Deciding how much to save for retirement can be complicated. One common technique to simplify things is to invest a percentage of your income. Traditionally, financial experts often recommended setting aside 10% of earnings for your later years, but thanks to lengthening life spans and lower projected returns, it's usually better to aim for about 15% to 20% of income.

Of course, this recommendation is for people who save throughout their careers. But not everyone does that. In fact, many people get a late start on their retirement savings and don't begin putting aside funds until they're in their 40s.

If you delay until middle age to start saving, you obviously have far less time for your money to grow. To compensate, you need to invest more in your retirement accounts. But how much more is required to end up a financially secure senior?

Older woman with clasped hands looking worried.

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You need to save a shocking amount if you don't start until your 40s

What you need to save if you wait until 45 is going to be shaped by factors including your goals for retirement and whether you'll have other sources of retirement income, such as a pension fund. In general, however, a survey from Schwab shows that you'd need to save a whopping 35% of your salary if you don't start putting retirement funds aside until 45. 

To understand why you have to save so much, consider how you'd fare as a retiree. If you're earning the median salary for workers ages 45 to 54, you'd have $54,028 in household income, according to the Bureau of Labor Statistics. If you get a 2% annual raise, your final salary would be about $81,888 if you retired at 67.

Most experts recommend replacing around 80% of retirement income to maintain your standard of living in retirement. Assuming your Social Security benefits provide you with about 40% of that amount, you'd need an additional $32,755 in income from savings. 

You'd end up with about $993,000 saved assuming you'd kept up your 35% savings rate throughout the rest of your career and earned a 7% rate of return. Assuming you withdraw somewhere around 3.5% of your retirement nest egg, you should have the funds you need plus a little bit extra. 

Unfortunately, if your contribution rate fell below 35% of income, you'd end up with far too little. For example, those who start saving when they're young can often get away with putting aside just 15% of annual income. If you started doing that at 45, you'd end up with just over $425,000. This would provide only $14,875 in annual income, so you'd be far short of what you need. 

How can you increase your savings rate?

If you waited to start investing for retirement until you're 45, you may have little choice but to get really aggressive about saving.

Start by looking for big expenses to cut from your budget. This could mean switching to a less expensive car or a cheaper apartment or house. Increasing your income could also be necessary if you can't cut enough from your budget. If you can't negotiate raises at work, picking up a side job could be your best bet. 

As you free up cash from cutting expenses or you earn more, contribute the money directly to a tax-advantaged retirement account such as a 401(k) or an IRA. Automate your account contributions to ensure you're saving enough, and increase those contributions every time you get a raise or find new ways to cut your costs until you've hit the essential 35% savings rate. 

Don't jeopardize your retirement by waiting too long to save

Saving 35% of your salary is really difficult. If you're still young, start saving now so you don't find yourself forced to sacrifice so much later on. While it may seem hard to find spare cash, it's a lot easier than if you delay. 

If you're already in your 40s, try to work up to saving a significant percentage of your income as soon as possible so you're prepared for your later years. You still have some time and can turn things around if you get serious about saving.