How Much Should You Save for Retirement?
5 min read · Last reviewed July 1, 2026
"How much do I need to retire?" has no single answer, because it depends on the life you want, when you stop working, and what else you'll have coming in. But there are sensible rules of thumb that turn a vague worry into a number you can act on.
This guide walks through the common benchmarks, why the amount matters less than starting early, and how to work back from a target to a monthly contribution. It's general information, not personalised financial advice.
Rules of thumb worth knowing
One popular starting point aims to save about 15% of your gross income each year for retirement, including any employer contribution. Another suggests having roughly one year's salary saved by 30, three times by 40, and so on.
A third approach works from spending rather than income: estimate your annual costs in retirement and multiply by 25 (the flip side of the 4% rule). These are broad guides — they won't fit everyone — but they give you a target to aim at instead of guessing.
Why starting early matters most
Because of compounding, money you invest in your twenties has decades to grow, so each pound does far more work than one added in your fifties. This is why someone saving modestly but early often ends up ahead of someone saving heavily but late.
The practical lesson: don't wait until you can afford the 'ideal' amount. Starting small and increasing contributions as your income grows beats holding off for the perfect moment.
Turning a target into a monthly figure
Once you have a rough goal, you can work backwards: how many years until you retire, what return you might reasonably assume, and what you already have saved. That tells you what to put aside each month.
Revisit the number every few years. Pay rises, career changes, and life events all shift what's realistic, and small increases to your contribution rate compound into large differences over a working life.
Frequently asked questions
▶What percentage of income should I save for retirement?
A common guideline is around 15% of gross income a year, including any employer match. If that's out of reach, start with what you can and raise it over time — starting early matters more than the exact figure.
▶Is it too late to start saving for retirement in my 40s?
No. You'll benefit from less compounding time than an early starter, so you may need to save a higher percentage, but consistent contributions from your 40s still make a meaningful difference.
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