How Much Should You Be Saving for Retirement?

Now's the time to max out your contributions to your retirement accounts (if you haven't already). The easiest way to choose an appropriately aggressive retirement plan is to invest in a "life cycle" or "lifestyle" fund—one that automatically adjusts your holdings to less risky investments based on the number of years until you retire, says Suze Orman. For a rough idea of how much you'll need for retirement, personal finance expert Eric Tyson offers three scenarios:

1. You'll need 65 percent of your projected preretirement income if you save 15 percent of your annual income, are a high-income earner (generally more than $100,000), will own your home debt-free when you retire, and plan to live modestly in retirement.
   
   
2. You'll need 75 percent if you save 5 to 14 percent of your annual income and want to maintain your preretirement lifestyle.
   
   
3. You'll need 85 percent if you save less than 5 percent of your annual income, have to pay a mortgage or rent in retirement, and want to maintain your current lifestyle.