According to a new Vanguard consumer survey, many Americans are unsure about how much they should save or where to start.
While the survey focuses on summer savings habits, such as building up emergency funds and reducing idle cash, it also highlights a deeper issue: Widespread uncertainty surrounding financial planning.
Learn More: Savings Needed To Be Rich in America’s Most Popular Retirement Destinations
Read Next: Clever Ways To Save Money That Actually Work in 2025
This includes older Americans, such as baby boomers, many of whom are navigating short-term needs as they approach retirement age. Here’s how boomers can take the guesswork out of retirement planning to know they have enough saved.
Nearly a third (28%) of all respondents listed “not knowing where to start” as a chief reason for not saving more. However, guessing based on past income or general rules of thumb won’t cut it, especially with inflation, rising healthcare costs and longer lifespans.
Individuals can use retirement calculators from trusted financial institutions such as Vanguard or Fidelity to estimate how much they’ll need to save. These tools typically factor in a person’s age, expected expenses, desired retirement age and current savings to assess whether they are on track for a successful retirement.
For those seeking a more tailored approach, working with a fee-only financial advisor can provide deeper insight. Advisors often use Monte Carlo simulations, a method that models thousands of potential financial scenarios, to help clients understand their likelihood of meeting retirement goals.
Even using a general benchmark, such as aiming to replace 80% of pre-retirement income, can offer more clarity than relying on guesswork.
Check Out: What $1 Million in Retirement Savings Looks Like in Monthly Spending
Not having a savings plan is comparable to driving without a map — forward motion may still occur, but the destination is uncertain.
A strong financial plan extends beyond retirement, encompassing near-term objectives, emergency reserves and timelines for various investments.
To reduce uncertainty, many financial experts recommend starting with the 50/30/20 framework, which involves allocating 50% of your income to essential needs, 30% to discretionary spending and 20% to savings and debt repayment.
That final 20% can then be divided further to cover an emergency fund, retirement contributions and short-term financial goals such as travel or medical expenses. Budgeting tools like YNAB (You Need a Budget) or PocketGuard can help automate this process and provide real-time visibility into spending habits.
For retirees or those in semi-retirement, income sources may include Social Security benefits, portfolio withdrawals or annuities. A structured withdrawal strategy, such as the 4% rule, can help ensure savings last throughout retirement by setting a sustainable pace for drawing down assets.
Many boomers have substantial savings in 401(k) plans or IRAs but lack readily accessible cash for emergencies or large purchases. Without liquidity, unexpected expenses can force you to sell investments or take on high-interest debt.
Open a high-yield savings account (HYSA) with a competitive annual percentage yield (APY). Many currently offer 4% or higher interest rates. Keep at least three to six months of living expenses there.
For added yield, consider a certificate of deposit (CD) ladder, which involves splitting money across multiple CDs with staggered maturity dates, ensuring some funds are always available. Vanguard and other brokerages also offer money market funds that combine safety with better interest than a checking account.
Some boomers continue to earn high incomes, but steady earnings do not necessarily translate into long-term wealth.
Lifestyle inflation, where spending increases as income rises, can quietly erode savings potential. In many cases, the lack of progress stems from failing to automate savings or establish consistent financial habits.
To remove the guesswork, financial planners often recommend setting up automatic transfers from checking accounts into designated savings and investment accounts, timed to occur shortly after each payday.
Using a percentage-based approach, such as allocating 10% to 15% of one’s monthly income, can help individuals naturally scale their savings as their earnings grow. Reviewing one’s savings rate twice a year and tracking net worth through platforms like Empower can provide valuable insight into overall financial progress.
Many boomers still rely on paper statements or broad advice, overlooking tech tools that can simplify financial planning.
However, today’s platforms are designed to be user-friendly, even for those less comfortable with technology. Free tools from firms like Vanguard, Fidelity and Schwab enable users to set goals, model their income, and track their investments.
Others, like Boldin and SmartAsset, help visualize scenarios such as downsizing or delaying Social Security. Even linking all accounts in a single dashboard can reveal gaps or inefficiencies, bringing greater clarity to a retirement plan.
More From GOBankingRates
This article originally appeared on GOBankingRates.com: How Boomers Can Take the Guesswork Out of Retirement Planning To Know They Have Enough Saved
