Consider a couple who has half a million dollars in savings: They must both be making six figures, right? Or they’ve been saving for decades and are about to retire. Or they made a windfall.
None of the above is true for Lauren Perraut and her husband, Dylan. Lauren is only 32 years old, and while she makes $122,000 a year, her husband makes $60,000.
The couple has managed to accumulate around $524,000 in savings with a relatively simple plan and some timeless advice from Lauren’s father. “Never spend more than you earn” and “always pay off your credit card balance” were two lessons he instilled in her from a young age, she told CNBC.
There is much to learn from the plan the Perrauts have implemented if one strives for flexibility in retirement.
The Perrauts follow several best practices when it comes to personal finances. They both make the most of their employer matches when it comes to their workplace retirement accounts; They also both max out their Roth IRAs.
If your employer offers a match to your 401(k) or other employer-sponsored savings plan, you should try 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 thoughtful and intentional planning when it comes to savings may be their biggest asset.
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Having a savings goal is an important first step. Calculating how much you want to save by a certain date allows you to calculate how much you need to save each month to reach your goal.
This strategy makes planning for something that may seem distant or amorphous, like retirement, much more concrete. But how much do Americans really need to save for retirement?
According to a 2025 study by Northwestern Mutual (2), Americans believe they will need $1.26 million saved for retirement by age 65.
However, the study also found that of Americans who have retirement savings, about one in four have saved only one year or less of their current annual income.
Of course, there is no “magic number,” because your retirement plans should be based on your specific financial situation, including how much you earn each year and how much you plan to spend each year of retirement.
First, you need to estimate how long your retirement will last; Select the year you think you will retire and then calculate your life expectancy. (3) This will give you the minimum number of retirement years you should try to save for.
Next, decide what you think will be a realistic income for your retirement years. A frequently used formula is the 25x retirement rule. Consider where you think you will retire, what your living situation will be, and what your healthcare costs might be.
The Social Security Administration (SSA) warns that most people will not be eligible for Medicare until they turn 65, although there are exceptions. By estimating your annual income in retirement, you can also estimate your potential SSA benefits.
Once you have your projected number of years in retirement and your target annual income in retirement, you can multiply those numbers to get an estimated retirement savings goal. Be sure to include room for unexpected expenses, such as medical expenses that may not be covered or home repairs. Based on your goal, calculate how much you would need to save each month from now until retirement to reach that goal.
Including retirement savings in your budget, like the Perrauts, is a good way to ensure that saving for your future, no matter how far away, is a priority. Try to maximize IRAs for tax-advantaged savings and make it a priority to take full advantage of employer matching programs at your job.
Lauren’s father encouraged her to save the money she received for her birthdays or holidays when she was a child. It’s a prudent lesson that can still be applied into adulthood.
If you have a financial windfall, whether it’s a bonus at work or a larger-than-expected tax return, consider adding it to your savings instead of going to the mall or booking an expensive vacation. The longer you invest your money before you retire, the more growth you can expect in your future.
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CNBC (1); Northwest 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.
