Learn some of the basics about retirement and pension benefits.

Saving for Retirement

As you approach retirement, there are many things to think about. Experts advise that you will need about 80 percent of your pre-retirement income to continue your current quality of life. The exact amount depends on your individual needs. Some important factors to consider include:

  • At what age do you plan to retire?
  • Can you participate in an employer's retirement savings plan, such as a 401(k) plan, or a traditional pension plan? 
  • Will your spouse or partner retire when you do?
  • Where do you plan to live when you retire? Will you downsize, rent, or own your home?
  • Do you expect to work part-time?
  • Will you have the same medical insurance you had while working? Will your coverage change?
  • Do you want to travel or pursue a new hobby that might be costly?

Tools to Help You Prepare for Retirement

To help you plan for retirement:

  • Find practical tips for building retirement savings in the Top 10 Ways to Prepare for Retirement.  
  • Use a retirement calculator to find out the best age to claim your Social Security benefits.
  • myRA can help you start saving for retirement when you don't have access to an employer-sponsored plan or lack other options to save. Note: The U.S. Department of the Treasury has decided to phase out the myRA retirement savings program, and will no longer be accepting new enrollments.  
  • Find out the trade-offs between taking your pension in a monthly payment or in a lump sum.
  • Social Security pays benefits that are on average equal to about 40 percent of your pre-retirement earnings. You may be able to estimate your benefits.
  • Learn how you can boost your retirement savings at
  • If you have a financial advisor, talk to him or her about your plans.

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Infographic: Common Options to Save for Retirement

This infographic shows the most common ways people save for retirement.

Infographic showing the ways people save for retirement in the U.S.

Infographic showing the ways people save for retirement in the U.S. View a larger version of the infographic.

In the United States, people live an average of 20 years after retirement. The three most common options to save for retirement are:

  1. Retirement Plans offered by an employer
  2. Savings and Investments
  3. Social Security

For more information, visit

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Video: Determining a Target Retirement Saving Rate

Make a plan with the Retirement Saving worksheet. Learn more at Savings Fitness.

Determining a Target Retirement Saving Rate

A secure retirement is one of your goals, right? The worksheet in this video can help you get there.

When setting up your budget, it is important to include retirement savings. You can save through a retirement plan at work, on your own, or both. The target retirement savings rate tool will help you determine how much you need to save each year. The sooner you start saving, the longer your savings have to grow.

The worksheet will help you estimate what percentage of your current annual salary you should be saving. While it does not take into account your unique circumstances, it will help you plan for your retirement goals.

The worksheet asks for four pieces of information:

  1. Number of years until retirement (your planned retirement age minus your current age)
  2. Current annual salary
  3. Number of years you expect to spend in retirement
  4. Current savings

The worksheet assumes that you’ll need to replace about 80 percent of your pre-retirement income. Social Security retirement benefits should replace about 40 percent of an average wage earner’s income after retiring. This leaves approximately 40 percent to be replaced by retirement savings. Keep in mind, this is an estimate and you may need more or less depending on your individual circumstances.

How many years do you have left until retirement?

The more years you have until retirement, the less you will have to save each month to reach your goal. No matter your age, for every 10 years you delay starting to save for retirement, you need to save 3 times as much each month to catch up.

How long will you live in retirement?

Based on current estimates, a 65 year old man can expect to live approximately 18 years in retirement, and a 65 year old woman can expect to live about 20 years, but many people live longer. Planning to live well into your 90s can help you avoid outliving your income.

The worksheet takes into account some factors that impact your retirement savings. First, investing - because it involves risk. Second, inflation - because today’s dollars will usually buy less each year as the cost of living rises. Your target savings rate includes any contributions your employer makes to a retirement savings plan for you, such as an employer matching contribution. If, for example, you are in a 401(k) plan in which you contribute 4 percent of your salary and your employer also contributes 4 percent, your saving rate would be 8 percent of your salary.

By using the worksheet, you’ve figured out your target savings rate. It gives you a rough idea –a savings goal. Some may face higher expenses in retirement because of personal circumstances. For example, if you or your spouse have a chronic medical condition, you may want to save more. Some may have other sources of income in retirement such as a traditional pension or money from selling a home that would lower their target savings rate.

If you are not currently saving this amount, don’t be discouraged. The important thing is to start saving – even a small amount – and increase that amount when you can. Come back and update this worksheet from time to time to reflect changes and track your progress.

Here are a few tips on how to save smart for retirement:

  • Start now. Time is critical. Start small, if necessary.
  • Use automatic deductions from your payroll or your checking account.
  • Make saving for retirement a habit.
  • Be realistic about investment returns.
  • If you change jobs, keep your savings in the plan or roll them over to another retirement account.
  • Don’t dip into retirement savings early.
  • If you pay someone for investment advice, ask them to confirm in writing that they are “fiduciaries”—meaning they are obliged to work in your best interest.

To track other resources you may have in retirement, start by getting your Social Security statement and an estimate of your retirement benefits on the Social Security Administration’s website,

The online interactive target retirement savings rate worksheet and other financial planning worksheets are available on EBSA’s website: You can save your worksheet data there so that you can come back to update it to track progress or adjust for changes.

You can order a free copy of the Savings Fitness publication or contact a Benefits Advisor with questions electronically at or by calling toll-free 1-866-444-3272.

Get started today for a secure financial future!

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Social Security and How It Works

What’s Social Security?

Social Security is a federal government program that provides a source of income for you or your legal dependents (spouse, children, or parents) if you qualify for benefits. You also need a Social Security number to get a job.

Find how to apply to get a Social Security number or to replace your Social Security card.

How Do Benefits Work and How Can I Qualify?

While you work, you pay Social Security taxes. This tax money goes into a trust fund that pays benefits to those who are currently retired, to people with disabilities, and to the surviving spouses and children of workers who have died. Each year you work, you’ll get credits to help you become eligible for benefits when it’s time for you to retire. Find all the benefits Social Security Administration (SSA) offers.

There are four main types of benefits that the SSA offers:

How to Open a “my Social Security” Account

If you receive or will receive Social Security benefits, you may want to open a "my Social Security" account. This online account is a service from the SSA that allows you to keep track of and manage your SSA benefits, and allows you to make changes to your Social Security record.

How to Find More Help

If you have specific questions about your Social Security benefits, you can review the Social Security Administration’s frequently asked questions or contact them directly.

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Protecting Your Private Pension Benefits

Avoiding Errors and Getting Help

If your job is covered by a traditional pension plan, make sure you get the pension amount you're owed. 

Federal Insurance for Private Pensions

If you've earned a traditional pension, you're likely to receive it even if your company runs into financial problems. 

The Pension Benefit Guaranty Corporation (PBGC):

Is Your Pension Insured?

Find an Unclaimed Pension

More than 38 million people in the U.S. haven’t claimed pension benefits they have earned. Find out if you, or someone you know, is owed a pension.


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Civil Service Retirement

Federal Employee Retirement Planning and Management

If you are a federal employee planning to retire or a federal retiree looking for information about your benefits, the U.S. Office of Personnel Management (OPM)'s Retirement page can help you:

If you are the survivor of a deceased federal employee or federal retiree, you may be eligible for death and survivor benefits. Visit the OPM website to report the death and apply for death benefits

Thrift Savings Plan

In addition to the defined or basic benefits provided by your CSRS or FERS plan, if you are a current federal employee, you can boost your retirement savings by participating in the Thrift Savings Plan (TSP). The TSP offers the same types of savings and tax benefits as a 401(k) plan.

Credit for Military Service

Military service does not automatically count toward civil service retirement.


Pension Taxes

The Internal Revenue Service (IRS) offers an online tool and an online publication to help you determine whether or not your pension or annuity payment is taxable.

Contact OPM's Retirement Operations Center

For benefits information or help with a transaction, contact OPM's Retirement Operations Center.

State and Local Government Employees

If you are a state or local government employee and have questions about your pension plan, contact your agency's personnel department. You can also contact the Employee Benefits Security Administration (ESBA) for help.

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Last Updated: December 01, 2017