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  • July 24, 2014


    When you are working toward your retirement savings goals, T. Rowe Price recommends saving 15% or more of your annual salary for your retirement. Based on our research, investors who save this amount are best positioned to meet their income needs in retirement.

    To many investors, the 15% target may seem out of reach. However, this figure represents all the money put toward your retirement each year, including:

    • Your contributions to a workplace retirement plan
    • Any matching or other contributions from your employer
    • Your contributions to any IRAs


    If you can't reach 15% right away, begin by saving a percentage of your income that is appropriate for your personal situation. Then gradually increase that number until you reach 15%. For example, if you started by saving 5% of your salary for retirement and increased those savings by two percentage points each year, you would reach the target in just five years. Over 30 years, you would have amassed close to the same amount in retirement savings that you would have if you had contributed 15% from the very start.


    Many workplace plans allow you to automatically increase your salary deferrals each year. Using your plan's auto-increase function is a good way to consistently increase your savings over time. You might also consider increasing your contribution rate when you receive additional compensation, like a bonus or a raise. Directing this money toward your retirement accounts does not affect your current budget and moves you closer to achieving your retirement goals.

    To learn more about saving for the future, visit troweprice.com/NationOfSavers.

    The Value of Contributing More. Gradually raising your contribution rate and, if you are age 50 or older, taking advantage of catch-up contributions can help you reach your retirement savings goals. Assumptions: Salary of $50,000 annually adjusted to anticipate a 3% inflation rate. Annual rate of return is 7%. Contributions not to exceed IRS 2014 annual limit of $17,500, with $5,500 in annual catch-up contributions starting at age 50. This example is for illustrative purposes only and is not meant to represent the performance of any specific investment option.

    Copyright 2014, T. Rowe Price Investment Services, Inc., Distributor. All rights reserved.