a man prepares to shoot a basketball at outdoor park

Shoot for 10

Dec 1, 2020
Empower Insights

How saving 10% can help you score big for your retirement. 

The ball is in your court.


When it comes to creating a successful game plan for your future, there are many healthy habits you can add to your financial playbook to help you stay on a winning path and realize your goals for retirement.1

One of the best retirement savings strategies to add to your normal routine is to begin contributing 10% (or even more) to your retirement plan account. Just like on the basketball hardwood, where recording 10-plus points, assists and rebounds can lead to a positive result, deferring double-digits of your salary can help you achieve your best outcome. After all, Empower Retirement insight reveals individuals who set their contribution rate to at least 10% are on track to replace 100% of their working income down the road.2

Simply put, your contribution rate is the percentage of your earnings that is deducted from your paycheck and moved into your retirement plan account. In most cases, you choose the value you want to pitch in.3 While your take-home pay will be reduced, your retirement nest egg has the potential to keep growing.

If you’re unable to allocate 10% right now, don’t worry. Committing 10% from your regular pay isn’t feasible for everyone. Based on your current career, lifestyle and outlook, you may not have the capacity to earmark such a high percentage when you’re focused on covering all of today’s pressing priorities.4

But, by following the X’s and O’s below, you can make progress and start saving 10% sooner than you may think.

animated graphic showing ball bouncing over stacks of coins and into hoop

Enroll immediately

The earlier, the better.

If you’re eligible to participate in your employer-sponsored retirement plan, don’t wait any longer to join the action. Even if you can’t afford to sock away 10% from the start, you can still boost your balance thanks to compound growth.This valuable benefit allows you to “earn interest on your interest” as any of your potential earnings are reinvested — tax-free — in your retirement account.5

Above all, as you’re climbing the ladder toward 10% as you age, your balance can continue to rise with you.

Push forward

Little by little, you can make big strides. 

If you want to score more money for your future, consider accelerating your percentage by 1% at the beginning of every January until you arrive at the 10% target. To remain on schedule (and so you don’t forget!), check with your provider to see if it offers an automatic escalation feature, which can help you gradually gain ground each year. As Empower research suggests, employees in retirement programs with auto-increases are on track to replace over 105% of their income in the long run.6

But why stop at 10%?

Giving maximum effort and deferring up to IRS limits can help you strengthen your retirement nest egg at an even faster pace. Visit irs.gov  to show 2020 and 2021 numbers to determine how much you’re eligible to stockpile on an annual basis.7

Don’t quit!

Whether you create an emergency fund, build a budget or avoid taking on new debt, establishing any new exercise requires a championship mentality. That’s why it’s often recommended to take “baby steps.”8

So, if you’re feeling overwhelmed while attempting to designate 10% for retirement, call a timeout and review your approach. Are there small changes you can propose to trim your spending and raise your savings? This is how you save money fast.

Maybe it’s sacrificing your morning mocha, canceling your premium movie channel subscription or packing your lunch throughout the week. Deciding to pass up on a $4 gourmet cup of coffee every day, for example, can mean more than $1,000 per year in extra cash. If you invest those dollars over a 25-year span, with a modest rate of return, you could have an additional $35,000 for your future.*4

Plan for your future with an Empower Investment Account

1 Empower Retirement, “Healthy savings habits: Simple exercises for strengthening your financial future,” October 2020.

2 Empower Institute, “Scoring the Progress of Retirement Savers 2020,” September 2020.

3 CNN Business, “Ultimate Guide to Retirement,” October 2020.

4 Empower Institute, “The Road to Retirement Success: Strategies to decode human nature and improve employee savings,” August 2018.

5 USA Today, Katie Brockman, “Millennials and Gen X need $2 million to retire. Here's how compound interest can help reach that goal,” August 2020.

6 Empower Institute, “Success for Savers Through Design or Default: Three ways to encourage better savings habits,” November 2018.

7 irs.gov

8 CNBC, Jade Scipioni, “Stanford scientist: 12 tiny habits that will instantly make you more productive,” February 2020.

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Carefully consider the investment option’s objectives, risks, fees and expenses. Contact Empower Retirement for a prospectus, summary prospectus for SEC-registered products or disclosure document for unregistered products, if available, containing this information. Read each carefully before investing.

Securities, when presented, are offered and/or distributed by GWFS Equities, Inc., Member FINRA/SIPC. GWFS is an affiliate of Empower Retirement, LLC; Great-West Funds, Inc.; and registered investment adviser, Advised Assets Group, LLC. This material is for informational purposes only and is not intended to provide investment, legal or tax recommendations or advice.

IMPORTANT: The projections, or other information generated on the website by the investment analysis tool regarding the likelihood of various investment outcomes, are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. The results may vary with each use and over time.

Investing involves risk, including possible loss of principal.

Insurance products are issued by or offered through Great-West Life & Annuity Insurance Company, Corporate Headquarters: Greenwood Village, CO; or in New York, by Great-West Life & Annuity Insurance Company of New York, Home Office: New York, NY. Guarantees are subject to the terms and conditions of the contract and the claims-paying ability of the insurer.

The managed account service is part of the Empower Retirement Advisory Services suite of services offered by Advised Assets Group, LLC, a registered investment adviser.

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