How much should I save each month to retire?
The two rules of thumb: 15% saved and 25x spent
Retirement planning usually anchors to two widely-cited rules that approach the same goal from different angles.
The first is a savings-rate rule: put away about 15% of your gross (pre-tax) income each year, counting any employer 401(k) match toward that total. This is Fidelity's guideline and it's meant as a lifelong average, not a target for a single year. The second is a nest-egg rule: aim to accumulate roughly 25x your expected annual expenses by the time you retire. If you expect to spend $40,000 a year, that points to a target around $1 million.
The two rules connect through the "4% rule," which comes from the Trinity study: withdrawing about 4% of your initial balance in the first year (then adjusting for inflation) has historically lasted roughly 30 years across a range of market conditions. Withdrawing 4% is the mirror image of holding 25x your expenses, since 1 divided by 25 equals 4%.
Why starting earlier shrinks the monthly amount
The single biggest factor in how much you need to save each month is when you start, because compounding does more of the work the longer your money is invested.
Consider two savers targeting the same goal, both assuming a 7% average annual return. Someone who begins at 25 and contributes for 40 years needs to set aside far less per month than someone who begins at 35 and has only 30 years, even though the later starter is saving for just 10 fewer years. The early starter's contributions spend an extra decade earning returns on returns, so a large share of their final balance comes from growth rather than from their own deposits.
The practical takeaway is neutral but striking: delaying the start of saving typically raises the required monthly contribution more than most people expect, because the lost years are the ones that would have compounded the longest.
What moves the number, and don't leave the match on the table
Several inputs push the required monthly figure up or down: your target retirement age, the size of the nest egg you're aiming for, the return you assume, inflation, and how much you've already saved. Higher assumed returns and earlier start dates lower the monthly amount; earlier retirement, higher expenses, and more conservative return assumptions raise it.
One input deserves special mention: the employer match. A 401(k) match is effectively free money added to your contributions, and Fidelity's 15% guideline explicitly lets you count it toward the total. That means the match can cover a meaningful slice of your savings rate at no extra cost to you.
Because these variables interact, a single rule of thumb only gets you in the right neighborhood. The Retirement Calculator lets you enter your own age, income, current balance, and assumptions to see a projected monthly contribution and how the ending balance changes.
Where the rules of thumb can mislead
The 15% and 25x rules are useful anchors, but they rest on assumptions worth examining before treating any figure as precise.
The 4% rule and the 25x target come from historical U.S. market data over 30-year windows. A longer retirement, an early retirement, sustained high inflation, or a stretch of weak early returns can all make a 4% withdrawal rate less durable than the historical average suggests. Return assumptions matter enormously too: a projection built on 7% growth looks very different from one built on 5%, and no future return is guaranteed.
Rules of thumb also don't account for your personal picture: pensions, Social Security, taxes on withdrawals, health costs, or plans to spend down principal. Treat the guidelines as a sanity check and the calculator's projection as a scenario, not a promise. This is general information, not personalized financial advice.
Frequently asked questions
Does the 15% include my employer's 401(k) match?
How big should my retirement nest egg be?
Is it too late to start saving in my 30s or 40s?
Is the 4% rule guaranteed to work?
Sources: Fidelity: How much do I need to retire?; Investopedia: The 4% Rule (Trinity study retirement withdrawal research).
Last reviewed July 4, 2026 · Editorial policy · This is general information, not financial advice.