How much do you think you’ll want to save to enjoy a comfortable and fulfilling retirement? A recent Northwestern Mutual study found that Americans believe they will need $1.46 million, on average, to retire comfortably. Your personal number may be higher or lower depending on your lifestyle, family needs, housing costs, health, retirement age, and other sources of income. But the message is clear: retirement requires intentional, consistent saving.
Pay Yourself First
Retirement, for most of us, will be the most expensive “purchase” of our lives. Social Security is only a partial solution; alone, it does not provide sufficient income. No bank will give you a loan to pay for retirement. And, you won’t want to burden your children with your care. This means that you are responsible for your financial security during the 30 or 40 years you spend in retirement.
Successfully saving for retirement requires paying yourself first. When savings come last, they rarely happen consistently. When savings come first, other goals tend to adjust around them.
Paying yourself first means investing in your retirement before lifestyle and discretionary spending. Saving is not what remains; it’s what leads. It places your focus on the long-term effects of compounding, not market timing or short-term market fluctuations.
That’s why it’s so important to set up a salary reduction agreement with your employer. This ensures that your retirement savings are deducted from your paycheck (either pre-tax or Roth) and deposited directly into your JRB retirement account.
Paying yourself first also means staying focused on long-term growth, diversification, and consistency, rather than trying to time the market or react to short-term market movements.
A target date fund can provide a professionally managed, diversified investment mix in a single option. Participants who prefer to build their own allocation can choose among JRB’s carefully monitored, diversified, and cost-conscious investment options.
How Much Should I Save?The JRB recommends that retirement savers invest 10% to 20% of their earnings. This can come from your salary reduction contribution and/or an employer match. Don’t let that goal prevent you from getting started! Begin by saving an amount that is sustainable and resolve to increase the amount you save by one percent annually. Increase your salary reduction contribution when you get a raise and you won’t even notice it. |
Starting Early Gives You a Leg Up
Imagine you are in your mid-twenties, earning $66,000 annually, and your salary increases by 3.7% each year. If you save 10% of your salary for 43 years, you would contribute about $670,000 over your working career. Assuming a 6% average annual investment return, your account could grow to more than $2 million by around age 68.
That is the power of compounding. The earlier you start, the more time your contributions have to grow.
There is another path – the “early sprint.” Suppose you start in your mid-twenties and contribute the 2026 federal maximum of $24,500 for five consecutive years. Before any employer contribution or future increases in contribution limits, you would contribute $122,500. Assuming a 6% average annual investment return and no further contributions, those early contributions could grow to approximately $1.3 million by retirement after a 43-year investment period.
Waiting Makes It Harder – But You Can Do It
The later you start, the less benefit you receive from compound interest and investment returns. That means late-career savers often need to contribute more aggressively than someone who started in their twenties or thirties. But meaningful progress is still possible.
The following example is based on a 35-year-old person making $106,000 whose salary increases 3.7% annually. Saving 15% of salary for 30 years, total contributions would be about $850,000. Assuming a 6% average annual investment return, the account could grow to nearly $1.9 million.
For example, assume a participant begins maximizing retirement contributions at age 50 and continues through age 67, retiring around age 68. Using 2026 federal contribution limits, the participant could contribute $32,500 per year from ages 50 through 59, $35,750 per year from ages 60 through 63, and $32,500 per year from ages 64 through 67.
Over those 18 years, that would equal approximately $598,000 in employee contributions.
Assuming a 6% average annual investment return and no withdrawals, those contributions could grow to approximately $1 million by retirement. This example does not include employer contributions or future increases in federal contribution limits, both of which could increase the ending balance.
Conclusion
There is no single path to generating $1 million in retirement savings. Those starting early have an advantage because they will benefit from many more years of compound interest and investment returns. But, even those starting in mid-career can achieve this retirement milestone.
The key is to begin, stay consistent, and pay yourself first.
May 2026
This information is for general purposes only and does not constitute legal, tax or investment advice.
The examples are hypothetical and are for educational purposes only. They assume annual salary growth of 3.7%, an average annual investment return of 6%, no withdrawals, and no taxes or fees beyond those reflected in the investment return assumption.