Kindergarten songs helped you memorize all of the U.S. state capitals as well as the year Christopher Columbus sailed the ocean blue. Sadly, no one taught you any jingles about retirement planning. It's okay. Given the state of retirement savings in America, it's clear you're not alone.

Experts recommend targeting savings of $1 million or more for a comfortable retirement, but studies routinely show Americans lagging behind that number. 2019 research from Transamerica Center for Retirement Studies found median retirement savings ranges from less than $3,000 up to $222,000, depending on the household's income. The same report concludes that baby boomers, who are aged 56 to 74 in 2020, have median savings of only $152,000.

A woman taking notes at her laptop

Image source: Getty Images.

If those stats inspire you to take a crash course in retirement planning, you're in the right place. Here are five must-know retirement fundamentals to help you enjoy those senior years in style.

1. Save 15% of your income

There's no getting around it. To have a comfortable retirement that doesn't involve a tiny home, you have to save. Shoot for retirement plan contributions equal to 15% of your income. Stash those deposits in your workplace 401(k), if you have one. The annual 401(k) contribution limit in 2020 is $19,500, or $26,000 if you're 50 or older.

If you don't have access to a 401(k), open a Roth IRA or a traditional IRA. You can't contribute as much to an IRA as to a 401(k), but you do get some nice tax benefits. Roth IRAs have tax-free withdrawals after age 59 and a half, while traditional IRA contributions are often pre-tax. Both the Roth and traditional IRAs provide for tax-deferred earnings.

Between the two accounts, you can contribute a total of $6,000 annually in 2020, or $7,000 if you're 50 or older. Know that Roth IRA contributions are subject to income limitations. Single filers who make more than $139,000 are not eligible for Roth IRA contributions. Same goes for married filers whose income exceeds $206,000. There are no income limitations on traditional IRA contributions.

Once you max out your annual IRA contributions, open a taxable brokerage account and save money there. You won't get the tax benefits, but taxable investing is better than no investing.

2. Use the rule of 110

The rule of 110 guides you to an appropriate asset allocation for your age. Asset allocation is the composition of your portfolio across different types of investments, such as stocks and bonds. Stocks have a higher growth opportunity than bonds, but they're also more volatile. Managing that composition is a key step in balancing risk with growth opportunity. As you near retirement age, your asset allocation should get more conservative to reduce the risk you're taking and protect your capital.

To use the rule of 110, subtract your age from 110. The result is the percentage of your portfolio that should be held in stocks. At 40, your portfolio would be comprised of 70% stocks or stock funds and 30% bonds or bond funds. At age 60, you should hold 50% stocks and 50% bonds.

3. Invest in low-cost mutual funds

When you're just beginning your investing journey, you might not have enough cash on hand to build a diversified portfolio of stocks. Plus, who wants to do all of that research? A simpler route is to invest in low-cost mutual funds. They're already diversified for you, and the ones that track stock market indices like the S&P 500 will deliver market-level returns.

Index funds such as Vanguard Total Stock EFT (NYSEMKT:VTI) and SPDR S&P 500 ETF (NYSEMKT:SPY) are attractive for their broad market coverage and extremely low fees, less than 0.1%.

4. Buy and hold

Buy and hold is an investment strategy that involves staying in the same investments for long periods of time. This means no cashing in on profits as soon as a position goes up. It also means not getting spooked into selling when the market dips. The market goes up and down from year to year, but the long-term trend has always been up. A buy-and-hold strategy helps you capitalize on that.

5. Plan for 6% to 7% average annual returns

Online savings calculators can quickly project your portfolio growth at different contribution levels, and that might help you identify how much you should save monthly to reach your goals. However, those calculators rely on a growth rate assumption. If you base that assumption off of your portfolio's recent performance, your projections might be way off.

In 2018, for example, the S&P 500 fell 6.24%. The large-cap index then charged ahead in 2019, ending the year with a 28.88% gain. The lesson? You can't bank on double-digit returns every year, nor should you assume the market's going to take all your money.

A middle ground is to expect 6% or 7% average annual growth from your portfolio. This is in line with the average annual growth of the market over the last 50 years, adjusted for inflation.

Retirement chapter summary

To wrap up, you just learned the five S's of retirement planning:

  • Save 15% of your income.
  • Steer your portfolio in the right direction using the rule of 110.
  • Simplify your investment choices with low-cost mutual funds.
  • Stay in the market through the ups and downs.
  • Six to seven percent is your target growth rate.

If you want to turn it into a song, try putting it to the tune of, "If You're Happy and You Know It" -- but we'd suggest swapping out "clap your hands" with "save your cash."

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.