Retirement Savings in Your 30s: How Much Is Enough?
THE QUICK & DIRTY
Shoot for one to two times your annual salary by 35. It's doable with consistent contributions, employer matches, and smart investments. Maximize 401(k)s and IRAs, diversify investments, and don't forget an emergency fund.
KEY TAKEAWAYS
Aim to have one to two times your annual salary saved for retirement by age 35—but remember, consistency is key, so start small and stay consistent.
Don't leave free money on the table—take advantage of employer 401(k) matches and tax-advantaged retirement accounts like IRAs.
Retirement planning is about creating a future filled with options, not about deprivation. Find a balance between enjoying your life today and securing your tomorrow.
You’re crushing it in your career, managing your student loans (for the most part), and maybe even enjoying a decent bottle of wine with dinner (because you’re an adult). Life is good, but a nagging question lingers: “How much should I actually have saved for retirement by now?” If you’re in your 30s, it's time to tackle this head-on. Don't worry, it's not about deprivation – it's about making a few small, savvy changes now so you don’t have to stress later.
Compound interest is the name of the game
Start saving now–while you have time on your side. This powerful example shows what happens when you let compound interest work for you instead of against you.
Imagine you and your friend both want $1,000,000 for retirement. You start investing $10,000 a year at age 31, earning an average annual return of 7%. Your friend, however, prefers to wait and starts investing $10,000 a year at age 39, also earning a 7% return.
By age 65, you've invested a total of $340,000. Thanks to compound interest, your investment has blossomed to over $1,150,000.
Your friend, despite investing the same amount annually, ends up with only about $661,000 by age 65.
This stark difference showcases the incredible advantage of an early start. Those extra eight years of compounding allow your investments to significantly outpace your friends, even with the same annual contributions.
So it doesn’t matter if you only have a little to start with today–it’s way better to start with something small and let that money work hard for you by growing over time instead of waiting until you feel like you have enough money to actually start. Newsflash: you’ll never feel really ready until you actually start.
How much should I have saved for retirement by now?
There’s no one-size-fits-all answer, but a good rule of thumb is to aim for one to two times your annual salary saved by the time you hit 35. Sounds daunting? Break it down into smaller, achievable goals, like saving 15% of your income each year - which includes your 401(k) and any match your company offers. Remember, consistency is key.
Which account to use for your retirement savings
Retirement accounts like 401(k)s and IRAs aren’t just for your parents. They offer tax benefits and the chance to grow your money over time. If your employer offers a 401(k) match, it's like getting free money – don’t miss out!
Unlock Your Old 401(k)'s Potential – A Guide to Smart Rollovers
Retirement savings tips for your 30s
Once you’ve got the basics down, consider these power moves:
Max out those contributions: Even small increases can make a big difference over time.
Diversify your investments: Don’t put all your eggs in one basket. Spread your investments across different asset classes to manage risk.
Consider a Roth IRA: This option allows you to pay taxes now and enjoy tax-free withdrawals in retirement.
Life happens - Plan for the unexpected
An emergency fund is crucial for handling life’s curveballs, from unexpected medical bills to sudden job loss. It's your safety net, so you don't have to raid your retirement savings when things get tough.
Don’t forget that retirement planning is just one type of planning. Life is full of things you’ll want to plan for and the good news is that the earlier you start, the more you’ll be able to accomplish. So what are you waiting for?
Stash Wealth offers financial planning services for 30-somethings who earn six figures.
Whether you’re saving up for Tahiti or a Tesla, we help you achieve your short-term and long-term financial goals.
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Written by Priya Malani
Founder & CEO
Priya is an industry thought leader and personal finance expert for HENRYs [High Earners, Not Rich Yet]. Her relatable, no-bullshit style has garnered attention from the largest media outlets in the country including Forbes, The Wall Street Journal, Business Insider, NerdWallet, and more.
