How to save more money | Fidelity (2024)

Increasing your savings by just 1% now could mean a lot in retirement.

Fidelity Viewpoints

How to save more money | Fidelity (1)

Key takeaways

  • Consistently saving a little bit more can add up over time.
  • Whether it's $10 or $100, saving money early in life, doing it consistently, and increasing the amount you're able to save over time can help you live the life you want in retirement.

Often it's the little things in life that can make the biggest difference. That's true when it comes to saving for retirement. Putting just 1% more into a tax-advantaged retirement account like a 401(k), 403(b), or an IRA could make a noticeable difference in your lifestyle in retirement. Whether you choose to make Roth or traditional contributions, the benefits of saving just a little more now can pay off later.

Read Viewpoints on Fidelity.com: Traditional or Roth account—2 tips for choosing.

"Saving for retirement may seem like a steep mountain to climb, but the climb doesn't have to be as steep as it looks," says Ann Dowd, vice president at Fidelity. "Small steps now can turn into big strides later."

While 1% is a small percentage of your annual earnings today, after 20 or 30 years it can make a big difference in your account balance when you retire. That's because the longer you give your money a chance to grow, the better. And it works no matter how old you are—or how far off retirement is.

Let's look at some examples.

How to save more money | Fidelity (2)

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How to save more money | Fidelity (3)

This information is intended to be educational and is not tailored to the investment needs of any specific investor.

*Approximation based on a 1% increase in contribution rate. Continued employment from current age to retirement age, 67. We assume you are exactly your current age (in whole number of years) and will retire on your birthday at your retirement age. Number of years of savings equals retirement age minus current age. Nominal investment growth rate is assumed to be 5.5%. Hypothetical nominal salary growth rate is assumed to be 4% (2.5% inflation + 1.5% real salary growth rate). All accumulated retirement savings amounts are shown in future (nominal) dollars. This assumes no loans or withdrawals are taken throughout the current age to retirement age.

Your own plan account may earn more or less than this example and income taxes will be due when you withdraw from your account. Investing in this manner does not ensure a profit or guarantee against a loss in declining markets.

Investing involves risk, including the risk of loss.

See your numbers

Want to create an example like the ones shown above to see what a difference even a 1% increase can make for you? Use our interactive tool.See how a small change can make a BIG DIFFERENCE.

Consider small steps

As you can see in our examples—and probably in your own too—small weekly amounts like $12, $14, and $16 can make a noticeable difference in your savings. So how do you find the money? We won't say to skip buying something if you really need it, but there are probably places in your spending that may be easy to cut. Even bringing your lunch or using coupons could save you $16 or more. And the beauty of 401(k) contributions is that they come right out of your paycheck, so you may not even miss the spending money.

If a one-time bump-up isn’t ideal now, consider aiming to increase contributions each year. For instance, if your 401(k) lets you set automatic increases every year, consider signing up. If you usually get a raise each year, you may be able to time the increase to happen when you get a bump in pay so you won't feel the impact in your paycheck.

Consider saving 15%

We ran the numbers and determined that aiming to save 15% of income toward retirement annually—which includes any matching contributions or profit sharing an employer may make to a workplace retirement account like a 401(k) or 403(b)—can help ensure that you can maintain your lifestyle in retirement.

Read Viewpoints on Fidelity.com: How much should I save each year?

Not saving that much? Don't fret. Few people get there overnight. Think of planning for retirement as a journey. The key is to save as much as you can now and try to increase savings over time. If possible, save at least enough to get any match from your employer.

"Starting early, saving regularly, and increasing the amount you save as your income increases will help you to achieve the retirement you envision," says Dowd.

Don't have a 401(k)?

You may be self-employed or maybe your employer doesn't offer a 401(k). But you can save in a tax-advantaged account like an IRA. There are several types of IRAs.

In 2023, the annual contribution limit for IRAs, including Roth and traditional IRAs, is $6,500. In 2024, the annual contribution limit for IRAs, including Roth and traditional IRAs, is $7,000. If you're age 50 or older, you can contribute an additional $1,000 annually.

See how you're doing

We made it easy to begin measuring how you are doing when it comes to saving for retirement. Answer 6 simple questions to get The Fidelity Retirement ScoreSM. It's like a credit score for retirement. Whatever your score, you can take some simple, clear steps to stay on track or improve it.

Go for it

Challenge yourself to save a little more. Whether it's a 1%, 3%, or even 5% increase, the extra money saved today could make a big difference in helping achieve the retirement you envision. Think about it this way: Do you want to be worrying about money in retirement?

Are you on track for retirement?

Review your retirement savings plan and see how small changes could improve your outlook.

More to explore

Consider an IRA

Take advantage of potential tax-deferred or tax-free growth.

Retirement rules of the road

Our 4 simple guidelines can help you reach your retirement goals.

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How to save more money | Fidelity (2024)

FAQs

How to save more money | Fidelity? ›

Fidelity's suggests following the 50/15/5 rule, which means allotting 50% of your income for necessary expenses, 15% for retirement (including employer match), and 5% for short-term savings, like an emergency savings. You're free to spend the remaining amount on whatever you'd like, including other financial goals.

How to save $10,000 fast? ›

6 steps to save $10,000 in a year
  1. Evaluate income and expenses. To make room for saving, you'll need a meticulous budget that outlines all your sources of income and all your expenditures. ...
  2. Make an actionable savings plan. ...
  3. Cut unnecessary expenses. ...
  4. Increase your income. ...
  5. Avoid new debt. ...
  6. Invest wisely.
Apr 2, 2024

How to save $1,000 in a month? ›

Unlock Your Savings: 5 Proven Strategies to Save $1K in 30 Days
  1. #1. Budget Like a Boss.
  2. #2. Set Goals that Stick:
  3. #3. Watch Those Little Leaks:
  4. #4. Savvy Saving Account Choices.
  5. #5. Emergency Fund- Your Financial Firefighter.
  6. Keep on Keeping On.

What is the 30 day rule to save money? ›

The 30 day savings rule is simple: the next time you find yourself considering an impulse buy, stop yourself and think about it for 30 days. If you still want to make that purchase after those 30 days, go for it.

How to save $5,000 fast? ›

Ways To Save $5,000 in a Year
  1. “Chunk” Your Savings. The first step to saving $5,000 in a year is to break down your savings goal into manageable portions. ...
  2. Automate Your Savings. ...
  3. Save in a High-Yield Saving Account. ...
  4. Track Your Cash Flow. ...
  5. Boost Your Earnings. ...
  6. Declutter for Cash. ...
  7. Evaluate Your Subscriptions. ...
  8. Challenge Yourself.
Jul 11, 2024

How to turn $10,000 into $100,000 fast? ›

How To Turn 10k Into 100k
  1. Invest in Real Estate. ...
  2. Invest in Cryptocurrency. ...
  3. Invest in The Stock Market. ...
  4. Start an E-Commerce Business. ...
  5. Open A High-Interest Savings Account. ...
  6. Invest in Small Enterprises. ...
  7. Try Peer-to-peer Lending. ...
  8. Start A Website Blog.
Jun 21, 2024

What is the 50 30 20 rule? ›

The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings.

Is saving $500 a month good? ›

The short answer to what happens if you invest $500 a month is that you'll almost certainly build wealth over time. In fact, if you keep investing that $500 every month for 40 years, you could become a millionaire.

Is $1000 a month in a 401k good? ›

If you start by contributing $1,000 a month to a retirement account at age 30 or younger, your savings could be worth more than $1 million by the time you retire. Here's how much you should expect to have in your account by the time you retire at 67: If you start at 20 years old you should have $2,024,222 saved.

Is saving 1k per month good? ›

So to answer your question, if $1,000 a month is about 10% of your income, then you're doing good and putting back a recommended amount. If that is more than 10% of your income…then kudos to you for being able to lay back more than 10%.

What is the 80 20 rule in saving? ›

The 80/20 rule breaks out putting 20% of your income toward savings (paying yourself) and 80% toward everything else. Once you've adjusted to that 20% or a number you're comfortable with saving, set up automatic payments to ensure you stick to it.

How to live on less money? ›

These seven tips may be able to help.
  1. Understand your current financial habits. Not sure how to start spending less? ...
  2. Create an effective budget and stick to it. ...
  3. Look for ways to reduce spending. ...
  4. Set financial goals for future success. ...
  5. Save for emergencies or major purchases. ...
  6. Pay down debt. ...
  7. Stay aware of lifestyle creep.

How can I save up quickly? ›

See which of these suggestions could make the biggest financial impact on your bottom line.
  1. Cancel unnecessary subscription services and memberships. ...
  2. Automate your savings with an app. ...
  3. Set up automatic payments for bills if you make a steady salary. ...
  4. Switch banks. ...
  5. Open a short-term certificate of deposit (CD)
Feb 26, 2024

What if I save $5 dollars a day? ›

If you put aside $5 per day, that's approximately $150 per month. And over the course of 30 years, you will have saved around $55,000 total. While that's a good chunk of change, it isn't $1 million or anywhere near it. The key is to invest those savings in a growth-focused ETF like the Invesco QQQ Trust.

What is the 100 day envelope challenge? ›

It works like this: Gather 100 envelopes and number them from 1 to 100. Each day, fill up one envelope with the amount of cash corresponding to the number on the envelope. You can fill up the envelopes in order or pick them at random. After you've filled up all the envelopes, you'll have a total savings of $5,050.

How to save $10,000 easily? ›

The easiest way to do this is by setting monthly savings goals. To save $10,000 in a year, you'll need to save about $833 each month, or around $192 per week. You can look through your budget for ways to reallocate more of your money toward savings.

Can I save $10,000 in 3 months? ›

You can. Between working extra hours, cutting back on unnecessary expenses, and using creative savings methods, it's possible to save up $10,000 in just three months. You may have to make some sacrifices, but it will be worth it when you reach your goal.

How long would it take to save 10k? ›

How long will it take to save?
Savings GoalIf You Saved $200/monthIf You Saved $400/month
$10,00050 months25 months
$20,000100 months50 months
$30,000150 months75 months
$40,000200 months100 months
7 more rows

How to get $10 000 fast? ›

Here are ten ways to make $10k quickly:
  1. Become A Freelancer. Freelancing is one of the most popular ways to make money quickly. ...
  2. Invest In Cryptocurrency. ...
  3. Participate In Online Surveys. ...
  4. Become A Virtual Assistant. ...
  5. Do Odd Jobs. ...
  6. Create An Online Course. ...
  7. Become An Affiliate Marketer. ...
  8. Sell Your Stuff.

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