Consider a couple that has half a million dollars in savings — they must both be making six figures, right? Or, they’ve been saving for decades and are nearing retirement. Or they got a windfall.

None of the above are true for Lauren Perraut and her husband, Dylan. Lauren is only 32 years old, and while she earns $122,000 a year, her husband makes $60,000.

The couple has managed to amass about $524,000 in savings with a relatively simple plan — and some timeless advice from Lauren’s dad. “Never spend more than you’re making,” and “always pay off your credit card balance,” were two lessons he instilled in her from a young age, she told CNBC.

There is a lot to learn from the plan that the Perrauts have implemented if you’re striving to have flexibility in retirement.

The Perrauts follow several best practices when it comes to personal finance. They both take full advantage of their employer matches when it comes to their workplace retirement accounts; they also both max out their Roth IRAs.

If your employer offers matching for your 401(k) or other employer-sponsored savings plan, you should aim to contribute enough to get the full match; not doing so is essentially leaving money on the table.

While the Perrauts are “relatively frugal,” according to Lauren, and live within their means, their well-thought-out and intentional planning when it comes to savings may be their biggest advantage.

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Having a savings goal is an important first step. Working out how much you want to have saved by a certain date allows you to calculate how much you need to save each month to ultimately hit your goal.

This strategy makes planning for something that may feel far away or amorphous — such as retirement — much more concrete. But how much do Americans actually need to save for retirement?

According to a 2025 study by Northwestern Mutual (2), Americans think they will need $1.26 million saved for retirement by age 65.

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However, the study also found that of those Americans who have retirement savings, about one-four have saved only one year or less of their current yearly income.

Of course, there is no “magic number,” because your retirement plans must be based on your specific financial situation, which includes how much you make a year and how much you intend to spend each year of your retirement.

First, you should estimate how long your retirement will be; select the year that you think you will retire, and then calculate your life expectancy. (3) This will give you the minimum number of retirement years that you should aim to save for.

Next, decide what you think a realistic income for your retirement years will be. One formula that’s often used is the 25x retirement rule. Factor in where you think you’ll retire, what your living situation will be, and what your medical care costs might be.

The Social Security Administration (SSA) advises that most people will not be eligible for Medicare until they reach 65, although there are exceptions. When estimating your yearly income in retirement, you can also calculate your possible SSA benefits.

Once you have your projected number of retirement years and your target yearly annual income in retirement, you can multiply those figures to come up with an estimated retirement savings goal. Be sure to include room for unexpected expenses, such as medical expenses that may not be covered, or housing repairs. Based on your goal, calculate how much you would need to save every month from now until retirement to hit that goal.

Building retirement savings into your budget, like the Perrauts, is a good way to ensure that saving for your future, no matter how far off it may be, stays top of mind. Aim to max out IRAs for tax-advantaged savings and make it a priority to take full advantage of any employer matching programs at your work.

Lauren’s father would encourage her to save money she received for birthdays or holidays when she was a child. It’s a prudent lesson that can still apply in adulthood.

If you come into an unexpected financial gain, whether it’s a bonus at work or a larger tax return than expected, consider adding it to your nest egg instead of heading to the mall or booking an expensive holiday. The longer your money is invested before retirement, the more growth you can expect for your future.

We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

CNBC (1); Northwestern Mutual (2); Social Security Administration (SSA) (3).

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.