Percentage

• It can be difficult to come up with an exact figure when it comes to retirement savings. A general rule of thumb is a person needs to generate 70 percent pre-retirement income in order to keep his current lifestyle. If a person is in a lower income tax bracket, the number rises to 90 percent for households earning less than $20,000 a year.
  
  

401(k)

• There are several ways to put aside a percentage of wages toward retirement. One way is to enroll in an employer-sponsored retirement savings plan, usually in the form of a 401(k). An employee pays into the account and pays reduced tax rates for the period of time the 401(k) is in effect. In addition, the company puts money into the account as well, and due to automatic deduction, the money comes out before it's even seen.
  
  

Age

• The age of the person saving for retirement needs to be considered. After all, putting aside 10 percent every year might work out for someone just starting out. But that 10 percent definitely won't work for someone who is much closer to retirement. The older a person is, the higher the percentage that should be saved for a comfortable retirement.
  
  

Determining Need

• To find the percentage needed to save, simply look at how much cash is needed in order to maintain your current lifestyle. Then make an estimate as to how long you will probably live after retiring. (The average is 20 years.) Follow that with how many years until you reach retirement and that provides the savings needed each year to arrive at the retirement cash flow level needed.
  
  

Social Security

• When examining what percentage to save for retirement, Social Security needs to be considered. The higher the monthly benefits from Social Security, the lower the percentage of savings for retirement. Naturally, putting as much money into a retirement account as possible is always the wisest course of action; but since Social Security will offset some of the costs needed for retirement, not as much money will be needed in the retirement account.