Shoot for 10

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 sound strategy 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 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.

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 nest egg at an even faster pace. Visit irs.gov 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?

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