Ask an Advisor: How Much Should Non-High-Earners Aim to Save for Retirement?

Not everyone has been fortunate to have high-earning employment during their life. That said, for those of us who have saved as best we could but do not have a substantial amount (less than $300,000), what is a realistic retirement savings goal and where do we go for advice? -Jim

There’s no magic number for retirement savings. Take a second to feel proud of how far you’ve come. A $300,000 nest egg is likely going to be helpful in supplementing any Social Security checks coming your way. But chances are you’ll need to rethink your retirement date, your lifestyle or both to stretch your savings.

Need help with your retirement plan? A financial advisor can help you explore different timelines and scenarios, and guide decisions about your financial future. 

How Much to Save for Retirement

You asked about “a realistic amount of retirement savings,” which can be hard to pin down without knowing key facts, like the cost of living in your area, your investment allocation, your marital status and your health outlook. It’s impossible to say whether you’re on track to have the kind of retirement you envision, but I’ll offer a few benchmarks as a starting point.

Data from the Federal Reserve’s most recent Survey of Consumer Finances shows that the median retirement savings for households led by someone between ages 55 and 64 is $185,000. Those in the 65- to 74-year-old camp have a median balance of $200,000. ¹ As someone with more money banked than the typical person your age, you may find some comfort in those figures. However, Americans on the whole are woefully undersaved for retirement. So while you may be ahead of the pack, the pack is far from the finish line.

I don’t know how close you are to retirement, so let’s run a hypothetical: Say you want to retire this year with $300,000. By my calculations, your nest egg would generate around $11,700 this year. Is that enough? On its own, it’s not, especially if the money you have saved hasn’t been taxed yet. But remember to also factor in Social Security benefits and income from other sources, like pensions or annuities. If you’re married and your spouse has their own retirement savings account and Social Security benefit, your prospects might look a lot better.

(And if you need help planning your retirement withdrawals, connect with a financial advisor and see what guidance they can provide.)

I reached the $11,700 figure by multiplying the approximate savings balance by 3.9%, which is the safe withdrawal rate for people entering retirement in 2026, backed by research from Morningstar. ² That means you could withdraw 3.9% of your portfolio this year, adjusting the dollar amount for inflation each year, and not run out of money for the next 30 years (assuming at least 20% to 50% of your assets are allocated to equities). All else being equal, the higher your balance, the more income it generates. For example, a $400,000 savings balance would net $15,600 per year in income, and $500,000 would net close to $20,000.

Making Adjustments

If you come to realize your nest egg won’t cut it, here are a few adjustments you might consider to reach your savings target:

• Consider delaying retirement: As evidenced above, delaying retirement and continuing to save can only be beneficial. Plus, your Social Security benefit is calculated using your 35 highest earning years. If you’re earning more than you have in the past, it will replace lower earning years, increasing your eventual benefit (up until age 70). Of course, sometimes it’s not as simple as choosing to work longer for the sake of boosting savings, as health issues, family circumstances, burnout and job loss can interrupt plans. 
• Move somewhere cheaper: One way to get your retirement costs down is to relocate to a cheaper city or town. Not only is this strategy going to shave down housing costs, which represent the largest portion of most retirees’ budgets, but it’s likely to reduce other major expense categories, such as food and healthcare.
• Be flexible with your withdrawals: The 3.9% safe withdrawal rate mentioned above is a potential starting point for many retirees. But if you’re willing to live lean when the market dips and take less than 3.9% to account for portfolio losses, you may be able to stretch your savings further, according to Morningstar. Alternatively, you could consider skipping the inflation adjustment in the year following a market downturn to compensate for the portfolio loss.

Where to Find Advice

Retirement planning is a team sport. Seek out a fiduciary financial advisor to get the most accurate calculations for your situation and personalized advice on how to make the most of what you have. 

In the meantime, you might be tempted to experiment with an AI chatbot to get a sense of your fitness for retirement. Just know you won’t get the full picture, and any data you provide may not be protected. 

For late-stage savers in particular, a licensed human advisor may provide the most thorough assessment of your financial situation writ large. An advisor should take the time to get to know you, your financial history, your risk tolerance and your investment preferences. Be wary of any professional who claims the solution to your lagging savings is to buy an expensive financial product, especially one you can’t return or get out of.  

(And if you need help finding a fiduciary advisor, this free tool can match you with professionals who serve your area.)

Bottom Line

You’ve worked hard for your savings, and it’s time to make a plan for it. Take your concerns and questions to a fiduciary financial advisor, who can model out different scenarios for your retirement outcomes based on dozens of variables, from asset allocation to life expectancy to spending behaviors. They’ll help you make high-impact adjustments to your savings strategy, ideally before it’s too late.

Retirement Planning Tips

• Retirement planning goes beyond investments, and a financial advisor can help coordinate taxes, Social Security, withdrawals and estate decisions into a cohesive plan as circumstances evolve. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
• Retirement often brings lower earned income, but it can also trigger higher effective tax rates due to bracket compression, filing status changes or required minimum distributions (RMDs). Instead of focusing solely on replacing income, map out how withdrawals will interact with tax brackets over time. A multi-year projection can reveal when strategic Roth conversions or capital gains realization may reduce long-term tax drag.

Tanza Loudenback, CFP® is a financial planning columnist who answers reader questions on personal finance topics. Got a question you’d like answered? Email AskAnAdvisor@smartasset.com and your question may be answered in a future column.

Please note that Tanza is not an employee of SmartAsset and is not a participant in SmartAsset AMP. She has been compensated for this article. Some reader-submitted questions are edited for clarity or brevity.

Photo credit: Photo courtesy of Tanza Loudenback, ©iStock.com/Pressmaster