How Much Should You Save Monthly for Retirement?

"Save 15% of your income" is common advice, but the actual right number for you depends on your target retirement age, current savings, and expected investment returns — not a flat universal percentage.

Working backward from your target

The most reliable approach isn't picking an arbitrary savings percentage — it's starting from your retirement number (commonly 25x annual expenses, per the 4% rule) and working backward to find the monthly contribution that gets you there by your target date, accounting for compound growth along the way.

Why starting age changes the required monthly amount dramatically

Because of compounding, someone starting at 25 needs a meaningfully smaller monthly contribution to hit the same retirement number as someone starting at 40, since the earlier saver's money has more years to grow. This is why generic percentage-of-income rules can be misleading — the same 15% might be more than enough for an early starter, or not nearly enough for someone starting later who needs to catch up.

Existing savings reduce the required monthly contribution

Money you've already saved continues compounding on its own, reducing how much new monthly savings you actually need going forward. Recalculating periodically — not just once — as your existing balance grows is important, since the required monthly contribution should decrease over time if you're on track.

The assumed rate of return matters enormously

A required monthly savings calculation is highly sensitive to the assumed investment return. Using an overly optimistic rate can make a plan look achievable on paper while actually falling short in practice — using a more conservative, realistic long-run estimate (often 6-7% real return for a diversified stock-heavy portfolio) is safer than assuming best-case historical averages will always repeat.

Employer matching changes the math too

If your employer matches retirement contributions, that match should be treated as an immediate return on top of your own contribution — often making it the single highest-return dollar you can allocate, ahead of nearly any other savings or debt payoff decision.

Calculate your real number

The free Retirement Calculator works backward from your target to show the monthly contribution needed. If you're saving toward retirement via regular contributions specifically, the SIP Calculator projects how those contributions compound over your timeline.