(NerdWallet) – Whether leaving the workforce is just around the corner or decades away, it’s always a good time to consider: Are you financially on track to retire?

A NerdWallet survey, conducted online by The Harris Poll in October 2024, found that just 23% of Americans had evaluated their progress toward retirement savings goals in the prior 12 months. To check in on how you’re doing, the first step is likely figuring out what number you’re aiming for.

Set your retirement goal

It may be tempting to measure your retirement savings against other people your age, but like many financial goals, this one is personal. How much money you need in retirement depends on factors like the cost of living in the place you hope to retire, whether there are loved ones to support and how you plan to spend your golden years. A good question to ask yourself is “how much money do I need to retire the way I want to?”

There are many unknowns between now and 20, 30 or 40 years in the future. But a good starting point is calculating how much you’ll need in retirement income. This involves looking at your current expenses, deciding which ones will increase or decrease by the time you retire, and then adding in any additional spending you plan to do once you leave the workforce.

If you’d rather use a general rule of thumb to calculate, you might assume you’ll need between 70% and 90% of your current income in retirement. Most people don’t need as much money in retirement to continue their current lifestyle because they’re no longer saving for retirement, nor are they paying payroll taxes or other work-related expenses.

Calculate how much you need to save

With an idea of how much you’ll need in retirement, use a retirement calculator to determine if you’re saving enough to hit that goal. In the calculator, input your age, current savings, monthly contributions and monthly retirement budget. You can also adjust factors like retirement age, rate of return, life expectancy and expectations around raises and inflation.

If your existing retirement savings and monthly contributions won’t get you to your savings goal, adjust your contributions in the calculator to see how much more you need to save. Keep in mind, this is a ballpark estimate and planning for future unknowns is difficult. But having a target retirement income and knowing what it takes to get there makes your progress measurable. Plus, this goal can be adjusted as you get closer to retirement age.

Start increasing your savings, if needed, to hit your goals

Just a quarter of Americans (25%) had taken steps to increase their retirement savings in the prior 12 months, according to the survey. If the calculator exercise showed that your existing savings and contributions are on track, great! Carry on. But if you need to start saving more, consider:

Setting up automatic contribution increases. Some retirement accounts allow you to set up annual increases. So for example, you could set up your 401(k) contributions to automatically go up by 1% each year. (Depending on your plan and the size of the company you work for, this may be done for you automatically, if you don’t opt out.) Over time, this could make a big difference, even if the change seems small.

Let’s say your salary is $50,000 and you’re currently contributing 10%, or $5,000 a year. It may not seem like a big win to increase that to 11%, or $5,500 a year, but that extra $500 in annual contributions could be worth more than $49,000 in 30 years at a 7% return. And that’s assuming you don’t continue increasing your contributions each year.

Saving your raises. If you can do without it, invest your next raise for retirement. This could mean increasing your 401(k) or 403(b) contribution, or putting the extra funds into a Roth IRA. Don’t want to save all of it? Put a portion of it away instead. Every little bit helps.

Evaluating your spending and debt payoff. Track your spending for a few months and then examine if there’s anything you could reasonably reduce or cut out to free up more money to invest.

As for debt payoff, if you’re aggressively paying off low interest debt — such as that with interest rates below 5% — it might be worth considering whether some of that extra money is better off saved for retirement while you slow down debt payoff progress. Ideally, you should aim to work on several important financial goals, like investing for retirement, saving up an emergency fund and paying off debt, simultaneously, to get all of your financial ducks in a row. At the very least, make sure you’re contributing enough to get the company match on your retirement funds, before allocating more money toward low-interest debt.

Methodology

This survey was conducted online within the United States by The Harris Poll on behalf of NerdWallet from Oct. 1-3, 2024, among 2,090 U.S. adults ages 18 and older. The sampling precision of Harris online polls is measured by using a Bayesian credible interval. For this study, the sample data is accurate to within +/- 2.5 percentage points using a 95% confidence level. This credible interval will be wider among subsets of the surveyed population of interest. For complete survey methodology, including weighting variables and subgroup sample sizes, please contact press@nerdwallet.com.