Save at least 15% of your pretax pay for retirement, counting any employer match. That is Fidelity’s guideline, and it is the most common answer to the question.
- If your household earns $200,000 or more: plan on 20% to 25% instead.
- Why: Social Security replaces a much smaller share of a large salary, so your own savings have to cover more of retirement.
The percentage matters less than the order you fill accounts in. A high earner can reach 20% almost entirely through payroll deductions, before a dollar lands in checking.
Where does the 15% to 20% rule come from?
Two rules of thumb produce most of the numbers you see quoted.
| Rule | Target | Base | What counts |
|---|---|---|---|
| Fidelity guideline | 15%+ a year | Pretax income | Yours + match |
| 50/30/20 budget | 20% to savings + debt | After-tax income | Savings + extra debt payments |
Fidelity’s figure is built on stated assumptions:
- Savings: you start saving at 25, retire at 67, and need about 45% of your preretirement income (before taxes) to come from savings.
- Social Security: covers the rest of a 55% to 80% total.
The 50/30/20 split comes from All Your Worth, the 2005 book by Elizabeth Warren and Amelia Warren Tyagi. It is a budget, not a retirement target, and its 20% includes paying down debt.
The two rules use different bases. Fifteen percent of gross pay and 20% of take-home pay can be close to the same dollar amount for a high earner, which is part of why both survive.
Why do high earners need to save more than 15%?
Because Social Security replaces less of a high salary. The benefit formula applies 90%, 32%, and 15% to successive slices of your average indexed earnings, and earnings above the taxable maximum ($184,500 in 2026) earn no benefit at all.
The Social Security Office of the Chief Actuary publishes replacement rates for hypothetical workers. For workers born in 1960 who claim at 67 in 2027:
| Worker | Career-average pay | Benefit (% of pay) |
|---|---|---|
| Medium earner | $69,473 | 40.8% |
| High earner | $111,156 | 33.6% |
| Steady maximum earner | $171,373 | 26.8% |
Every dollar of replacement Social Security does not provide has to come from your savings. Three more things push the number up:
- Spending: a household that spends $180,000 a year needs a far larger portfolio to keep doing so than one spending $80,000, and Social Security does not grow in proportion.
- Timing: Fidelity’s 15% assumes you start at 25; graduate school, a startup salary, or years of loan payments mean catching up later at a higher rate.
- Early retirement: if you want the option to stop working at 55, your savings carry you for at least seven years before Social Security can start at 62, and ten before Medicare at 65.
In what order should you save?
Fill accounts in the order that gives each dollar the most tax benefit, and stop when you reach your target. The 2026 limits come from IRS announcements IR-2025-111, Notice 2025-67, and Publication 969.
| Step | Account | 2026 limit | Why here |
|---|---|---|---|
| 1 | 401(k) to full match | Varies | Instant return |
| 2 | HSA, if eligible | $4,400 self, $8,750 family (+$1,000 at 55+) | Deductible in, tax-free out |
| 3 | Rest of 401(k) | $24,500 (+$8,000 at 50+, $11,250 at 60 to 63) | Tax-sheltered growth |
| 4 | Roth IRA | $7,500 each, $8,600 at 50+ | Tax-free growth, no RMDs |
| 5 | Mega backdoor Roth | $72,000 total, minus steps 1 + 3 | Only if plan allows |
| 6 | Taxable brokerage | No limit | Flexible catch-all |
A few rules decide which version of each step you use:
- Roth IRA income limits: direct Roth IRA contributions phase out at $153,000 to $168,000 of modified AGI for single filers and $242,000 to $252,000 for joint filers. Above that range, the backdoor Roth is the route in.
- Mega backdoor Roth: the mega backdoor Roth depends entirely on your plan document, so check it before counting that room.
See the 2026 401(k) limits and 2026 HSA limits for the catch-up and eligibility details.
How much should you save from each paycheck? A $250,000 example
| Account | Annual | Per paycheck |
|---|---|---|
| 401(k) deferral | $24,500 | $942.31 |
| Family HSA | $8,750 | $336.54 |
| Roth IRA, both spouses | $15,000 | $576.92 |
| Employee savings | $48,250 | $1,855.77 |
| Employer match (4%) | $10,000 | $384.62 |
| Total with match | $58,250 | $2,240.39 |
That is 19.3% of salary from the couple and 23.3% including the match. Fidelity’s 15% would be $37,500 a year, or $1,442.31 per paycheck, match included.
Two details make this work:
- Payroll deductions lower AGI. The 401(k) deferral and payroll HSA contributions come out of taxable wages, which brings the couple’s AGI to about $216,750 if they have no other income. That is below the $242,000 start of the joint Roth phaseout, so both spouses can contribute to a Roth IRA directly.
- The spousal IRA rule. Under the spousal IRA rule in Publication 590-A, a spouse with no pay can still fund an IRA on a joint return, based on the working spouse’s compensation.
If the plan allows a mega backdoor Roth, the remaining room is $72,000 minus $24,500 minus the $10,000 match, or $37,500. That is another $1,442.31 per paycheck, which most households at this income fund partly or from bonus money rather than in full.
To see what lands in checking after these deductions, run the numbers through Nino’s take-home pay calculators, which cover federal tax, FICA, and state income tax for every state.
Should RSUs and bonuses count toward your savings rate?
Yes, and for many high earners they are the easiest place to find the extra 5% to 10%. RSUs are taxed as wages when they vest, and bonuses are supplemental wages.
Under IRS Publication 15, employers can withhold a flat 22% federal rate on supplemental wages up to $1 million in a year, and must withhold 37% above that.
A simple rule: let salary fund your spending and your payroll savings ladder, and save most of what RSUs and bonuses pay after tax.
- Diversify: selling RSUs at vest and moving the cash into a diversified account also keeps more of your net worth from riding on one stock.
- Front-load: some 401(k) plans let you set a separate deferral rate for bonuses, which can front-load the $24,500 limit; check whether your employer still pays the match on each paycheck if you hit the limit early.
How do you know if you are saving enough?
Your savings rate is an input. The output is whether your projected savings cover the spending you want, from the age you want to stop working. Check three things once a year:
- Savings as a multiple of salary: Fidelity’s milestones are 1x your salary by 30, 3x by 40, 6x by 50, 8x by 60, and 10x by 67. A high earner whose lifestyle has grown with income may need more.
- The gap after Social Security: Take your expected retirement spending, subtract your projected Social Security benefit, and ask whether a safe withdrawal from your portfolio covers the difference.
- Your tax mix: Pretax, Roth, HSA, and taxable dollars are taxed differently on the way out. A mix gives you room to control your tax bracket in retirement.
The retirement calculator shows how different savings rates play out against your timeline.
What Nino does for your savings plan
Nino connects your bank, brokerage, and retirement accounts and updates their balances daily, so your actual savings rate is visible instead of estimated.
- Software plans start at $20 a month.
- Advisor plans add a human financial planner and CPAs who build the retirement plan, sequence the accounts, and plan around RSU vests and bonuses. Federal and state tax filing is included, and Advisor plans run $3,600, $4,800, or $12,000 a year (Essential, Plus, Premier).
See pricing, or book a free consultation to check your savings rate against your plan.