Here's how much of your income to save every year so you'll have enough money in retirement

A March 2016 GoBankingRates survey of more than 4,500 Americans found that over half — 56% — have less than $10,000 of retirement savings, and that 28% of those over 55 have no savings at all. In total, the site determined, about 75% of respondents are behind on saving for retirement.

The news isn't great.

So how much are you supposed to be saving in order to finance 20 to 30 years post-work? The commonly accepted rule of thumb is that you'll want about 70% of your former annual income — at least — to continue living at or near the style to which you've been accustomed.

According to T. Rowe Price, that magic number is 15%. By saving 15% of your pretax annual income — including any potential employer match — starting at 30, you could end up with nearly $600,000 more at 65 than you would have by saving an already somewhat generous 10% of your income.

Here's how that looks:

T. Rowe Price

These calculations are based on a $50,000 starting salary at 30 with a 3% annual raise and 3% inflation. They assume a 7% rate of return — although investment returns can never be guaranteed — and a 4% annual withdrawal rate in retirement, a somewhat-contested rule of thumb.

The growth is largely because of compound interest, which is essentially the interest you earn on interest on itself — and compounding, get it? Because of how drastically compound interest affects retirement savings, money socked away earlier rather than later has a disproportionate effect on the ultimate earnings.

It's probably worth keeping in mind that the brokerage making these calculations does offer IRAs and therefore can benefit from your choosing a higher savings rate — but then again, so do you, no matter who holds your savings. It's a win-win.

One nice thing about T. Rowe Price's recommendation is that it assumes you won't start contributing this 15% until age 30. That gives most 20-somethings at least five working years, if not more, to ramp up contributions to the admittedly ambitious level. Self-made millionaire and author David Bach saves a whopping 20% annually, but he started in his 20s with just 1%, increased it to 3%, and worked his way up from there.

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