Get Serious About Retirement – Is 15% Enough?

Get Serious About Retirement – Is 15% EnoughThere are many questions around retirement planning. At what point in our lives should we get serious about saving for retirement? How much of our income should we save for retirement? Is 15% enough? How much will I need?

Get Serious About Retirement

Don’t wait until you are 65 and realize that you don’t have enough saved to retire. Do not think social security is going to be enough for the lifestyle that you want. If you are under 40, do not plan social security into your retirement planning. It may or may not be there for you. If it is, consider it a bonus when you can collect it.

Get serious about retirement right now! It doesn’t matter what your age is. In fact, the younger you are, the better you are because time is your friend. If you are older and just decided to get serious about retirement, time is not your friend. It is going to be your motivator. At some point you will have to retire because you won’t be able to work.

Whether you are 25 or 65, don’t wait any longer to plan your retirement. Start dreaming what you want to do when you no longer need to work for money. Be specific. Do you want to travel? Where do you want to go, and how much will it cost you each year? Do you want a home on the beach or in the mountains? How much will that cost you? Do you want to start a non-profit and use your wealth to help others? How much will you need?

Baby Steps

Once you are serious about saving for retirement, you need a plan to get you there. How much will you need, and how long will it take you to get there?

If all your income is going to debt payments, you won’t be able to save anything for retirement, and it will take you a long time to get there. However, once you don’t have debt, it is easy to save 15% or more for retirement.

How long does this take to get to a point where you can save 15% or more for retirement? Let’s say that paying off your debt and saving a 6 months emergency fund takes 3 years and paying off your mortgage takes 7 years. In 3 years, you won’t have any issue saving 15% for retirement. In 10 years, if you make $50,000, you can save $1,500 a month when you no longer have a mortgage payment. With two wage earners making an average income, saving $4,000 or more a month is not an issue when you don’t have debt payments.

15% is not Enough

Although Baby Step 4 is to save 15% for retirement, 15% is not enough for most people. As you will see below, you need to save 15% of your income for 28 years in order to have enough to replace the income you are spending each year.

Most people don’t start saving 15% of their income when they are 25 because of their lifestyle and their debt. Most people don’t get serious about their retirement until later in life, let alone in their 20s. 15% is not enough if you are starting in your 40s or 50s.

How Much is Needed to Retire

How much is needed for retirement depends on what you want. If you want to continue your current lifestyle and add in $20,000 a year for traveling, then you need to be able to have enough assets to produce your current expenses plus $20,000. This is just an example. You can find a retirement calculator and input these numbers to see how much you need to retire. Find a calculator that works for you.

The 4% rule is what I like to use. It’s simple, especially if you are younger and looking to become financially independent in your 30s or 40s. The 4% rule is very conservative.

The chart below shows the percent of your income that you need to save in order to retire in a certain number of years.

Get Serious About Retirement – Is 15% Enough?



Let’s say you are making $50,000 a year and are saving 10% of your income. You need to do this for 33 years. What if you got rid of your $150 a month cable bill? Instead of saving $5,000 a year, you can save $6,800 a year. Instead of saving 10%, you are saving 13.6% a year. Look at the graph above and notice that you can stop working 4 years sooner because you gave up cable. Is cable worth working 4 additional years?

If you cut another $60 a month, your savings rate increases to 15%. Although you still need to work 28 years, that’s another 1 year sooner. By increasing your savings rate from 10% to 15%, you cut 5 years off your working life. 10,000 additional hours to do whatever you want!

As I mentioned above, 15% for retirement is not enough if you aren’t starting soon enough. You need to pay off your mortgage so that you can increase your savings rate. Increasing your income can help, but you have to control lifestyle inflation.

Once your mortgage is paid off, you can put another $1000 a month to retirement. Instead of 15%, you can save closer to 40% of your $50,000 income. Because of your high savings rate, you can become financially independent in 16 years. This doesn’t account for anything that you currently had saved, so it’s less than 16 years.

If your household income is $100,000, are debt free including your house, and can live your life without spending, spending, spending, your savings rate can be 60% or higher. At 60% savings rate and making $100,000, it’s 10 years to become financially independent.

Once you are financially independent, you can retire if you want to, or you can keep working at the job that you love. You have so many options available to you.

Click on the link above and play around with the calculator. It will tell you what your savings rate needs to be so that you can reach your goal.

How much you need to retire is dependent on your current lifestyle and how much you plan on inflating it in the future.


Get serious about your retirement. Don’t wait. Get on a plan to get rid of your debt so that your income can be used to build wealth. Saving 15% for retirement is only enough until your mortgage is paid off. After that, you will need to determine how many years you want to work until you retire. Then you will need to plan your budget and lifestyle so that you can increase your savings rate so that you can reach your goal.


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