Americans think you need $1.7 million to comfortably retire — here’s how much you need to save each month to get there by age 65

On average, American workers think they will need $1.7 million saved for retirement, but just under half think they are likely to meet their savings goals, according to a recent study by Charles Schwab.

This is understandable: Financial planners typically recommend saving between 10% and 15% of your total annual salary for retirement, which is no small feat.

But if you haven’t been able to save much yet, don’t panic. Workers with employer-sponsored retirement plans contribute only about 7% of their income to their retirement fund on average, according to the Vanguard “How America Saves 2022” report.

With this in mind, CNBC has calculated how much you need to save to save $1.7 million by 65, plus how much you need to earn to make it happen without saving more than 15% of your income.

Although these calculations can give you an idea of ​​what you should save to reach your $1.7 million retirement savings goal, they don’t take into account various factors outside your control, such as market volatility, unexpected life events, wage increases, and periods . Unemployment or the interest you will earn on your savings.

Here’s how much you need to set aside each month to save $1.7 million by 65.

If you start at 25

Earn 4% annual rate of return: $1433.51 per month

  • Annual salary required if you save 10% of your income: $172,021
  • Annual salary required if you save 15% of your income: $114,686

Earn 6% annual rate of return: $853.63 per month

  • Annual salary required if you save 10% of your income: $102,436
  • Annual salary required if you save 15% of your income: $68,294

Profit 8% annual rate of return: $486.97 per month

  • Annual salary required if you save 10% of your income: $58,436
  • Annual salary required if you save 15% of your income: $38,959

If you start at the age of thirty

Earn 4% annual rate of return: $1,860.50 per month

  • Annual salary required if you save 10% of your income: $223,260
  • Annual salary required if you save 15% of your income: $148,848

Earn 6% annual rate of return: $1,193.23 per month

  • Annual salary required if you save 10% of your income: $143,187
  • Annual salary required if you save 15% of your income: $95,463

Profit 8% annual rate of return: $741.10 per month

  • Annual salary required if you save 10% of your income: $88,932
  • Annual salary required if you save 15% of your income: $59,291

If you start at 40

Earn 4% annual rate of return: $3,306.56 per month

  • Annual salary required if you save 10% of your income: $396,787
  • Annual salary required if you save 15% of your income: $264,538

Earn 6% annual rate of return: $2,453.12 per month

  • Annual salary required if you save 10% of your income: $294,375
  • Annual salary required if you save 15% of your income: $196,260

Profit 8% annual rate of return: $1,787.54 per month

  • Annual salary required if you save 10% of your income: $214,505
  • Annual salary required if you save 15% of your income: $143,010

As the calculations show, the earlier you start saving for retirement, the less you will have to save per month, because your money will have more time complex.

In fact, one of the biggest mistakes people make when it comes to retirement planning is not starting early enough and not increasing their contributions over time, says Nathan Forese, director of investments, ideas and advisory services for Schwab Retirement Plan Services.

“You don’t have to start strong,” says Fores. “Even if you start small, this gets you engaged and then you can raise it every year.”

To that point, it’s smart for workers in their 20s and 30s to take advantage of opportunities like an employer-sponsored 401(k) match if one is available, says Joe Doran, co-chair of the Personal Financial Management Group at Goldman Sachs.

For workers in their 40s, Doran recommends working with a financial advisor to discuss retirement goals and priorities. “This will help you build a comprehensive financial plan to create a beneficial retirement for you,” he says.

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