As you near 30, you probably have lots of different financial goals. Maybe you’re planning to buy a house. Or perhaps you’re considering starting a family. And while retirement may seem a long way off, it’s never too early to start saving and planning for your future.
You might know you want to save money for all these different things, but you don’t know exactly how much you should be saving. Chances are, you may have been wondering, how much money should I have saved by 30?
The good news is, money you save now can add up. And if you invest that money in a retirement account or an investment portfolio, you can get longer-term growth on your money.
First, though, it helps to know how much you should be saving by age 30 to see if you’re on track. Learn how much you should have saved — plus tips to help you reach your savings goals.
Average/Median Savings by Age 30
The average savings for individuals by age 30 is approximately $20,540, and their median savings is $5,400, according to the Federal Reserve’s most recent Survey of Consumer Finances. It’s important to note that the Fed’s survey doesn’t look specifically at people who are age 30. Instead, it divides them into groups, including 25 to 34 year olds.
These savings amounts are in what the Fed calls “Transaction Accounts.” This includes checking and savings accounts and money market accounts.
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How Much Should a 30-Year-Old Have in Savings?
If you’re still asking yourself, how much money should I have saved by 30?, know this: By age 30, you should have the equivalent of your annual salary in savings, according to one rule of thumb. That means if you’re earning $54,000 a year, you should have $54,000 saved.
This number — $54,000 — is based on the average annual salary for those 25 to 34 years old, which is $54,080, according to 2023 data from the Bureau of Labor Statistics.
Strategies to Help You Reach Your Savings Goals by 30
If you don’t have $54,000 saved by age 30, you can still catch up and reach your financial goals.
Here are some techniques that can help you get there.
Set Up an Emergency Fund
Having an emergency savings fund to pay for sudden expenses is vital. That way you’ll have money to pay for emergencies like unexpected medical bills or to help cover your expenses if you lose your job, rather than having to resort to using a credit card or taking out a loan. Put three to six months’ worth of expenses in your emergency fund and keep the money in a savings account where you can quickly and easily access it if you need it.
Pay Down Debt
Debt, especially high-interest debt like credit card debt, can drain your income so that you don’t have much, if anything, left to put in savings. Make a plan to pay it off.
For example, you might want to try the debt avalanche method. List your debts in order of those with the highest interest to those with the lowest interest. Then, make extra payments on your debt with the highest interest, while paying at least the minimum payments on all your other debts. Once you pay the highest interest debt off, move on to the debt with the second highest interest rate and continue the pattern.
With the debt avalanche technique, you eliminate your most expensive debts first, which can help you save money. You may also get debt-free sooner because, as you pay the debt off, less interest accumulates each month.
If the avalanche method isn’t right for you, you could try the debt snowball method, in which you pay off the smallest debts first and work your way up to the largest, or the fireball method, which is a combination of the avalanche and snowball methods.
Start Investing
Retirement probably feels like a long way off for you. But the sooner you can start saving for retirement, the better, since it will give your savings time to grow.
If you have access to a 401(k) plan at work, take advantage of it. Once you open an account, the money will be automatically deducted from your paycheck each pay period, which can make it easier to save since you don’t have to think about it.
If your employer doesn’t offer a 401(k), or even if they do and you want to save even more for retirement, consider opening an IRA account. There are two types of IRAs to choose from: a traditional IRA and a Roth IRA. At this point in your life, when you’re likely to be earning less than you will be later on, a Roth IRA might be a good choice because you pay the taxes on it now, when your income is lower. And in retirement, you withdraw your money tax-free.
However, if you expect that your income will be less in retirement than it is now, a traditional IRA is typically your best choice. You’ll get the tax break now, in the year you open the account, and pay taxes on the money you withdraw in retirement, when you expect to be in a lower tax bracket.
Contribute the full amount to your IRA if you can. In 2024, those under age 50 can contribute up to $7,000 a year.
Take Advantage of 401(k) Matching
When choosing how much to contribute to your 401(k), be sure to contribute at least enough to get your employer’s matching funds if such a benefit is offered by your company.
An employer match is, essentially, free money that can help you grow your retirement savings even more. With an employer match, an employer contributes a certain amount to their employees’ 401(k) plans. The match may be based on a percentage of an employee’s contribution up to a certain portion of their total salary, or it may be a set dollar amount, depending on the plan.
Save More as Your Salary Increases
When you get a raise, instead of using that extra money to buy more things, put it into savings instead. That will help you reach your financial goals faster and avoid the kind of lifestyle creep in which your spending outpaces your earnings.
Though it’s tempting to celebrate a pay raise by buying a fancier car or taking an expensive vacation, consider the fact that you’ll have a bigger car payment to make every month moving forward, which can result in even more spending, or that you may be paying off high interest credit card debt that you used to finance your vacation fun.
Instead, make your celebration a little smaller, like dinner with a few best friends, and put the rest of the money into a savings or investment account for your future.
The Takeaway
By age 30, you should have saved the equivalent of your annual salary, according to a popular rule of thumb. For the average 30 year old, that works out to about $54,000.
But don’t fret if you haven’t saved that much. It’s not too late to start. By taking such steps as paying down high-interest debt, creating an emergency fund, saving more from your salary, and saving for retirement with a 401(k), IRA, or other investment account, you still have time to reach your financial goals.
Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).
FAQ
Is $50k saved at 30 good?
Yes, saving $50,000 by age 30 is quite good. According to one rule of thumb, you should save the equivalent of your annual salary by age 30. The latest data from the Bureau of Labor Statistics shows that the annual average salary of a 30 year-old is approximately $54,080. So you are basically on target with your savings.
Plus, when you consider the fact that the average individual’s savings by age 30 is approximately $20,540, according to the Federal Reserve’s most recent Survey of Consumer Finances, you are ahead of many of your peers.
Is $100k savings good for a 30 year old?
Yes, $100,000 in savings for a 30 year old is good. It’s almost double the amount recommended by a popular rule of thumb, which is to save about $54,000, or the equivalent of the average annual salary of a 30 year old, based on data from the Bureau of Labor Statistics.
Where should I be financially at 35?
By age 35, you should save more than three times your annual salary, according to conventional wisdom. The average salary of those ages 35 to 44 is $65,676, according to the Bureau of Labor Statistics. That means by 35 you should have saved approximately $197,000.
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Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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