I know the general rule of thumb is you should save 15% of income to retirement, but I'm playing catch-up after years of neglect and contributing 25% until I catch up again. But how will I know when I'm on target again in the retirement account?

I already have an emergency fund in place & debt paid off apart from the house

If I knew when I was on target again, I'd be inclined to then reduce to 15% again and redirect the additional 10% into college funding for kids and/or paying the house off early. But I have no idea what the retirement fund should be at this point in time.

Is there some formula like: income x [some factor of my current Age] = current Retirement account target


I think this question is different from What size “nest egg” should my husband and I have, and by what age? as that question is asking what is the final end goal amount at retirement age. Whereas I want to know what the gap is in my current fund now.

And I think that knowing the current gap is actually more useful?

  • Your profile states you are in Ireland. Are you interested in an answer for Ireland? You didn't tag your question accordingly. Commented Sep 19, 2012 at 11:45
  • @ChrisW.Rea No, I don't think so. I believe the principle should be the same regardless of which country someone is in? Certainly answers to other questions are broadly in line with local recommendations anyway... Commented Sep 20, 2012 at 11:07
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    State pension benefits vary from one country to another, as do taxes, tax credits/deductions for retirees, medical coverage pre- and post- retirement, etc. If most of what you needed in retirement were provided by the state, you would need less of your own fund. And vice-versa. Commented Sep 20, 2012 at 11:46
  • @ChrisW.Rea I'll quote Dave Ramsey on this: "do not use your potential social security benefits in your calculations. I don't count on an inept government for my dignity at retirement, and you shouldn't either" I tend to agree. Here in Ireland the state benefits are steadily being eroded every year. By the time retirement comes for me, who knows if there will be any state benefits left... I think any state benefits should be considered as the cream on top - it is your job to take care of you and yours Commented Oct 11, 2012 at 11:55
  • I don't necessarily disagree with that thinking on social security programs, but my point remains that things may be different in Ireland with respect to taxes or other factors. Commented Oct 11, 2012 at 12:32

3 Answers 3


Mmmm... Now I've had time to think about it, what about online retirement calculators & planners? Particularly, those found on the relevant government agency websites for each country may factor in any state benefits as ChrisW.Rea was suggesting

More complicated than a rule of thumb but more accurate in telling you if your current retirement fund is on course.

If you agree & know other/better online calculators, or for other countries, feel free to suggest or edit


Fidelity's guidelines on Retirement Savings Goals, by Age

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    Forgive my criticism, I find the Fidelity chart to be awful. First, regardless of the size of one's goal, the linear 1X thru 6X from 35 to 60 makes no sense, it ignores compounding and the fact that when graphed, should look exponential not linear. Next, 8X final earnings would produce 32% of final income as a regular withdrawal. Social security will not produce the remaining 53% for their 85% target. I'm 50 and at 14X right now, hoping to retire in 10 years. 8X? bad advice. (not aimed at you, Vasu, I know you are just referencing their article) Commented Sep 19, 2012 at 17:49

Probably, but mainly consider your "burn rate" for retirement. How much money you expect to live off of based on your needs. I would go out as far as 30 years with some monthly social security thrown in

Interest from your retirement nest egg (perhaps in an annuity) is percentage based, offset by social security monthly, subtracted by how much you actually need to spend a month

If an annuity is making you 5% a year after management fees. How big does your nest egg need to be for 5% to be a worthwhile amount of earning?

(reference: 5% of $100,000 is $5000, while 5% of $875,000 is $43,750)

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