Like eating vegetables and exercising, saving for retirement is one of those "shoulds" that you'd like to put off until sometime in the undefined future. But the longer you wait to start saving, the more you have to save every year -- and the higher the likelihood that you'll be unable to retire at 65 or even after that. Should you have 10 percent of your monthly pay transferred directly into a 401k or IRA? Should you pay off all debts before starting to save?
While savings strategies are as numerous as the companies that would like to hold on to your savings for you, what it basically comes down to is this: How much would you eventually like in your retirement piggy bank, and how much time do you have to get it? Along these lines (with a couple important factors added), these calculators are great places to start exploring retirement savings: Fidelity, MassMutual, T. Rowe Price, and CNN Money.
In addition, there are a number of rules of thumb for retirement savings that can help keep you on track toward your goals. First, save for retirement before saving for your kids' college tuition -- you can get loans and scholarships for college, but not for retirement. One rule of thumb indicates that you should plan to collect about 20 times your gross annual income for retirement [source: Roth]. Another suggests that if you start saving in your 30s, save 10 percent of your annual income for basic retirement expenses, 15 percent to retire in comfort and 20 percent for a chance at early retirement [source: Weston].
Calculators and umbrella rules are great to keep in mind, but they're not the end of the story. Keep reading to see if you're really on track for retirement.