How Much Should I Have Saved by 30?

January 04, 2022  |  Porte Team

How do you want your financial future to look? How about where or when you would like to retire? And how much money would you need for retirement?

If you’re thinking that planning this far ahead isn’t necessary in your twenties, you may miss out on some huge financial opportunities you can take advantage of now. Life can get more expensive and even complicated as you get older. As people approach their 30s and 40s, they can take on more responsibilities and expenses, affecting their ability to save for retirement.

By saving early, you can enjoy so many more opportunities later and relieve much of the financial burden that comes with preparing for your financial future. In this blog, we’ll share some worthwhile savings goals you can set in your 20s to reach by the time you are 30!


Savings Goals by 30 Years Old

There is no magic number for the exact amount you’ll want to save by 30 years old as it is dependent upon the lifestyle you would like to have, where you would like to live, and of course, your income and budget. However, some rules of thumb can help us set reasonable savings goals.


1x Annual Salary Saved by 30

Numerous financial experts and organizations recommend this approach. According to this popular benchmark, if you make $40,000 a year, you should have $40,000 or more in savings by the time you are thirty years old. As your salary increases, you should place more funds into savings.

According to a recent article from Fidelity, saving 10x your pre-retirement income by the age of 67 should help you maintain your lifestyle in retirement.A Of course, the amount you’ll ultimately need depends on a lot of factors, especially income and cost of living. The good news is that you can start saving now, and by saving 1x your salary by 30, you will make huge progress in your savings journey.

Side note: Higher earners will get a smaller portion of their income in retirement from Social Security. So, if you think this could be you in the future, you may need more saved or assets in relation to your income.B


Contribute 5%-15% Towards Your Retirement Plan

If you already contribute to a retirement plan, such as a 401(k) or a traditional individual retirement account (IRA), that’s great news. You should aim to contribute around 5% to 15% of your pre-tax income towards your retirement plan. Some employers match your contributions to a certain amount, so be sure to maximize the opportunity here since it’s free money!

But, wait — what about student loans? Yes, we recognize that many young adults are in the process of paying off student loans throughout their 20s. If 5% of your pre-tax income is not a feasible contribution in light of your debt, you can start with a lower percentage. For example, you could start with 1% and increase your contribution each year as you pay down your student loan debt. In following this strategy, you can challenge yourself to reach 5% to 15% by the time you’re 30! If you’re trying to pay off your student loans quickly so you can start saving more, check out 7 Ways to Pay Off Your Student Loans Fast!

Open a Roth IRA

Along with pre-tax contributions, post-tax dollars could build a Roth IRA. A Roth IRA is certainly a retirement plan that you may want to consider opening and investing in as a young adult.

Roth IRA contributions are not tax-deductible like a traditional IRA, but investment gains and withdrawals are tax-free at retirement age. Since you’re using post-tax dollars, if you open and contribute towards a Roth IRA in your 20s, you are not taxed on your compounded earnings once you withdraw, providing significant tax savings.C

Note: There are limitations to contributing to a Roth IRA. Unlike a traditional IRA, income limits determine how much you can contribute. For more information, you can view the IRS’ recent update regarding Roth IRA contributions for 2022


Consistently Save 20% of Your Monthly Take-Home Income Each Month

Having a 10-year savings goal such as 1x income by 30 can be a helpful initial goal, but you can experience numerous changes to your salary throughout your twenties. And a change in salary, especially in your late twenties, can make this goal quite tricky.

Another great approach is to save 20% of your net income each month. By following this savings strategy, you won’t find yourself in the predicament of figuring how much to save if you experience a bump in your salary close to your 30s. You’ll just put 20% into your savings regardless of how much money you take home each paycheck.

Following this strategy consistently through your 20s, 30s, and beyond can set you up nicely for the future!

This savings goal is a component of the 50/30/20, our favorite budgeting strategy! If you’re looking for a great budget plan that accounts for all of your monthly expenses and savings, you can learn more about the 50/30/20 and other great money-saving tips in The Beginners Guide to Budgeting Like a Boss in 2021.

This blog is not intended to provide any tax, legal, financial planning, insurance, accounting, investment, or any other kind of professional advice or services. To make sure that any information or suggestions in this blog fit your particular circumstances, you should consult with an appropriate tax or legal professional before taking action based on any suggestions or information that we provide.


B. You’re Age 35, 50, or 60: How Much Should You Have Saved for Retirement by Now? | T. Rowe Price (

C. The Best IRA for a 20-Something Investor (

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