How to Know If You're Actually on Track for Retirement
TL;DR: You're "on track" when your projected corpus at your target retirement age is greater than or equal to the corpus required to sustain your target retirement income. Most people never actually calculate either number — they operate on a feeling instead, which is why this single calculation tends to be more useful than any generic savings-rate rule of thumb.
The two numbers you actually need
- Required corpus — how large a pool of savings/investments do you need at retirement so that its return (or a safe withdrawal rate) covers your target retirement income indefinitely, or for your expected retirement length.
- Projected corpus — given your current savings rate, contributions, and assumed return, what will you actually have by that age?
The gap between these two numbers — not a generic "save 15% of income" rule — is what tells you whether you're actually on track.
A common mistake: using only one return assumption
Running this calculation once, with one optimistic return assumption, and calling it done is a common trap. Run it again with a more conservative assumption — even a few percentage points lower changes the required monthly contribution substantially, as shown in our retirement-target breakdown. If you're "on track" only under the optimistic case, you're not actually on track — you're hoping.
What "target retirement income" should account for
- Expected living costs in retirement (often lower than pre-retirement, but not always — healthcare costs frequently rise)
- Inflation between now and retirement, and during retirement itself
- Any other income sources — a pension, rental income, part-time work — that reduce how much your investment corpus alone needs to cover
Frequently asked
What if I'm behind — what actually closes the gap?
In order of typical impact: increasing your monthly contribution, increasing your time horizon (working or investing longer), and reassessing your target retirement income downward, roughly in that order of how much control you usually have over each one.
Does employer-matched retirement contribution count toward my corpus?
Yes — any employer match, pension contribution, or similar should be included in your projected corpus calculation, since it's real money compounding on your behalf.
Calculate your own gap
Our Build My Financial Plan report calculates both numbers together — required corpus, projected corpus, and the specific gap — alongside a full income growth path, not just a single static estimate.