3 Signs You’re Not Saving Enough For Retirement

By Laura Woods

WWR Article Summary (tl;dr) The economic empowerment of women is a critical issue for the team here at WWR. That’s why we always want to pass along any info regarding women and money. The general rule of thumb is you should be saving at least 15 percent of your income for retirement.


You might be tired of hearing it, but you know it’s true: You need to start saving for retirement, now. If you start saving for retirement today instead of delaying it for a few years, you could add thousands of dollars to your retirement savings.

But perhaps you’re already setting money aside for your golden years. The only problem is you don’t know if how much you’re saving is actually enough to last you throughout retirement. If that’s the case, here are three red flags that indicate you need to ramp up your savings efforts.

If you don’t know how much of your income you’re saving for retirement, that’s a huge red flag. You should know your savings rate, which is typically calculated by dividing the amount in your savings by your annual income, and you should be trying to increase it every year. The lower your savings rate, the less money you’ll have to last you through your golden years and the less likely you’ll be able to afford all of the necessities, as well as the luxuries, you’ve grown accustomed to.

According to a study from brokerage firm Fidelity Investments, Americans’ median saving rate increased from 7.3 percent in 2013 to 8.5 percent in 2015. Still, experts recommend that your total savings rate should be at least 15 percent.

Again, the general rule of thumb is you should be saving at least 15 percent of your income for retirement. But if you’re having trouble saving more of your income, take a look at your spending habits and see if you need to cut back. You might find that you’re spending too much of your take-home pay on little things that can add up, such as going out to lunch three times a week.

Once you get your paycheck, make sure you put 15 percent, or perhaps 10 percent if 15 percent is too much, into your retirement savings account. Then, divide the rest of your take-home pay between an emergency fund and other expenses you’re planning to incur in the future. The earlier you get used to setting 10 percent to 15 percent of your income aside, the easier it will be to do so.

You might have a few medical bills now, but you’ll likely have more as you get older. So if you’re having a hard time finding the money to pay for your current medical bills, you’ll probably have an even harder time paying medical expenses when you enter retirement.

A report by HealthView Services found that a 65-year-old couple that retired in 2015, and is covered by Medicare Parts B, D and a supplemental insurance policy, can expect to pay the average lifetime retirement health care premium cost of $266,589. But for a 55-year-old couple retiring in 2025, that cost jumps to $463,849.

So start saving money now; you don’t want to have to worry about not being able to pay hospital bills in the unfortunate event you get sick or injured during retirement.

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