can to earn those dollars. This is essentially free money for your retirement savings stockpile.

• Increase your contributions by 1%: No matter your age, start contributing as much as you can to your retirement savings. Then increase that contribution by 1% whenever possible – next month, next quarter, or even next year. A slight increase won’t be noticeable much, but it can make a big difference down the road.

• Make capture contributions: If you’re 50 or older, the IRS allows you to contribute a little extra to your retirement accounts each year. By 2025, those who meet age requirements will be able to contribute an additional $1,000 to their IRA and $7,500 to eligible workplace plans.

• Hire a financial advisor: Retirement planning isn’t always simple, and you don’t have to do it alone. If you’re having trouble figuring out how much you’ll need or worried that you’re falling behind on savings, consider working with a financial advisor.

Saving for retirement isn’t as simple as following a general guideline. Keep in mind that the right amount of savings for retirement is different for everyone and the strategies mentioned are suggestions only. The key to saving for retirement is to start now, save consistently, and tailor your strategy to your unique circumstances.