Embarrassed by your retirement savings? Get over it and start focusing on what you can do about it. Image source: Flickr user Sarebear.

We all have things we'd rather not share with the world -- private things that, whether they should or not, make us feel a bit embarrassed. For example, you might not want to share your personal emails or your Internet browsing history with everyone you know.

However, a recent survey by Merrill Edge found that Americans are much more embarrassed by something else: their finances. This is particularly true of millennials: 50% of respondents in that age group said they would be ashamed if others knew how they saved and spent their money.

The factors included one's credit score, monthly discretionary spending, and even total wedding costs. But the one thing people were the most embarrassed about in their financial life was their retirement savings.

Should you be embarrassed?
In short, you shouldn't be ashamed of your financial situation -- at least not to the point of paralysis.

Part of our problem as Americans is that we simply don't discuss finances; for some reason, the subject is taboo. That needs to change. Fight any embarrassment you may feel, make an honest assessment of your circumstances and your goals, and figure out how to get on track.

Where do you stand?
There is no one-size-fits-all standard for retirement savings, and for every guideline there are dozens of exceptions. That said, Fidelity has produced one helpful and extremely basic rule of thumb that may help you set a target.

Based on a number of assumptions (more on that below), here's how much you should aim to have saved for retirement at different ages if you want to retire comfortably.


Amount Saved




1/2 annual salary


1 x annual salary


2 x annual salary


3 x annual salary


4 x annual salary


5 x annual salary


6 x annual salary


8 x annual salary

Source: Fidelity Investments.

If that's difficult to visualize, here's what your retirement savings should look like at different ages, depending on your salary right now.

Before you kick yourself for not having enough savings -- or celebrate for being ahead of the curve -- it's important to take a close look at the assumptions Fidelity used to come up with these numbers. Here's the list of assumptions (in bold), followed by my commentary.

  • You'll want to replace 85% of your income in retirement. This can be much smaller if you learn to live below your means and avoid the "hedonic treadmill," which leads people to spend more as they earn more. Many retirees¬†survive on less than 70% of their pre-retirement income.
  • You start saving 6% of your salary at age 25 and then move the percentage up by 1% per year. This is great if you can follow through on such a plan.
  • Your employer contributes 3% of your salary to your retirement savings each year. This usually comes in the form of a 401(k) match. Many companies offer more, while others may not have a 401(k) plan at all. If your employer offers a matching contribution, be sure to contribute at least enough to get the full match.
  • Your contributions are uninterrupted, and you do not take any loans or withdrawals from your savings before retirement. If at all possible, you should never raid your retirement savings.
  • You retire at age 67. I have a problem with this one, as the average American retires¬†at 62. Those last five years can make a big difference.
  • Your portfolio grows at an annualized rate of 5.5%. That's a pretty conservative assumption, given that the market averages 9.1% per year. That said, I think this assumption builds in a nice margin of safety.
  • Your salary increases 1.5% each year. This is also somewhat conservative -- which is a good thing in financial planning.
  • You receive your full Social Security benefit. This is also based on a retirement age of 67. That, along with the possibility that benefits could be reduced, makes this assumption suspect.
  • You will live to age 92. This seems like a safe assumption; it's best to plan for a long retirement, lest you find yourself coming up short in your twilight years.

Obviously, there are many details to consider. While you can play with the numbers all you want, I think Fidelity offers reasonable ballpark figures for gauging your own retirement savings.

What if you're behind?
There are some simple strategies to boost your retirement savings, but the process starts with some boring yet crucial steps: get the maximum employer match in your 401(k), pay off all of your high-interest debt, build up an emergency fund, and spend less than you earn.

Once you have addressed all four of these points, you can start boosting your savings. See if you qualify for a health savings account, which can be a stealth method of saving for retirement. Open and start funding a Roth IRA. And make sure you choose investment vehicles with low fees.

If you're already nearing retirement and you need to boost your post-work income, check out how to add tens of thousands to your Social Security benefits, too.