Retirees' Advice at 45: Save 15% to Retire With $3.3 Million

Retirees who kept their 401(k)s in cash or chased speculative bets are telling 45-year-olds to save 15 percent of every paycheck, warning that small habits compound into millions.

"I wish I didn't keep everything safe," said Annette Kruzynski, a 79-year-old retiree from West Hempstead, N.Y., who moved her 401(k) to cash through the dot-com bust, the Great Recession and the COVID pandemic. "I think if I had invested, I would have had much more money saved."

The math behind the 15 percent rule is straightforward. Setting aside 15 percent of a $65,000 salary equals $9,750 a year, or about $812 a month. Invested in low-cost index funds tracking the S&P 500 at a 9 percent annual return over 40 years, that grows to roughly $3.3 million on about $390,000 of personal contributions, according to projections cited by Kevin O'Leary. Delaying the start to age 35 cuts the nest egg to about $1.3 million — a $2 million difference.

The stakes are highest for the oldest Millennials, who turn 45 this year. With 20-plus years left in the workforce, they can still correct course, but the cost of waiting is steep. "In your 40s is where everything starts to become a priority, and those priorities for spending are competing with each other," said Pam Krueger, founder and CEO of Wealthramp, a free service that matches consumers with fee-only fiduciary financial advisers.

The 15 Percent Rule and the Cost of Waiting

The 15 percent rule applies to every paycheck, side hustle, gift and bonus, and the money should flow automatically into diversified, low-cost index funds rather than a savings account, O'Leary said. Low-cost index funds mirror a market index like the S&P 500 with little trading and low fees, spreading risk across hundreds of companies. Warren Buffett has endorsed the approach, saying "a very low-cost index is going to beat a majority of the amateur-managed money or professionally-managed money."

Even with more conservative returns of 8 percent to 10 percent a year, the portfolio still grows meaningfully. The S&P 500 delivered unusually strong double-digit annualized returns over the decade leading up to early 2026, with several big bull-market years.

Consolidate Accounts and Capture the Match

Beyond the savings rate, retirees warn against viewing retirement accounts in silos. Treating a spouse's 401(k) and IRA as separate, standalone investments can result in extra fees or overexposure to a single market segment. "You might not have diversification, you might pay three times in fees or your returns may be beaten down because you didn't coordinate," Krueger said. "It's important to clean up, organize and have a clear view of the accounts consolidated in one place."

Another common mistake is leaving money on the table by not contributing enough to capture the full 401(k) match, and keeping contribution rates steady instead of automatically increasing them by 1 percent each year or when receiving raises and bonuses.

Derrick Longo, a financial adviser at Savant Wealth Management in Huntersville, N.C., warned against chasing "the next hot, shiny thing" with retirement money. Speculative investments like crypto or meme stocks should only be made with money you can afford to lose, he said.

On the spending side, Michael Conrath, JPMorgan's chief retirement strategist, said 45-year-olds need a concrete baseline. "On the fundamental level, they need to ask themselves, how much do I spend monthly, what are my known expenses and what do they cost me?" Conrath said. "It's important to have that foundation."

Sharon Gibbs, 73, who retired from the state of California with her husband Roger after more than 30 years, said she wishes she had taken more risk. "Thinking back to age 45, we probably should have been more of a risk taker, but we're pretty conservative," she said.

The figures cited here are illustrative projections based on historical market performance and current contribution rules; readers should verify the latest 401(k) limits, match policies and market data against official announcements before acting.

This article is for informational purposes only and does not constitute investment advice.