How Much Should I Have Saved for Retirement by Age 30?


With my husband recently turning 30, and my 30th birthday coming up in about a year, I started to think of what we needed to accomplish in order to get our finances in order. We’ve worked on paying off debt aggressively, have opened several savings accounts for a variety of purposes (Christmas, Emergency Fund, New Car Fund, etc), and have been contributing to retirement. But we have no retirement plan, and we have no idea how much it will cost us to retire and afford the lifestyle we want to live.

We’ve sort of been contributing blindly with the idea that somehow whatever we contribute will hopefully be enough. I decided to turn toward the experts to find out how much money I really should have saved for retirement by age 30.

What the Experts Suggest to Save for Retirement

Save 15% of your take-home pay each year. Marotta on Monday suggests that you should be saving 15% of your take-home pay each year in order to retire comfortably, assuming that you start at age 25. This calculation is good because it works based off what you earn. In this case, you would have 75% of your annual salary in your retirement accounts by the time you reach 30.

The equivalent of one-year’s salary pre-tax in your retirement accounts. According to Wealthy on My Way, you should have a whole year’s salary saved up by the time you reach 30–and he doesn’t even give you a break on taxes!

One year’s salary by 35. Fidelity Investments gives you a little more leeway in your retirement savings, assuming you retire at age 67 and want to live off 85 percent of your final pay.  All experts have so far recommended that you start saving at age 25–if you start later, you’ll have to increase your contributions to catch up with compounding interest.

If these numbers are shocking to you, don’t worry–you’re not alone.

A recent survey conducted by the Employee Benefit Research Institute showed that among workers 25-34 years old, 88% had less than $50,000 set aside for retirement, and 57% had less than $10,000. If you don’t consider age, 48% of Americans have less than $10,000 in retirement savings.

Those are scary numbers. And according to the study, just 14 percent of Americans are very confident they will have enough money to live comfortably in retirement.

Make a Plan for Retirement

It’s easy to just keep ignoring the facts and figures, and simply depend on hope to get you through retirement, but avoiding the issue won’t help you. Utilize the tips from the experts to make a viable action plan to save for retirement.

Contribute the full company match to your 401K. If your company matches a percentage of your 401K, usually around 2 to 5%, contribute enough to garner the full match.

Contribute to a Roth IRA. A Roth IRA, with its after-tax contributions, has come into vogue as the new account to help you reach your retirement savings faster. Because most workers earn more toward their end of their careers, it is believed that after-tax contributions in a Roth IRA are at a lower tax rate than what you will be taxed when you retire.

Diversify your portfolio. You don’t have to limit yourself to retirement accounts in order to save for retirement. There are lots of other investments, such as real estate, stocks and bonds, that can help you reach your retirement goals.

When it comes to retirement savings, it may be helpful to sit with a financial adviser to guide you in making sure you’re contributing enough toward your retirement.