The standard rule of thumb is to save 15% of pre-tax income for retirement, including any employer match, starting in your twenties. If you start later, the percentage needs to rise, because compounding has less time to work.
Where you save matters as much as how much. Tax-advantaged accounts, a 401(k) up to the match, then an IRA, then more 401(k) or taxable investing, stack in a sensible order that minimizes taxes over a lifetime.
Review the plan at least yearly and after life changes like marriage, a raise, or a job switch. The goal is not perfection, it is consistency, the habit of saving and investing that compounds for decades.
Key takeaways
- A 15% savings rate is the common benchmark
- Fill tax-advantaged accounts in the right order
- Yearly reviews keep the plan aligned with life changes
