Step 1: Calculate Your Retirement Number
Before you can know if you're "on track," you need to know where you're going. Your retirement number is the total savings you need to sustain your desired lifestyle indefinitely in retirement.
The most widely used framework is the 4% Rule (from the Trinity Study): a retirement portfolio can sustain annual withdrawals of 4% of its initial value indefinitely over a 30-year retirement, adjusted for inflation, without running out of money in ~95% of historical scenarios.
Retirement Number = Annual Income Goal ÷ 0.04 Examples: $40,000/yr lifestyle → Need $1,000,000 $60,000/yr lifestyle → Need $1,500,000 $80,000/yr lifestyle → Need $2,000,000 $100,000/yr lifestyle → Need $2,500,000 Monthly Withdrawal = Nest Egg × 0.04 ÷ 12 $1,500,000 nest egg = $5,000/month withdrawable
Factor in Social Security
Social Security replaces roughly 30–40% of pre-retirement income for average earners. If you expect $1,800/month from Social Security ($21,600/year), your portfolio only needs to cover the gap: if you want $60,000/year and SS provides $21,600, your portfolio needs to generate $38,400/year → retirement number of $960,000 instead of $1,500,000.
See if you're on track right now
Enter your age, current savings, monthly contributions, employer match, and income goal to see your projected nest egg vs. what you need.
Savings Benchmarks by Age
Fidelity's widely-cited benchmarks suggest saving a multiple of your current salary by each age. These assume a 15% savings rate starting at 25, retiring at 67, and maintaining your current lifestyle in retirement.
| Age | Savings Target | Example: $70k Salary |
|---|---|---|
| 30 | 1× your salary | $70,000 |
| 35 | 2× your salary | $140,000 |
| 40 | 3× your salary | $210,000 |
| 45 | 4× your salary | $280,000 |
| 50 | 6× your salary | $420,000 |
| 55 | 7× your salary | $490,000 |
| 60 | 8× your salary | $560,000 |
| 67 | 10× your salary | $700,000 |
Behind the benchmarks? Don't panic — read this
These are median targets, not minimum requirements. A 45-year-old with $150,000 (below the $280,000 benchmark) who increases contributions, delays retirement by 2–3 years, and maximizes catch-up contributions can absolutely close that gap. The math of compounding means catching up is always possible — just progressively harder the longer you wait.
The Account Hierarchy: 401(k), IRA, Roth IRA
The order in which you fill retirement accounts matters enormously. Tax-advantaged accounts compound faster because they aren't reduced by annual taxes on dividends and gains.
| Account | 2026 Limit | Tax Treatment | Best For |
|---|---|---|---|
| 401(k) Traditional | $23,500 (+$7,500 if 50+) | Pre-tax contribution; taxed on withdrawal | Reducing taxable income now |
| 401(k) Roth | $23,500 (+$7,500 if 50+) | After-tax contribution; tax-free withdrawal | Expecting higher taxes in retirement |
| Traditional IRA | $7,000 (+$1,000 if 50+) | May be deductible; taxed on withdrawal | Moderate income, traditional tax reduction |
| Roth IRA | $7,000 (+$1,000 if 50+) | After-tax; all growth is tax-free forever | Young investors; lower current income |
| HSA | $4,300 / $8,550 family | Triple tax-advantaged | If enrolled in HDHP — best stealth retirement account |
Roth vs. Traditional: The Decision That Compounds Over Decades
This is one of the most consequential financial decisions a young person makes — and the answer isn't the same for everyone.
The core question is: Will you be in a higher or lower tax bracket in retirement than you are today?
| Scenario | Choose | Why |
|---|---|---|
| You're young, low income, expect to earn more | Roth | Pay tax now at your current low rate; all future growth is tax-free |
| You're in your peak earning years (35–55) | Traditional | Reduce taxable income now; likely in lower bracket in retirement |
| You're unsure / want flexibility | Split both | Hedge your bets; have both tax-free and pre-tax pools in retirement |
| You expect very large retirement withdrawals | Traditional | Control when you pay tax; Roth conversion ladder is an option |
The Roth IRA's secret advantage: the backdoor
Roth IRA contributions phase out at higher incomes ($150k+ for single filers in 2026). But high earners can use the "backdoor Roth" strategy: contribute to a non-deductible Traditional IRA, then immediately convert to Roth. This is legal, well-established, and used by millions of high earners annually.
Never Leave Free Money on the Table
The employer match is the highest guaranteed return on any investment you will ever encounter. A typical 50% match on contributions up to 6% of salary is an immediate 50% return on those dollars — before any investment growth. Nothing in the market reliably comes close to this.
You contribute 6% of $70,000 = $4,200/year Employer adds 50% match = $2,100/year FREE Total going into your account = $6,300 If you only contribute 3% (not the full 6%): You contribute $2,100 Employer adds $1,050 You FORFEIT $1,050/year in free money Over 20 years, $1,050/year at 7% = $45,400 forfeited. Always, always get the full employer match.
Behind Schedule? Catch-Up Strategies That Actually Work
Use catch-up contribution limits (age 50+)
The IRS allows extra contributions if you're 50 or older: an extra $7,500 in a 401(k) and $1,000 in an IRA annually. At 50, maximizing both for 15 years at 7% growth adds nearly $400,000 to your retirement balance.
Delay retirement by 2–3 years
This is the highest-leverage catch-up tool available. Delaying retirement from 65 to 67 does three things simultaneously: 2 more years of contributions, 2 more years of compound growth, and 2 fewer years of drawing down the portfolio. Social Security benefits also increase ~8% per year you delay past full retirement age.
Consider downsizing housing to free up capital
The family home is often a family's largest asset. Selling at retirement age and moving to a lower-cost area or smaller home can inject $200,000–$500,000 into your retirement portfolio while simultaneously lowering ongoing expenses.
Increase savings rate aggressively as income grows
The most powerful catch-up tool for those still in their working years: when you get a raise, increase your retirement savings rate before lifestyle inflation absorbs the extra income. Going from 10% to 15% savings rate in your 40s can close large gaps.
Retirement Quick Quiz
You want $70,000/year in retirement. Social Security will provide $22,000/year. What retirement nest egg do you need (using the 4% Rule)?
See how compound interest builds your nest egg
Understand the math powering your retirement — use the Compound Interest Calculator to model any investment scenario.