Updated November 2026
Quick answer: a common guideline is to save 20% of your take-home pay each month, using the 50/30/20 budget rule. For retirement alone, many experts suggest saving 15% of your gross income, including any employer match. On $5,000 a month after tax, 20% is $1,000 a month.
How much to save by take-home pay
20% of monthly take-home pay, and what it could grow to at a 6% average return:
| Monthly take-home pay | Save 20% | After 10 years | After 20 years |
|---|---|---|---|
| $3,000 | $600 | $98,328 | $277,225 |
| $4,000 | $800 | $131,103 | $369,633 |
| $5,000 | $1,000 | $163,879 | $462,041 |
| $6,000 | $1,200 | $196,655 | $554,449 |
| $8,000 | $1,600 | $262,207 | $739,265 |
What to save for, in order
- A starter emergency fund: about $1,000 to $2,000 for small surprises.
- Your full employer 401(k) match: it's free money.
- High-interest debt: paying off credit cards at 20%+ is like earning that return.
- A full emergency fund: 3 to 6 months of essential expenses. See how much your emergency fund should be.
- Retirement: work up to 15% of your gross income.
- Other goals: a home down payment, a car, travel or education.
Can't save 20% yet?
That's common. Start with what you can, even 5%, and increase it by 1% every few months or whenever you get a raise. Set up an automatic transfer on payday so saving happens before you can spend the money.
Saving by age
For retirement, a widely used benchmark is to have 1x your salary saved by 30, 3x by 40 and 6x by 50. See how much you should have saved by age.
Want to split your whole budget? Read about the 50/30/20 rule, or see what your savings could become with the compound interest calculator.
Frequently asked questions
How much should I save each month?
A common target is 20% of your take-home pay. If that's not possible yet, start smaller and increase it over time.
How much of my salary should I save for retirement?
Many experts suggest about 15% of your gross income, including any employer match, starting in your 20s. Start later and you may need more.
Is saving $500 a month good?
Yes. At a 6% return, $500 a month grows to about $81,940 in 10 years and $231,020 in 20 years.
Where should I keep my savings?
Emergency money belongs in a safe, easy-to-reach account like a high-yield savings account. Long-term savings for retirement are usually invested, for example in a 401(k) or IRA.