Compound growth, simply
Each month your balance earns a return, and next month's return is earned on the bigger balance. Over long periods growth can exceed what you put in — which is why starting early matters more than starting big.
The 20% of $55,300: saving 20% of take-home (≈ $777/month) at 6% for 10 years grows to roughly $127,000, of which about $34,000 is growth.
Tax-advantaged accounts (2026 limits)
- 401(k)/403(b): $24,500 employee deferral (+$8,000 catch-up at 50+).
- IRA (traditional or Roth): $7,500 (+$1,100 catch-up at 50+).
- HSA: $4,400 self-only, $8,750 family.
Frequently asked questions
What return should I assume?
Use a conservative figure. High-yield savings pays a few percent; diversified stock portfolios have historically averaged more over long periods but fluctuate and are not guaranteed.
How much should I save from a $55,300 salary?
20% of take-home (about $775 a month) is a solid target; capture any employer 401(k) match first.
Last reviewed October 21, 2026 by the 55300 editorial team. Read our methodology & sources.