How to Save for Retirement at 30
Table of Contents
Learning how to save for retirement at 30 is an ideal time to start because you may have a steady salary and access to a workplace retirement plan. It can also be complicated: You may have more expenses and new choices to think about.
The main reason to start saving for retirement in your 30s, though, is that time is on your side. Setting aside even a small amount on a regular basis can help grow your nest egg over time.
While an employer-sponsored plan can make saving easier, you can also set up and manage a retirement plan using an IRA.
Key Points
• Saving for retirement at 30 is crucial because this is when time is on your side, and can help your nest egg grow.
• At the same time, the onset of adult financial responsibilities may make it hard to set aside money for the future.
• If you have access to a workplace retirement plan, like a 401(k), this can get you started. Setting aside even small amounts on a steady basis can add up over time.
• Even without a 401(k), it’s possible to open your own IRA and start saving and investing now.
• Remember that saving for retirement comes with certain tax advantages that may be useful in the present and down the road.
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5 Ways to Start Saving for Retirement at 30
You can set yourself on a path to healthy retirement savings by using the following strategies. First up, putting money into a designated retirement plan.
1. Contribute to a Workplace Account or an IRA
Saving in tax-advantaged retirement accounts available through work, such as a 401(k), is one of the best things you can do to start saving for retirement.
• Annual contributions
Your 401(k) allows you to contribute up to $23,500 a year in 2025, and $24,500 in 2026. Contributions come directly from your paycheck as pre-tax dollars, which lowers your taxable income in the year you make them.
Regular, automatic contributions, coupled with the benefits of compounding returns, can help your savings grow. Starting a 401(k) at 30 gives you a few decades for your funds to grow over time.
• Employer matching funds
Also, many 401(k)s allow employers to contribute to your retirement, and many will offer matching funds as part of your compensation package. Aim to save at least as much as is required to receive your employer’s match.
Work toward maxing out your 401(k) contributions, especially as your salary grows over time.
• Investing your 401(k)
Many workplace plans offer pre-set portfolios, like target-date funds, as well as a wide selection of other investments.
In some cases, your employer may select a basic option for you. It’s important to check so that you can make the best choice for your financial goals. You may be able to invest online directly through the plan sponsor.
You can access the funds penalty-free once you reach age 59 ½, but you will owe taxes on the money at that time.
Recommended: How to Invest Your 401(k)
2. Open an IRA
An IRA is a retirement account that anyone with earned income can open. If you don’t have a 401(k) at work, you can open an IRA, which will give you access to a tax-advantaged account to save for retirement.
Even if you already have a 401(k), opening an IRA can be a good way to save even more, though you may not be able to deduct your contributions. The contribution limit for an IRA 2025 is $7,000 per year, and the limit is $7,500 per year in 2026.
IRAs come in two different types: traditional and Roth IRAs. If you don’t have a 401(k), you can make contributions to a traditional IRA with pre-tax dollars. Like a 401(k), money in these accounts grows tax-deferred, and you’ll pay the taxes on it when you make withdrawals in retirement.
If you meet certain income restrictions, you may be able to contribute to a Roth IRA instead or in addition to these tax-deferred accounts. With a Roth, you make the contributions with after-tax dollars, but your money will grow tax-free inside the account, and you do not have to pay taxes when you make withdrawals.
Recommended: Traditional vs. Roth IRA: How to Choose the Right Plan
3. Plan Your Asset Allocation
Diversification is a strategy whereby you spread your money across different asset classes. To minimize risk from a decline in one type of asset, it typically makes sense to create a diversified portfolio, including a mix of asset classes, such as stocks, bonds and other assets.
Understanding Mutual Funds
Owing to the difficulty of researching, choosing, and managing multiple securities, most retirement savers choose to invest in mutual funds or exchange-traded funds (ETFs) within their retirement plans. These funds are a type of pooled investment that holds hundreds of different securities.
For example, if you buy shares in an ETF that tracks the S&P 500 index, you’ll be investing in the 500 stocks included in that index.
You may want to invest in stock mutual funds or ETFs, bond mutual funds or ETFs, or hybrid funds that include some of each type of asset.
Understanding Asset Allocation
Your asset allocation refers to the proportion of each asset class that you hold. Your asset allocation will reflect your goals, risk tolerance, and time horizon. Given the relatively long period until your retirement, you might consider a relatively aggressive portfolio consisting mostly of stocks in your retirement account.
Stocks typically provide the most potential for growth, but they also fluctuate more than some other asset classes, and they can be risky. Since you have three decades or more before you retire, you have time to ride out the natural ups and downs of the market.
Bonds tend to be less volatile than stocks but also offer lower returns, and may balance out the riskier equity allocation. As you approach retirement, you may consider rebalancing your asset allocation to include more conservative investments to help protect the income you will need to draw upon soon.
Target-date funds are a type of mutual fund that automatically readjusts your portfolio as you near your target date, often the year in which you wish to retire.
4. Diversify Within Asset Classes
Just as a portfolio with different types of assets offers some downside protection, so too, does diversification within those asset classes. If you invest the entire stock portion of your portfolio shares in just one fund and the share price drops, the value of your entire portfolio drops as well.
Now imagine that you own shares in 500 different companies. When one stock fares poorly, it will have a relatively small effect on the rest of your portfolio. Diversification helps limit the negative effects that any asset class, sector, or company could have on your portfolio.
You can further diversify your portfolio by including companies from different sectors and of all sizes from different parts of the globe. This same idea is true for other asset classes. For example, you could hold funds with a mix of government and corporate bonds, and the corporate bonds could represent companies from various sectors and locations.
5. Don’t Cash Out Your 401(k) When You Get a New Job
If you’re only in your 30s, it’s likely that you’ll change jobs a couple of times or more, over the course of your career. When you change jobs, you’ll have a number of options for what to do with the 401(k) you hold with your previous employer.
One of these options is to cash out your 401(k). But this is typically not a great idea from a personal finance perspective. If you take a lump sum payment and you’re younger than 59 ½, you will owe income taxes on the withdrawal, and also a 10% early withdrawal penalty. What’s more, your money will no longer be working for you in a tax-advantaged account, potentially setting you back in your retirement savings goals.
A better option is to roll over your 401(k) into another tax-advantaged retirement account, such as your new employer’s plan, if they offer one, without paying income taxes. Or you can roll your 401(k) into an IRA without paying taxes. IRA accounts offer the added benefit of additional investment options, and they may have lower fees than your 401(k).
6. Protect Your Earnings with Disability Insurance
An injury or an illness that keeps you from going to work can hamper your retirement savings plan. However, disability insurance can help cover a portion of your lost income — usually between 50% and 70% — for a period of time.
Most employers offer some sort of short-term disability insurance, with a benefit period of three to six months. Some employers may offer long-term policies that cover periods of five, 10, or 20 years, or even through retirement age.
Check with your employer to see if you are covered by a disability policy and whether it provides enough coverage for your needs. If your employer’s plan falls short, or you don’t have access to one, you might consider purchasing a policy on your own.
The Takeaway
The earlier you can start saving for retirement the better. A long time horizon gives you the opportunity to take advantage of compounding growth for a longer period of time, which can help you increase the amount you’re able to save. Pay attention to the fees you’re paying on investments, which can eat away at returns over time.
Ready to invest for your retirement? It’s easy to get started when you open a traditional or Roth IRA with SoFi. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).
FAQ
Is starting to save for retirement in your 30s too late?
Not at all. Being in your 30s is often the best time to start, because you may have a steady salary and access to a workplace retirement plan. Even if you don’t, you can still set up your own retirement plan using an IRA. Setting aside money on a regular basis can build a nest egg over time, because time is what helps money to grow.
How much should a 30-year-old have saved for retirement?
One rule of thumb is to aim to save an amount that’s equivalent to your salary. But that’s just a benchmark. It’s far more important to start saving even small amounts, but on a regular basis, using automatic transfers.
Can I save for retirement if I have debt?
Being in debt makes it harder to save for the future, no doubt. And while it’s difficult to save when you’re paying down bills, saving even a little bit can make a big difference to your nest egg over time.
Photo credit: iStock/AJ_Watt
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