How Much to Save for Retirement – Are You on Track? (Infographic)

401k’s. IRAs. Roth accounts. Early-withdrawal penalties. Educating yourself about the various retirement plan options is intimidating, and figuring out how much you should be saving can be even scarier. To assist you in this essential aspect of financial planning, take a look at this infographic and determine just how much you need to be saving at any given age.

It’s also important to know the key difference between a 401k and IRA (Roth and traditional), including tax benefits, contribution limits, conversion, and eligibility age. Are you currently on track with your retirement planning? Here are some statistics that may surprise you:

  • 39% of households nearing retirement do not have a formal retirement plan.
  • Only 35% of Americans are confident they can rely on social security.
  • For a couple both 62 years old, there is a 47% chance that one of them will live to be 90. Are you prepared to live 25 years on your retirement savings?
  • Early withdrawal from retirement plans incur a 10% penalty plus taxes.

how much to save for retirement

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  • DebtRoundUp

    This is a great infographic. It makes the information about retirement so much easier to understand and deal with.

  • Tushar @ Everything Finance

    Wow, great info graphic. I would say I’m on track. Although I hope that the totals are for individuals and not couples. Otherwise it might be tight.

  • Ravindra

    It seems like the subtitles under “Know Your Plans” should be “401k vs IRA” instead of “401k vs Roth IRA” as under “Conversion” section of it says “Can be converted to a Roth IRA…” that is the same type of Investment.

  • Evan Davis

    What a great infographic. It really hits home the importance of saving for retirement!

  • MarthaJ

    WOW! That is a very good illustration. And, the differences made clear for 401k vs. Roth IRA, Traditional vs. Roth IRA. Seeing that, I can say I am not off-track, though a little still needs to be added to my Roth IRA.

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  • Jenny M.

    MY 6 Basic rules for a happy secure retirement. Young people listen up!

    1) Buy mutual funds, not individual stocks to put in 403b/401k or individual IRAs if you don’t have access to a 403b/401k. Trust me, you are NOT smart enough to beat the market. Buy a fund that merely tries to match the indexes.

    2) Pick the funds with the lowest costs associated with them. It isn’t hard to figure out the cost of a fund.

    3) Consistency is the key. Don’t panic when the stock market tumbles, keep putting that money into your mutual funds even when the stock prices are sinking. You are just buying more shares. The market will go up eventually leaving you in a MUCH stronger position.

    4)Don’t waste money on stupid stuff you don’t need. Don’t get $100/month smart phone. I pay $20/month with tMobile. Don’t get $100/month auto insurance. I pay $25/month with InsurancePanda. Don’t spend $50/month on your gym. I spend $15/month at Planet Fitness. Get the drift? All these expenses add up and end up cutting into your savings.

    5) If you’ve got a mutual fund in you 401k or ira that only has $1000 or so in it, DON’T cash it in! Roll it over to another IRA or into your corporate plan if possible. I bounced around from job to job quite a bit, so I didn’t always have time to build up my 401k to large holdings before I had to look for a new job. I kept an IRA for these small sums just to collect those tiny amounts. Don’t spent it! roll it over!

    6) Never, Ever (NEVER!!!!) take money out of your retirement to make house payments. Sell the house first. Most individual retirement plans are protected from repossession. It’s stupid to take money from a protected asset to help pay off an unprotected asset. What if you get into a bind again in 2-3 years and you’re retirement funds are tapped out? You lose the house and have no retirement.

    Do this and you’ll have a reasonably secure retirement. It’s what I did.

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