4 Red Flags That Your Retirement Plan Is Off Track

It's easy to assume your retirement plan is on track, especially if you're saving something. But many people fall behind without realizing it, and a few simple missteps could be costing you years of progress.

Here are four red flags that could signal trouble -- and what you can do to course-correct now.

1. You don't know your retirement number

One of the biggest retirement red flags is saving money blindly, not knowing how much you actually need to retire comfortably. You can't hit a target you haven't set.

A basic rule of thumb is to aim for enough savings to replace about 80% of your pre-retirement income each year. But your real number depends on your lifestyle, health, location, and all kinds of other factors.

You might use something called the "4% rule," which dictates that in your first year of retirement, you withdraw 4% of your total investment savings. After that, you increase the amount you take out each year to keep up with the pace of inflation. With this approach, you should be able to easily make your money last for a 30-year retirement.

If you're following the 4% rule, then finding your retirement number is easy. Simply multiply your target income (not including Social Security or a pension) by 25. For example, if you want $60,000 per year in retirement, $60,000 × 25 = $1.5 million.

You can also use an online retirement calculator or talk to a financial advisor to estimate how much you'll need -- and how much you should be saving now to get there. Once you do that, you'll have a clear target you can aim for.

2. You aren't increasing your contribution as income grows

If you got a raise recently but didn't increase your retirement contributions in kind, that's a missed opportunity.

Many people stick with the same contribution percentage they chose years ago, even as their salary grows. But if your lifestyle keeps getting more expensive while your savings stay flat, you could risk falling behind later. That means your savings go up in dollar terms, but not fast enough to match your growing lifestyle and future needs.

That's why raising the percentage of your contribution is important: you can stay ahead of rising costs, catch up if you started late, and avoid overspending with your increased income. The more you save now, the more freedom you'll have later.

Experts often recommend saving at least 15% of your income for retirement, including any employer match. Combined with Social Security, this will be enough in most cases to let you retire comfortably. If you're not there yet, try boosting your contributions by 1% each year, or whenever you get a raise.

Ready to start saving for retirement? Our partner SmartAsset's no-cost quiz makes it easier to find a fiduciary financial advisor.

3. You're leaving free money on the table

If your employer offers a 401(k) match and you're not contributing enough to get the full match, it means you're leaving free money on the table.

Let's say your company offers a 50% match on your contributions for up to 6% of your salary. If you make $60,000 and only contribute 3%, you're giving up $900 a year in free money. Over time, that can add up to tens of thousands in missed retirement savings thanks to compound interest.

Make sure you're contributing at least enough to get the full match. It's one of the easiest ways to grow your savings without increasing out-of-pocket costs.

4. You're not taking advantage of a Roth IRA

A Roth IRA can be one of the most powerful retirement tools, especially if you expect your tax rate to go up in the future.

With a Roth IRA, you contribute after-tax dollars toward retirement instead of pre-tax dollars -- but your money grows tax-free, meaning you can withdraw it tax-free in retirement. This is especially useful for younger people in lower tax brackets, or anyone who expects to make more money later in life.

Keep in mind, not everyone qualifies for a Roth IRA. In 2025, you can only contribute the full amount if your modified adjusted gross income is below $150,000 for single filers or $236,000 if filing jointly.

Even if you already have a 401(k), a Roth IRA can still be worth investing in. It gives you tax-free income in retirement, more control over your investments, and no required minimum distributions (RMDs) later in life. Those younger than 50 can contribute up to $7,000 a year to a Roth IRA, while those 50 and older can contribute $8,000, as long as their income remains below specific limits.

If this all seems overwhelming, you can get matched with up to three fiduciary advisors with our partner, SmartAsset, so you can get professional advice.

Better late than never

Just because you're saving doesn't necessarily mean you're on track to retire on time. Make sure you've got a clear goal to aim at, along with contributions that keep pace with your income and a 401(k) match to boot.

And if you haven't taken advantage of these tips, don't wait any longer -- get started today. When it comes to retirement, like most things, late is better than never.