How Much Money Should I Have Saved By 30? (2024)

FAQs

How Much Money Should I Have Saved By 30? ›

By 30, it would be beneficial to have $50,000 saved. This comes from the goal of being able to replace about 70% to 80% of your pre-retirement income in retirement.” While having the equivalent of your annual salary saved up by 30 may seem unattainable, Kovar believes it's achievable if you start saving in your 20s.

How much money you should have saved by 30? If you're 30 and wondering how much you should have saved, experts say this is the age where you should have the equivalent of one year's worth of your salary in the bank. So if you're making $50,000, that's the amount of money you should have saved by 30.

By the time you're 25, you probably have accrued at least a few years in the workforce, so you may be starting to think seriously about saving money. But saving might still be a challenge if you're earning an entry-level salary or you have significant student loan debt. By age 25, you should have saved about $20,000.

The idea is to spend 50% of your after-tax income on essential needs, 30% of your income on things you want, and to save 20% of your income. Of course, you can aim to save 30% of your income and spend 20% of it on your wants. If saving 20% isn't realistic, aim for a slightly lower amount, such as 10% or even 5%.

20k is the ideal savings amount for a 25 year old

“Ideally, your savings should reach $20,000 by the time you turn 25,” says Bill Ryze, a certified Chartered Financial Consultant (ChFC) and board advisor at Fiona. The national average for Americans between 25 and 30 years of age is $20,540.

The 50/30/20 budget rule states that you should spend up to 50% of your after-tax income on needs and obligations that you must have or must do. The remaining half should be split between savings and debt repayment (20%) and everything else that you might want (30%).

In fact, people in their 20s were able to save an average of nearly $5,580 last year, according to data from New York Life, putting them third on the list of age groups that saved the most in 2023. That's less than the average amount of $7,148 people in their 20s aimed to save, but how much should you really be saving?

“By the time you're 40, you should have three times your annual salary saved. Based on the median income for Americans in this age bracket, $100K between 25-30 years old is pretty good; but you would need to increase your savings to reach your age 40 benchmark.”

By 30, you should have a decent chunk of change saved for your future self, experts say — in fact, ideally your account would look like a year's worth of salary, according to Boston-based investment firm Fidelity Investments, so if you make $50,000 a year, you'd have $50,000 saved already.

Saving $1,000 per month can be a good sign, as it means you're setting aside money for emergencies and long-term goals. However, if you're ignoring high-interest debt to meet your savings goals, you might want to switch gears and focus on paying off debt first.

Is 20k in savings good? ›

The recommended amount to save varies from person to person, as everyone's financial situation differs. But for many people, $20,000 is a sizable emergency fund goal that will go far. If you have a large chunk of savings set aside, make sure you keep it in a bank account that earns interest.

If your monthly living expenses total $5,000, and you have $25,000 saved in your emergency fund, you'll have enough money to cover your expenses for five months. Is that enough? You might consider setting aside an additional $5,000, so you have enough money saved to cover six months of bills.

Fast answer: Rule of thumb: Have 1x your annual income saved by age 30, 3x by 40, and so on.

So, how much should you have saved by 30? This will vary from person to person. If you're looking for a ballpark figure, Taylor Kovar, certified financial planner and CEO of Kovar Wealth Management says, “By age 30, a good rule of thumb is to aim to have saved the equivalent of your annual salary.

If you start setting aside just $500 a month for retirement at age 35, the money will still accumulate significantly into your golden years. In fact, by the time you reach 65 (when retirement typically begins), you will have saved over $300,000!

By age 35, aim to save one to one-and-a-half times your current salary for retirement. By age 50, that goal is three-and-a-half to six times your salary. By age 60, your retirement savings goal may be six to 11-times your salary. Ranges increase with age to account for a wide variety of incomes and situations.

By age 25, you should aim to have an emergency fund of 3-6 months of living expenses, and start regularly contributing to retirement savings to take advantage of compound interest over time, even if it's just small amounts.

Here's the real truth: It's never too late to start growing your money. And while time does matter when it comes to investing, it doesn't need to matter in the way you might think. You may be surprised at the impact just a few years can have on your savings.

The 30% Rule Is Outdated

Rather than looking at what consumers should be spending on housing, however, the government selected these percentages because that's what consumers were spending. Abiding by the 30% rule as the de facto personal finance rule is outdated and does not accurately reflect today's living expenses.

Putting aside $300 per month by the age of 39 could set you up to be a millionaire by the time you retire. Investing in exchange-traded funds is a good way to minimize risk and simplify your overall investing strategy.

How many people live paycheck to paycheck? ›

How Many Americans Are Living Paycheck to Paycheck? A 2023 survey conducted by Payroll.org highlighted that 78% of Americans live paycheck to paycheck, a 6% increase from the previous year. In other words, more than three-quarters of Americans struggle to save or invest after paying for their monthly expenses.

One common benchmark is to have two times your annual salary in net worth by age 35. So, for example, say that you earn the U.S. median income of $74,500. This means that you will want to have $740,500 saved up by age 67. To reach this goal, at age 35 you may want to have about $149,000 in savings.

A new Empower study reveals more than 1 in 5 (21%) Americans have no emergency savings — money set aside for unexpected financial events such as job loss, home and car repairs, and medical bills. Nearly 2 in 5 (37%) couldn't afford an emergency expense over $400.

While $40,000 is a good start on the road to building a nest egg, you probably want to retire with a lot more money than that. But it may be more than possible if you commit to saving and investing in a brokerage account consistently for the remainder of your career.

By age 30, Fidelity recommends having the equivalent of one year's salary stashed in your workplace retirement plan. So, if you make $50,000, your 401(k) balance should be $50,000 by the time you hit 30.