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If you’re wondering how much you should have in savings, you may know that many financial experts feel three to six months’ worth of living expenses is vital. That said, you might also be curious if more cash in the bank may provide a greater sense of security and well-being.

Despite the saying that money can’t buy happiness, research indicates that having cash can indeed enhance one’s sense of well-being. A study conducted at the Wharton School of Management at the University of Pennsylvania found having more money does boost your positive feelings.

So with that in mind as well as your financial security, here’s a closer look at how much you should have in savings to get those good vibes going and give you a sense of security during uncertain times.

Why Should I Have Savings?

You want to be financially savvy, right? Most people do. But a startling 12% of Americans have no savings, according to a recent YouGov survey. Another 13% say they have less than $100 and 14% indicate they have between $1,000 and $4,999.

A savings account helps you avoid going into more debt and prepare for unexpected emergencies. Imagine if your car had a major breakdown, or your cell phone was trampled on during a weekend outing. How would you afford the unpredictable repairs?

An emergency fund stocked with extra cash can help you avoid taking out personal loans or using a credit card to cover an unexpected expense. And while emergencies are never fun, it might help you feel a little bit better knowing that you’re prepared. In SoFi’s April 2024 Banking survey of 500 U.S. adults, 45% of respondents said they have less than $500 in an emergency fund.

How Much Money Should I Have in Savings?

If you don’t have much in savings, where exactly do you start? A general rule of thumb is to have three to six months of living expenses saved up, not including money you’re setting aside for long-term planning, such as retirement funds. But keep in mind that your living expenses may increase as you age, as you start growing your family, have mortgage payments, or are saving for retirement, so you might need more in a checking and savings account.

But that is still a good figure to aim for. Once you figure out your bare minimum monthly expenses and multiply it by three or six, you can calculate how much to aim for and get that sum saved.

It’s worth noting that some money experts say 10 times your monthly expenses may be a wiser amount of a cash cushion to stash away.

However, many Americans are not yet stashing away enough for emergencies, according to our survey data.

How Much Money Should I Have in Savings by Age?

Now, here’s a look at how much to sock away in savings based on your age.

18-24: At Least $500 in Savings

Being a college student or recent grad is expensive. It’s hard to keep up with tuition and rent. However, as a college student, you can try starting with $500 in emergency savings and working your way up.

A $500 emergency fund is a great place to start for young people whose expenses are typically less than older Americans. Even just saving $10 per week can help you reach your goal in about a year.

20s: 3-6 Months of Expenses in Savings

After graduation, you’re figuring out the real world for the first time. Most post-graduates are determining how to pay back student loans, and maintain new living expenses. It may help to break down your larger goal of three to six months’ worth of living expenses into first saving $1,000 in your emergency fund.

This can help you feasibly achieve your savings goal while preparing for most emergencies with a sum of cash on hand. You might want to try automating your savings and having a small amount transferred from your checking account on payday to build up your reserves.

30s: 6+ Months of Expenses in Savings

By the time you reach your thirties, ideally you’d have at least six months of expenses saved. At this point, you may even be questioning if you should invest more or continue to save. An easy way to determine how much you need to save is to create a budget of your basic living expenses. Twenty-three percent of people in SoFi’s survey report using budgeting tools offered by their bank.

How much do you need to survive in the case of job loss or a medical emergency? A savings account of at least six months of your usual expenses can help you feel safe enough to cover rent, utilities, and food while you get back on your feet.

40s: 6+ Months of Expenses in Savings

How would you survive if faced with a job loss? According to the Center on Budget and Policy Priorities, unemployment benefits vary state-to-state, but many states give up to 26 weeks in benefits.

However, the amount you receive might not be on par with what you are earning, so consider alternative safety nets. As an example, in New York, which can have a high cost of living, unemployment benefits may range from $100 to $500 a week.

When you’re in your 40s and 50s, replacing your income may prove to be more difficult as you search for positions with more work experience. If the government covers roughly six months of unemployment, then you’ll likely want to have at least that much and then some in your own savings.

50s: 6+ Months of Expenses in Savings

If you are in your 50s and wondering how much to have in savings, the answer again is at least six months’ worth of living expenses and ideally significantly more. For many people, this is their period of peak earnings. They may have multiple expenses as well, such as a mortgage, children’s education, and eldercare. Yet only 10% of people in SoFi’s Banking survey have more than $10,000 in their emergency savings.

Given these pressing concerns, you want to make sure you have a cushion if you were to face an emergency like job loss. What’s more, you don’t want to tap your retirement savings, which can trigger steep early-withdrawal penalties.

Where Should I Put My Savings?

If you’re building up an emergency fund, then placing your savings in an account that can be easily accessed, like a savings account, is probably ideal. That said, there are different options for putting your savings, depending on your goals.

Retirement Accounts

Putting your near-term or emergency savings into a 401(k) or mutual fund might not be the best place for this purpose because these accounts are not very liquid. In other words, you can’t easily access the money when you need it.

Plus, withdrawing early from accounts specifically set up for retirement may come with penalties and hefty fees if you are under the age of 59.5. In addition, these funds may not be insured, depending on the type of account.

That said, a retirement account is an important tool for long-term savings, since they may help grow your funds over time to help provide you with the money you’ll need later in life.

Investments

Investments can offer a place to grow your savings at a healthy rate of return over time. However, this money will not be insured, and you could face losses if the market drops. That could leave you vulnerable if you needed to access money at that moment. You might look into short-term vs. long-term investments to see how you may want to balance different types of savings plans.

Savings Account

A savings account can provide a secure place to store your savings. There are different kinds of savings accounts to consider, and you may find varying rates of return depending on the annual percentage yield (APY) offered and how often compounding occurs. For instance, there are high-yield savings accounts that offer higher APYs, which 23% of the SoFi survey respondents said they have.

When comparing traditional vs. online banks, you may find that the latter, since they don’t have brick-and-mortar locations, may offer better rates and lower fees.

Recommended: Use SoFi’s savings account interest calculator to see how much your money can grow over time.

Checking Account

While a checking account is a secure, typically FDIC-insured place to store your savings, it’s really designed to be more of a place for paying bills and for everyday needs. You likely won’t earn much interest. In SoFi’s survey, 88% of the respondents with bank accounts have checking accounts, while 71% have savings accounts.

Cash

While cash is perhaps the most liquid of ways to store your money, it can’t promise security. You could be robbed or could lose your money. That’s not what you want to happen to your nest egg!

This chart helps you compare the different places to put your savings.

How Much Does the Average American Have in Savings

While you’ve now read the advice to have three to six months’ worth of living expenses stashed away, many Americans are not hitting that goal.

According to the Federal Reserve’s Board Survey of Consumer Finances, here are the average savings:

•   Under 35: $11,200

•  Age 35-44: $27,900

•  Age 45-54: $48,200

•  Age 55-64: $57,800.

Building Up Savings More Quickly

Convinced you need more savings, and a traditional savings account just won’t cut it? Here are a couple of ways to help build up your savings faster than a savings account alone.

Selling Your Stuff

Take inventory of things in your garage or closet that you can sell. There are several buy/sell apps out there that can make it easier to sell your unwanted items, and many places where you can sell your stuff and recoup some money.

Any money you make off of your items can be thrown into your savings account. This method is a win-win because you get rid of things you aren’t using, and you can build up your savings without changing your spending habits.

Cutting Out Unnecessary Spending

Want to make significant strides with your savings habit? It might be time to look at your expenses and cut out unnecessary spending.

There are several things you could change, even if it’s just temporary. Replace your $100 per month gym membership by exercising with free, full-length workout videos online. Cut out your cable expense and go all-in with a cheaper Netflix subscription.

How a Budget Can Help You Save

Yes, the dreaded budget. Actually seeing how much you spend each month in a written budget can help you save. When you track your monthly income and expenses, you can quickly identify what areas of life are costing the most so you can make adjustments.

An online budgeting tool like SoFi’s can help you track your spending, which can help you see where you might be able to trim some fat from your expenses.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

How much should a 30 year old have in savings?

How much money you should have in savings at age 30 will vary, but an individual should have at least three to six months’ worth of basic living expenses saved. Some financial advisors suggest that you should have the equivalent of one year’s salary (gross) saved.

How much does the average person have in savings?

Savings vary person to person, and with age. Currently, the average American under age 35 has approximately $11,200 saved.

Is $20000 a good amount of savings?

Whether $20000 is a good amount to have saved will depend on a few factors. If you are a single recent college grad, it could be a very good starting point for an emergency fund. However, if you have several dependents and are taking retirement savings into account, then you may consider strategies for increasing your savings.

SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

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It’s pretty easy to rollover your old 401(k) retirement savings to an individual retirement account (IRA), a new 401(k), or another option — yet millions of workers either forget to rollover their hard-won retirement savings, or they lose track of the accounts. Given that a 401(k) rollover typically takes minimal time and, these days, minimal paperwork, it makes sense to know the basics so you can rescue your 401(k), roll it over to a new account, and add to your future financial security.

Whether you’re starting a new job and need to roll over your 401(k), or are looking at what other options are available to you, here’s a rundown of what you need to know.

401(k) Rollover Options

For workers who have a 401(k) and are considering next steps for those retirement funds — such as rolling them to an IRA or another 401(k), here are some potential avenues.

1. Roll Over Money to a New 401(k) Plan

If your new job offers a 401(k) or similar plan, rolling your old 401(k) funds into your new 401(k) account may be both the simplest and best option — and the one least likely to lead to a tax headache.

That said, how you go about the rollover has a pretty major impact on how much effort and paperwork is involved, which is why it’s important to understand the difference between direct and indirect transfers.

Here are the two main options you’ll have if you’re moving your 401(k) funds from one company-sponsored retirement account to another.

Direct Rollover

A direct transfer, or direct rollover, is exactly what it sounds like: The money moves directly from your old account to the new one. In other words, you never have access to the money, which means you don’t have to worry about any tax withholdings or other liabilities.

Depending on your account custodian(s), this transfer may all be done digitally via ACH transfer, or you may receive a paper check made payable to the new account. Either way, this is considered the simplest option, and one that keeps your retirement fund intact and growing with the least possible interruption.

Indirect Rollover

Another viable, but more complex, option, is to do an indirect transfer or rollover, in which you cash out the account with the expressed intent of immediately reinvesting it into another retirement fund, whether that’s your new company’s 401(k) or an IRA (see above).

But here’s the tricky part: Since you’ll actually have the cash in hand, the government requires your account custodian to withhold a mandatory 20% tax. And although you’ll get that 20% back in the form of a tax exemption later, you do have to make up the 20% out of pocket and deposit the full amount into your new retirement account within 60 days.

For example, say you have $50,000 in your old 401(k). If you elected to do an indirect transfer, your custodian would cut you a check for only $40,000, thanks to the mandatory 20% tax withholding.

But in order to avoid fees and penalties, you’d still need to deposit the full $50,000 into your new retirement account, including $10,000 out of your own pocket. In addition, if you retain any funds from the rollover, they may be subject to an additional 10% penalty for early withdrawal.

Pros and Cons of Rolling Over to a New 401(k)

With all of that in mind, rolling over your money into a new 401(k) has some pros and cons:

2. Roll Over Your 401(k) to an IRA

If your new job doesn’t offer a 401(k) or other company-sponsored account like a 403(b), you still have options that’ll keep you from bearing a heavy tax burden. Namely, you can roll your 401(k) into an IRA.

The entire procedure essentially boils down to three steps:

1. Open a new IRA that will accept rollover funds.

2. Contact the company that currently holds your 401(k) funds and fill out their transfer forms using the account information of your newly opened IRA. You should receive essential information about your benefits when you leave your current position. If you’ve lost track of that information, you can contact the plan sponsor or the company HR department.

3. Once your money is transferred, you can reinvest the money as you see fit. Or you can hire an advisor to help you set up your new portfolio. It also may be possible to resume making deposits/contributions to your rollover IRA.

Pros and Cons of Rolling Over to an IRA

This option also has its pros and cons, however.

3. Leave Your 401(k) With Your Former Employer

Leaving your 401(k) be – or, with your former employer – is also an option.

If you’re happy with your portfolio mix and you have a substantial amount of cash stashed in there already, it might behoove you to leave your 401(k) where it is.

You’ll also want to dig into the details and determine how much control you’ll have over the account, and how much your former employer might.

You might also consider any additional fees you might end up paying if you leave your 401(k) where it is. Plus, racking up multiple 401(k)s as you change jobs could lead to a more complicated withdrawal schedule at retirement.

Pros and Cons of Leaving Your 401(k) Alone

4. Cash Out Your Old 401(k)

Cashing out, or liquidating your old 401(k) is another option. But there are some stipulations investors should be aware of.

Because a 401(k) is an investment account designed specifically for retirement, and comes with certain tax benefits — e.g. you don’t pay any tax on the money you contribute to your 401(k), depending on the specific type — the account is also subject to strict rules regarding when you can actually access the money, and the tax you’d owe when you did.

Specifically, if you take out or borrow money from your 401(k) before age 59 ½, you’ll likely be subject to an additional 10% tax penalty on the full amount of your withdrawal — and that’s on top of the regular income taxes you’ll also be obligated to pay on the money.

Depending on your income tax bracket, that means an early withdrawal from your 401(k) could really cost you, not to mention possibly leaving you without a nest egg to help secure your future.

This is why most financial professionals generally recommend one of the next two options: rolling your account over into a new 401(k), or an IRA if your new job doesn’t offer a 401(k) plan.

Pros and Cons of Cashing Out Your 401(k)

When Is a Good Time to Roll Over a 401(k)?

If there’s a good time to roll over your 401(k), it’s when you change jobs and have the chance to enroll in your new employer’s plan. But you can generally do a rollover any time.

That said, if you have a low balance in your 401(k) account — for example, less than $5,000 — your employer might require you to do a rollover. And if you have a balance lower than $1,000, your employer may have the right to cash it out without your approval. Be sure to check the exact terms with your employer.

When you receive funds from a 401(k) or IRA account, such as with an indirect transfer, you’ll only have 60 days from the date you receive them to then roll them over into a new qualified plan. If you wait longer than 60 days to deposit the money, it will trigger tax consequences, and possibly a penalty. In addition, only one rollover to or from the same IRA plan is allowed per year.

The Takeaway

Rolling over your 401(k) — to a new employer’s plan, or to an IRA — gives you more control over your retirement funds, and could also give you more investment choices. It’s not difficult to rollover your 401(k), and doing so can offer you a number of advantages. First of all, when you leave a job you may lose certain benefits and terms that applied to your 401(k) while you were an employee. Once you move on, you may pay more in account fees for that account, and you will likely lose the ability to keep contributing to your account.

There are some instances where you may not want to do a rollover, for instance when you own a lot of your old company’s stock, so be sure to think through your options.

Prepare for your retirement with an individual retirement account (IRA). It’s easy to get started when you open a traditional or Roth IRA with SoFi. Whether you prefer a hands-on self-directed IRA through SoFi Securities or an automated robo IRA with SoFi Wealth, you can build a portfolio to help support your long-term goals while gaining access to tax-advantaged savings strategies.

FAQ

How can you roll over a 401(k)?

It’s fairly easy to roll over a 401(k). First decide where you want to open your rollover account, then contact your old plan’s administrator, or your former HR department. They typically send funds to the new institution directly via an ACH transfer or a check.

What options are available for rolling over a 401(k)?

There are several options for rolling over a 401(k), including transferring your savings to a traditional IRA, or to the 401(k) at your new job. You can also leave the account where it is, although this may incur additional fees. It’s generally not advisable to cash out a 401(k), as replacing that retirement money could be challenging.