How to Check Your Retirement Progress

If you are actively saving for your retirement, then good job! You’re actually further along than a good proportion of your compatriots. (According to a report released by the Federal Reserve, one in five people in the U.S. nearing retirement age has saved nothing at all.) But before you break your arm patting yourself on the back, how do you know if your retirement savings are on track? It’s important to ask that question now because it will be much harder to course correct as you near retirement than if you start making changes as soon as possible. The best way to figure out if you are saving enough for retirement is to perform a yearly Retirement Progress Checkup.

What is a Retirement Progress Checkup?

A retirement progress checkup is an evaluation that uses your current retirement savings habits to project what your retirement savings will look like as you near retirement. The result of the retirement checkup can let you know how likely it is that you will be able to achieve the retirement you want. If you are falling behind, you’ll have the incentive you need to start saving more or to revise your retirement expectations.

How to Perform a Retirement Progress Checkup

Ready to perform your retirement checkup?

Step One: Schedule a few hours on your calendar.

Step Two:  Figure out the total amount of your current retirement savings. This should include your 401(k), IRAs, Roth IRAs, and the other investments you‘ll use to fund your retirement.

Step Three: Determine what portion of your total investments are in stocks, stock mutual funds and stock ETFs, and what portion are in bonds, bond mutual funds, and bond ETFs. All cash savings can be included in your bond percentage.

Step Four: Head on over to your favorite retirement calculator. (Here is a good one from T. Rowe Price.) The calculator will ask you to plug in the investments that you’ve already compiled along with personal information such as your age, salary, planned retirement date, and the amount you’ll be saving for retirement each year. You will also be asked to plug in your Social Security benefit, which you can find on the Social Security Administration’s Retirement Estimator.

When you input all of your information, the calculator will be able to estimate your chances of retiring on time, on 75% of your projected pre-retirement salary.

Assessing Your Retirement Results

If the calculator gives you an 80% chance of success or higher on meeting your retirement goals then you are in good shape as long as you continue your good savings habits. If your calculator gives you some bad news, don’t panic! You still have time. The smartest thing you can do to help put your retirement back on track is to increase the amount you put into your retirement accounts each month. You may also want to consider putting your retirement off by a year or two or even embracing semi-retirement and working part-time for a few years to lower the burn rate of your savings.

Need help saving for retirement? Recruit your friends and family to hold you accountable by starting a Money Club. For even more great retirement savings tips, read our full archive of educational articles about how to finance your perfect retirement.

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7 thoughts on “How to Check Your Retirement Progress”

  1. Pingback: What Are I Bonds and Can They Protect Your Retirement Savings from Inflation? - Investment Policy Wealth

  2. My friend is trying to draw spousal benefits from another state and she lives in NC . Is it legal for her to draw her own SSI and get SSI spousal benefits from another state ? I don’t think so !!

  3. Dear ginita wall I need help my husband was married for only six years to his ex-wife but his lawyer wrote in the divorce he notice months later that in the quadro that when he retired that she get have of . And it doesn’t say how many years she gets it’s or when it stop but she shouldn’t be getting anything they were only married for six please tell us how to fight this

    1. I’m sorry, but I’m not an attorney and I am not familiar with the laws of your state. But if he was married for six years, then a portion of his retirement was earned during the marriage and it is quite likely that they provided that she get half of that portion. Have someone who can interpret that agreement read it and tell your husband what it says and whether he has any grounds to set any portion of it aside.

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