Can You Save Enough for Retirement in 15 Years?

By Justin Pritchard, CFP®

If you got a late start—or you’re just starting over—you can build up retirement savings relatively quickly. The exact amount you can save in the next 15 or 20 years depends on several factors, but it’s still possible to retire comfortably. We’ll cover those points below and give you some tools to plan your retirement.

To save enough for retirement in 15 years, you need to be a determined saver, and some good fortune doesn’t hurt. For example, the higher your earnings, the easier it is to save a substantial amount. Good health is also helpful, as it allows you to keep working long enough to continue your saving. Plus, being healthy keeps healthcare costs low in retirement.

Continue reading below, or listen and watch the video explanation.

Some Quick Math

Don’t worry, we’re going to use calculators to do the math for you. But we need to start with some numbers that go into the calculations. 

Income Sources

You’ll likely have income from several sources, so it’s important to know what’s available as you save for retirement. Your “base” income sources like Social Security and pension can reduce the amount you need to save.

  1. Social Security: Your income will depend on your income and when you claim benefits. Plus, you might qualify for benefits from a spouse, ex-spouse, or deceased spouse’s work record. More on all that below.
  2. Pension income: If your job provides a pension benefit, you’ll likely get a monthly payment that lasts for the rest of your life. This can reduce the amount you need to save.
  3. Withdrawals from savings: If your Social Security and pension don’t provide what you need, you’ll withdraw money from your retirement savings. The question becomes how much you need to save and how much time you have.
  4. Part-time or other income: If you still come up short, it may be helpful to get other forms of income—at least temporarily. Working part-time for just a few years can make a big impact on your retirement success.

Now, let’s see how much money you might need, based on how much you want to spend (or pay yourself). With that information, we can figure out if 15 years is enough time to save for retirement.


The next question is: What does it take to save that much money in 15 years? Again, a quick calculator can help us. Before you enter your numbers, consider a few things:

  • Your employer might contribute to your retirement accounts, which can ease the burden on you.
  • You may want to increase the amount you save each year, especially if you get periodic raises or advance in your career (your last 10 to 15 years of working are often your highest-earning years).
  • Tax rules may allow you to increase the amount you contribute over time. That happens after you reach age 50, for example, or when the maximum limits increase for inflation adjustments.
  • The more you earn and the longer you wait, you might get higher payouts from Social Security or your pension. Those conditions would mean you can save less or retire earlier with similar results.

Calculation: To figure out how much you need to save each year, this Google Sheet has the calculations set up (you must make your own copy of the sheet, which prevents anybody from working on top of you).

When You Take Benefits

Your decision on when to retire is critical. In some cases, the longer you wait, the more guaranteed income you receive. Assuming you have the option of waiting, that’s often beneficial—and you can stop working several years before you claim your benefits.

There are two good reasons for waiting to take retirement benefits:

  1. The older you are, the higher your monthly payment, in most cases.
  2. The longer you work, the more of your earnings contribute to your final income calculation.

Social Security

Social Security allows most people to begin retirement benefits as early as age 62. But your income will be reduced if you claim that early. You get the maximum amount if you wait until age 70, and a bigger Social Security payment means you don’t need to save as much money.

The average Social Security retirement payment is $1,514 per month, but yours might be higher or lower, depending on your earnings history.

Pensions

Pensions are often similar to Social Security. The older you are, the fewer years your employer expects to pay you (based on life expectancy), so you get a bigger payment. Plus, you might have more years of service credit if you work longer, which is often helpful.

Check Widow, Spouse, and Ex-Spouse Benefits

If you’re starting over due to life changes, don’t ignore benefits that you might qualify for based on your marriage—even if it was long ago. Widows can often receive survivor benefits from a deceased spouse’s work record. Ex-spouses may also qualify for benefits (assuming certain conditions are met).

If you’re currently married, you may qualify for other spousal benefits, so check with Social Security and your spouse’s employer for details.

How Much Should You Save?

With a relatively short timeline, generic advice like saving 15% of your salary is probably insufficient. You need customized details. Ideally, run some numbers to understand roughly how much to put toward your retirement each year. There’s no round number that’s right for everybody, so you need to find your own retirement savings number.

The result might be a staggeringly high amount. If that’s the case, just do your best for now, and look for any opportunities to improve things in the coming years.

Consider retirement accounts that can help improve your chances of success. Setting money aside pre-tax could make it easier to save, but remember that you’ll probably need to pay taxes on that money when you take withdrawals. An exception would be HSAs, which provide unique tax benefits, but they are somewhat limited.

Can Your Investments Carry the Day?

With just 15 years until retirement, your investment returns are important, but they might not be able to overcome a significant shortfall. Earning an extra percent or two is extremely helpful for a 25-year-old with a 40-year time horizon. But when you’re working with 15 or 20 years, the amount you save each year may be more important.

Also, remember that you might not have a long time to recover from significant losses. If your investments are sharply down when you start taking withdrawals, you eat into your nest egg at an unfortunate rate.

You need to invest wisely over the coming years, but making big bets could go either way. And unfortunately, you won’t know until the very end if those bets pay off, so a measured approach to risk might be wise.

If you found this information helpful, you’ll enjoy this series of educational emails and downloads on retirement planning. It’s available at no cost, and you can opt out at any time.