How much of your salary should you save for retirement?

Research says you need to save roughly 15% of your annual salary—but if you wait until you’re older to save, you will need to save more. The goal: to have an income that’s 75% to 80% of what you brought in the year before you retired.

How do you retire if you have no savings?

You’ll need to scale back, downsize, and possibly continue working part-time. Taking a roommate may help—and a reverse mortgage is an option if you own your home.

What’s the best way to start saving for retirement?

Just start—and take advantage of employer-based matching funds in your 401(k) if you have one. If not, consider a Roth IRA if you qualify, or a traditional IRA if you want the tax deduction. Brokerage firms have many options to explore.

How do I use my HSA when I’m retired?

You can contribute to your Health Savings Account until you start taking Medicare and take tax-free withdrawals to pay qualified medical expenses. This is better than 401(k) and traditional IRA distributions, which are taxable.

What’s the difference between a 457 plan and a 403(b) plan?

Public-sector and not-for-profit organizations cannot offer 401(k) plans . A 403(b) plan is typically offered to employees of private nonprofits and government workers, including public-school employees. There are two different types of 457 plans—the 457(b) to state and local government employees and the 457(f) to top executives at nonprofits.

What kind of retirement can you have on $1 million?

Even $1 million requires smart budgeting. Retirees will probably do better and have more flexibility if they invest in a traditional portfolio and take yearly withdrawals rather than buy an annuity .

Retirement Savings Accounts

Learn how and where to save to fund your retirement. Use 401(k)s, traditional and Roth IRAs, HSAs, and other tax-advantaged accounts strategically and set the financial goals you need to establish your future.

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Frequently Asked Questions

How much of your salary should you save for retirement?

Research says you need to save roughly 15% of your annual salary—but if you wait until you’re older to save, you will need to save more. The goal: to have an income that’s 75% to 80% of what you brought in the year before you retired.

Learn More What Percentage of Your Salary Should Go Toward Retirement
How do you retire if you have no savings?

You’ll need to scale back, downsize, and possibly continue working part-time. Taking a roommate may help—and a reverse mortgage is an option if you own your home.

Learn More Retirement Without Savings?
What’s the best way to start saving for retirement?

Just start—and take advantage of employer-based matching funds in your 401(k) if you have one. If not, consider a Roth IRA if you qualify, or a traditional IRA if you want the tax deduction. Brokerage firms have many options to explore.

Learn More Starting a Retirement Fund: How To Start Saving
How do I use my HSA when I’m retired?

You can contribute to your Health Savings Account until you start taking Medicare and take tax-free withdrawals to pay qualified medical expenses. This is better than 401(k) and traditional IRA distributions, which are taxable.

Learn More Retirement Uses for Your Health Savings Account (HSA)
What’s the difference between a 457 plan and a 403(b) plan?

Public-sector and not-for-profit organizations cannot offer 401(k) plans. A 403(b) plan is typically offered to employees of private nonprofits and government workers, including public-school employees. There are two different types of 457 plans—the 457(b) to state and local government employees and the 457(f) to top executives at nonprofits.

Learn More 457 Plan vs. 403(b) Plan
What kind of retirement can you have on $1 million?

Even $1 million requires smart budgeting. Retirees will probably do better and have more flexibility if they invest in a traditional portfolio and take yearly withdrawals rather than buy an annuity.

Learn More This Is How Retirees Live on $1 Million

Key Terms

Profit-Sharing Plan

This plan lets employees share in company profits based on quarterly or annual earnings. The company makes contributions to the plan; employees cannot.

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Rule 72(t)

This allows account holders to take early penalty-free withdrawals from IRAs and other tax-advantaged retirement accounts according to specific rules.

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Deferred Compensation

These plans allow employees to defer compensation—and the taxes due on them—until they retire. There are qualified plans, such as 401(k)s and non-qualified plans, which some companies make available to highly compensated employees.

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Non-Qualified Plan

These are tax-deferred, employer-sponsored retirement plans that fall outside of ERISA guidelines and are offered to key employees and others, often as a recruitment or retention tool. There are four types.

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Qualified Retirement Plan

These retirement plans meet IRS requirements and include 401(k)s and 403(b)s. Both employers and employees get tax benefits for offering and contributing to these plans.

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Cliff Vesting

This practice gives employees the right to receive full benefits from their company’s retirement plan at a specified date, often after five years, rather than becoming vested gradually over a period of time. It applies to both qualified retirement plans and pension plans.

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Pretax Contribution

A pretax contribution is any contribution made to a designated pension plan, retirement account, or another tax-deferred investment vehicle for which the contribution is made before federal and municipal taxes are deducted.

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