Are You Saving Enough for Retirement? 6 Foolproof Ways to Tell

woman crossing her fingers
You can’t just cross your fingers and hope for the best in retirement. |

Depending on how you feel about personal finance, retirement planning is either nowhere on your radar or it’s a major financial priority. Perhaps you’re somewhere in between. Regardless of how you feel about the planning process, the important thing is that you’re saving enough money so you can live comfortably during your golden years. However, that goal will be nearly impossible to reach if you aren’t taking steps toward building your nest egg. Don’t let the years go by until one day you look up, and all that’s left in your nest are a few feathers and old branches. Assess your retirement savings approach now before it’s too late.
If you find you’re not saving enough for retirement, there are plenty of people in the same boat. According to Northwestern Mutual’s Planning and Progress Study 2016, two-thirds of Americans believe there’s some chance they’ll outlive their savings; about 14% believe there’s a 100% chance they’ll prematurely run out of retirement savings. Unfortunately, 44% have done nothing about the possibility of going broke during retirement.
The study’s researchers said this failure to prepare is unsettling considering concerns about the future of Social Security. “The prospect of an extended retirement in an environment of diminishing safety nets makes it even more essential that your financial plan is flexible enough to stretch as long as needed,” Rebekah Barsch, vice president of planning for Northwestern Mutual, said in a statement.
Planning for life after you leave the workforce is essential. Here are six signs you’re saving enough for retirement.

1. You have a solid savings plan

saving money
Stick to a plan. |

It will be difficult to save enough for retirement if you don’t know how much money you need to save. You can tell right away you’re not on the path to a healthy nest egg if you don’t have a good plan in place. One way to get started on your retirement savings plan is to make use of the many retirement tools available. You can do a quick internet search to find resources such as retirement income calculators, life insurance calculators, and Social Security information.

2. You’re saving at least 10% of your income

raining money
Use a retirement calculator. |

When it comes to retirement, you should save as much as you comfortably can. However, the general recommendation is to save at least 10% to 15% of your income. Your best bet is to start by getting a rough estimate from an online retirement calculator and then meeting with a financial planner so you can get the number that is specific to your situation.

3. You have a financial back-up plan

planning for retirement
Plan A might not work out. |

And we don’t mean going back to work full-time. We mean if one source of savings falters, you have another source to back it up until your finances normalize. You have multiple income streams, such as real estate investments, an additional savings account for emergencies, or a side business.
Jim Poolman, former North Dakota insurance commissioner and executive director of the Indexed Annuity Leadership Council, told The Cheat Sheet it’s also important to decide how you want to live during retirement. Once you know what standard of living will be most comfortable, you can plan from there.

Figure out what lifestyle you want to have and how much that would cost per month now. The pitfall many make in figuring out retirement needs is underestimating basic needs plus lifestyle wants. Folks assume costs go down in retirement but that’s very often not the case. Use tools like the retirement income calculators at to help you see what you should be saving and judge from there.

4. Your investments are diversified

retirement nest egg
Don’t put all your eggs in one basket. |

While it’s great to have a healthy stock portfolio, you should also be prepared in the event your stocks tank and you start losing a significant amount of money. Instead of having all your money tied up in stocks, also prepare for inevitable economic downturns by having a diversified retirement savings strategy. Putting all your eggs in one basket (or nest, in this case) could spell trouble. In addition to having a diversified portfolio also make sure to continue nurturing other streams of income.

5. You’re maxing out your retirement accounts

piggy bank with dollars
Don’t leave money on the table. |

Saving up to the max in your retirement accounts is a clear sign you’re ahead of the retirement savings game. For 2017, if you participate in a 401(k), 403(b), most 457 plans, or the federal government’s Thrift Savings Plan, you’re allowed to contribute an annual maximum of $18,000. And if you’re age 50 or older, you can make catch-up contributions in the above plans up to $6,000. Maximum annual contributions to an IRA are capped at $5,500. The annual catch-up contribution for an IRA is a bit lower at $1,000.

6. You’re living at or below your means

Couple making salad together in the Kitchen
Always be saving. |

If you’re not living within your means, it’s likely you’re not saving enough (or at all) for retirement. Generally, if you’re living paycheck to paycheck, every dollar is being spent on debt and basic living expenses. If this describes you, it’s time to add income and cut back spending. You should also seek assistance from a financial professional such as a financial planner or a certified credit counselor. Get your daily finances under control so that you can maximize your retirement savings potential.
Ryan Kay, a certified financial planner, said living above your means will gradually erode your ability to save for retirement. “If you aren’t living within your means (i.e. you don’t pay off your credit card completely each month), that’s a sign you may not be saving enough for retirement. You have to be spending less than you earn in order to build wealth and be able to retire comfortably,” Kay told The Cheat Sheet.
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