Stop listening to the popular retirement savings advice—and do these 3 things instead.

By Catey Hill
Dollar signs growing larger
Credit: Juan Moyano/Stocksy

If you’re like most of us, you’ve panicked about how much you’ve saved—or rather, not saved—for retirement.

This is partially because much of the retirement advice you read, while good, may not feel very achievable. One popular benchmark is to save 10 to 12 times your annual salary by the time you’re 67. Gulp. That means someone making $60,000 a year (that’s roughly the median in America), might need to have upward of $700,000 socked away by 67.

Others say you’ll need anywhere from $1 million to $5 million. Again, gulp—especially seeing as the median retirement savings is nowhere near that number. What’s more, these goals are especially hard for women to achieve, as they still only make 82 cents for every dollar a man makes.

“The emphasis on these numbers drives me crazy,” says certified financial planner Kevin Mahoney, the founder of financial advising firm Illumint in Washington, D.C. “They can do more harm than good.” That’s because for some people, these lofty guidelines—while clearly trying to encourage you to save as much as possible—can have the opposite effect: They shut people down.

“Just like setting New Year's resolutions that are unrealistic, setting aggressive savings goals that you can’t attain becomes discouraging,” explains Sharon C. Allen of Illinois-based Sterling Wealth Management. “Human nature, for many people at that point, is to just give up, [which is] extremely harmful for savers.”

What’s more, the reality is that even the best savers don’t hit those benchmarks (and many of them, experts told Millie, will do just fine in retirement). Indeed, far from hitting 10 to 12 times their annual salary in their 60s, the best savers—defined as those whose savings are greater than 90% of people in their age and salary range—only hit 7.4 times their annual salary, according to an analysis by MerrillEdge.

How much the best savers save for retirement
Credit: Data Courtesy MerrillEdge

“The fact that this was the best group is a good example of how off track we’ve become in giving retirement advice,” says Mahoney. “There’s a lot of yelling into an echo chamber about savings—at some point guidelines like ‘save 10 to 12 times your salary’ have no relationship to reality.”

So rather than try to hit a big number like $1 million or a goal like 12 times your salary by 67, you should create smaller, more doable goals and amp up from there, experts say. Here are three rules for socking away a lot of money for retirement, without stressing yourself out too much.

  1. Amp up savings slowly—even just 1% a year is OK—if you need to, says Mahoney. Indeed, he says that while you should aim to sock away roughly 10% to 15% of your salary for retirement when you start, don’t worry if you can’t get to that number right now, as it’s not always possible, especially if you’ve suffered a job loss or have a lot of debt.

    Instead, do this: If you’re lucky enough to have a 401(k) or another employer-sponsored plan, always contribute at least up to what your employer matches, even if you’re still paying down high-interest debt. (That match is free money!) Then every six months or so, amp up that savings by 1% to 2%, Mahoney says, and when you get a raise or bonus or pay off a big expense, plan to divert some of that money to retirement as well. “Ten years down the road, this strategy could have you saving 20% of your salary.” Allen adds that you should have regular money “check-ins” with yourself to review your spending and see if there’s anything extra or anything you can cut—cable, subscriptions, the occasional dinner out—to put more money away for retirement. “Most people can find something,” she says.

  2. Start early if you can, says Allen. Thanks to the magic of compounding, if you start when you’re young, you’ll need to put away far less each month for retirement than someone who started later.Consider this example from Vanguard: If at age 25 you begin investing $10,000 a year and stop entirely at age 40, you’ll have more than$1 million at age 65. If your friend starts investing that same amount, but waits until 35 to do it, even after 30 years of consistently investing, she’ll still end up with $200,000 less than you.

  3. Play catch-up if you need to. If you didn’t start early, don’t freak out: You can play catch-up, as the IRS allows you to put more money into your retirement account when you hit 50 and beyond: While most employees can put a max of $19,500 into their 401(k) plan, if you’re over 50, you can sock away an additional $6,500. This timing is often good for many people, as the costs of children tend to be less as we age, and we’ve often paid off things like student loans that may have prevented us from saving more.