Mastering Your Retirement Savings: A Flexible Approach to Achieving Your Goals

One of the most challenging parts of planning for retirement is determining the right amount of money to save. You need to ensure that your income can cover expenses while leaving room for hobbies and entertainment. It’s also wise to account for potential emergencies, like home repairs or unexpected medical bills.

While many aim to retire by age 67, the full retirement age for Social Security is 67 for those born in 1960 or later. Reaching this age grants you access to your full monthly benefits without any reductions based on your earnings history.

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If 67 is your target retirement age, consider setting a savings goal to reach by that time. Fidelity recommends saving 10 times your salary by retirement. However, there’s flexibility in this approach.

Understanding Fidelity’s Recommendations

Fidelity’s advice is personalized, which is beneficial. Instead of giving a broad suggestion like “save $1.5 million,” they base their recommendation on your salary. For instance, if you earn $100,000 annually, your goal should be $1 million by age 67. Conversely, someone with an $80,000 salary should aim for $800,000.

While Fidelity’s 10 times salary guideline offers a solid starting point, note that it’s not a strict rule. If your retirement plans involve living simply—perhaps in a small, paid-off home while engaging in local activities—you may need much less than 10 times your salary in your retirement accounts.

On the other hand, if your dream is to relocate to a high-cost city and travel frequently, setting a higher savings target would be prudent to fund those aspirations.

Tailoring Your Retirement Plan

It is perfectly fine to seek savings advice for retirement planning. To tailor advice effectively, consider working with a financial advisor who can help you understand your unique situation. They can factor in elements like your investment strategy, which Fidelity’s general guidance may not cover.

Keep in mind that not everyone retires at 67. If you prefer working until age 72, you might not feel pressured to meet the 10 times salary goal five years early. Instead, focus on creating a financial plan that enables you to reach your personal objectives without undue stress.

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