Not Being Able to Save Enough for Retirement

Maybe you’ve heard how much money you’ll need to retire, and the figure seems overwhelming. But you have lots of years ahead of you to save. Here’s how to estimate your retirement needs and start a smart savings and investment plan now.

By Temma Ehrenfeld

Amassing enough money to retire when you want may seem daunting. But don’t be discouraged. Remember, you have many years ahead of you to save.

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One way to help lessen anxiety is to create a sound savings and investment plan. Here are some suggestions.
Estimate your needs

Start with a rough estimate of the money you’ll want for retirement and get a sense of the income you can expect.
  1. Check to see what your Social Security benefit is likely to be, and find out if there is a pension program where you work.
  2. Run the numbers with My Retirement PlanSM, our online retirement savings calculator.


Remember, women tend to live longer than men — a 65-year-old woman today can expect to live another 20 years, according to the Centers for Disease Control — so you’ll need to plan for a long retirement. Of course, a financial advisor can also help you with these calculations.

Save before you spend

Aim to save at least 10% of your current income, depending on the results of your retirement estimate. You may not want to sign up for a mortgage, private school for your children, or any other large obligation unless you’re saving enough for retirement. You should also consider putting retirement funding ahead of saving for your kids’ college tuition.

If you can’t meet a savings goal such as 10% of your current income, aim to earn more or spend less, or both. A good first step is taking a hard look at where your money is going.
  • One way to do that is to pay for everything with a debit card (or by check) and examine your statement carefully at the end of three months.
  • Budgeting software can help: Try Quicken.com or Mint.com.
  • A spending worksheet can also help you keep expenses in line.


To get a sense of how your savings can potentially build up over time, use the Wells Fargo Compounding Calculator. If you invest $100 a month, for instance, and earn 6%, after 30 years you’ll have $100,000. You will have contributed $36,000 yourself and earned the rest.

Save automatically

This is fairly easy to do when you have a 401(k) or another employer-sponsored retirement plan at work. If you don’t have one, think about setting up automatic transfers from a savings or checking account into an IRA.

With an automatic investment program, you’ll keep buying investments even when prices are falling. When other people may be pulling out of the market in a panic, you’ll be buying at potentially lower prices. On the other hand, in boom markets, when many people are pouring money into the market, you’ll still be buying—but not overreacting to the excitement.

This is a form of the investment strategy called dollar-cost averaging: You buy more shares when investment prices are low and less when they’re high, because you spend the same amount of money on your investments each time. Please be aware that a periodic investment plan such as dollar cost averaging does not assure a profit or protect against a loss in declining markets. Since such a strategy involves continuous investment, you should consider your ability to continue purchases through periods of low price levels.
Invest in your health

Studies show that women’s retirement worries tend to focus on declining health and rising healthcare costs. There’s some basis for that fear: Out-of-pocket costs for healthcare in retirement can be very high, and because women tend to live longer than men, their healthcare costs will last longer too. But here’s a pleasant surprise: According to the CDC’s National Center for Health Statistics, most Americans have no “limitation of activity” from chronic illness between the ages of 65 and 84. Maintaining a healthy weight, exercising regularly, reducing stress, and treating mood problems can help you feel better — and save money — all the way through retirement.
Ways to save, large and small

  • Limit your ATM withdrawals and pay cash whenever possible.
  • Consolidate your debt to lower-interest credit cards and pay them off.
  • Travel locally or enjoy vacation time at home.
  • Use doctors within your insurance network.
  • Cut out monthly costs for services that you rarely use (like paid TV).
Temma Ehrenfeld has written for CBS MoneyWatch, Fortune, the New York Times, and Newsweek. The opinions expressed in this article are those of the author and are not necessarily those of Wells Fargo Advisors or its affiliates.

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