How Much Should You Have Saved by Age 30?

Where the “Saved by Age 30” Benchmark Comes From

Where These Benchmark Numbers Come From

Popular financial media loves to reference the idea that you should have the equivalent of one year’s salary saved up by age 30, weighted toward retirement accounts. That number is generally derived from retirement planning models.

If you plug your desired retirement age and expected retirement spending into a retirement calculator, it can tell you how much you should have saved up by certain ages to hit that goal (assuming consistent annual savings and historical market averages).

It’s helpful to know this number comes from a model that is working backward from YOUR retirement, not someone else’s. It also assumes you have been saving a consistent amount since your 20s in a relatively linear career. Since many people do not do that, the number can feel extremely misleading.

Why the One Year's Salary Rule Doesn't Work for Everyone

Why The “One Year’s Salary” Retirement Savings Rule Isn’t Ideal

Here are just a few reasons that benchmark could be WAY off for your specific situation.

Income and When You Started Your Career

Income: When you start earning a stable paycheck

Everyone doesn’t start their career at the same age. Many of us change careers at some point. Some people go to graduate school or take time off before starting their careers. If you’ve been earning at your career-level salary for less time, you’ll likely have less saved.

Cost of Living Makes a Big Difference

Cost of living: Where you live and what you spend money on

Someone making $45k a year in South Dakota likely has very different living expenses than someone making $90k in New York City. A year’s salary would go much further in one place than the other.

Student Loans and Other Debt

Debt: Student loans and other obligations

Maybe you went to graduate school and are starting your career with a hefty student loan debt load. Depending on your level of education, your student loans could be significant by the time you’re done (looking at you, medical students!).

Career Changes Affect Your Savings

Career path: Linear or flipped?

Have you taken the traditional path of straight-up climbing the career ladder? Most people don’t. Many people start their own businesses, switch fields completely, or take time off to raise kids or go back to school. And THAT is OK!

Instead of focusing on how much you should have saved by 30, focus on how much you save over time.

Why Your Savings Rate Matters More Than Your Balance

A More Helpful Exercise: How Much You SAVE By Age 30

A much more telling number for long-term financial success is less about how much you’ve saved, and more about your savings rate.

What percentage of your income do you regularly save (and invest)? Someone who consistently saves 15-20% of their income starting at age 25 is going to be just fine by retirement, even if they don’t hit some magical milestone at age 30.

What Counts as Savings?

Breaking Down: What Counts As “Saving”

To really understand how you’re doing, it can be helpful to break your finances into categories:

An emergency fund: Ideally three to six months of expenses in an account that is easily accessible but separate from your long-term investments.

Retirement savings: 401k, IRA, etc. that will hopefully grow over time through compounded contributions and any employer matching.

Investment accounts: Investing for the medium-to-long term in a taxable brokerage account.

Goal-based savings: Saving for a house down payment, wedding, or other near-term goal that you don’t want to invest long-term.

Taking a look at where you stand in each of these categories can be more helpful than looking for an aggregate “what should my net worth be by 30” type of number.

Financial Factors That Matter More Than Savings Benchmarks

What Actually Matters More Than “How Much Should I Have Saved By…?”

Your savings rate and trajectory over time. Someone who has $15,000 saved by 30 but keeps ratcheting up how much they save each year will be ahead of someone who saved $40,000 by age 30 but isn’t adding to their savings anymore.

Your debt compared to your income. Someone with a mortgage and some low-interest student loans they’re working towards paying off is in a very different situation than someone buried under credit card debt.

Income growth potential. Someone just starting out in their career with decades of income growth ahead of them will plan differently than someone who is maximized in their current role.

Saving consistency over your lifetime. As mentioned above, how much you are saving RIGHT NOW and have been able to save CONSISTENTLY over time is a far better predictor of long-term success than any one snapshot of your savings.

How to Calculate Your Personal Savings Goal

How To Know What YOU Should Have Saved By 30

Instead of Googling what the average savings is for a 30-year-old, you can back into your own number.

First, decide when you want to retire and how much you think you’ll spend each year in retirement. $60k is a commonly used example.

Next, using a retirement calculator, figure out how much you’ll need to save by age X to retire at YY assuming Z% annual growth.

Once you know how much you’ll need to save to retire, you can do a little math to figure out how much you should have saved by any given age.

We created a free Retirement Calculator that can help you do just that.

What to Do If You're Behind on Savings

If You Feel Behind, Focus On…

Trying to panic invest all your savings into the stock market to “catch up” to where you think you should be is a great way to lose money. Take small steps.

Slowly increase your savings rate over time. If you’re not used to saving, going from saving 5% of your income to saving 25% is probably not realistic. Try adding a few percentage points every couple of months.

If you have high interest debt, focus on paying that off as quickly as possible. It can often pay off more to aggressively pay down your debt than save if that debt is costing you more in interest than you’re making in savings.

Make sure you’re contributing enough to get any employer match 100%. If your employer offers a retirement match, that is basically free money and you should take advantage of it.

Remember, 30 is young! You have lots of time to save, and your money can compound for a long time.

Focus on Long-Term Financial Progress

Keep Perspective

It can be motivating to see recommendations for how much you should have saved by certain ages. The problem is, those numbers don’t take into account your unique circumstances. They’re one-size-fits-all recommendations that can cause you unnecessary stress.

Focus on your saving rate over time and your plan for continued consistency moving forward. That is WAY more important than any arbitrary milestone.

Frequently Asked Questions

Is it bad if I have $0 saved at 30?

Not at all. What matters most is that you start saving ASAP.

Should I save for retirement or a house down payment first?

If you have access to an employer match, that comes first. Save for retirement and your down payment at the same time.

Does savings or net worth matter more?

Net worth is always a better measure than savings because it takes debt into account.

How often should I update my savings goals?

Once a year or after any major life event would be a good rule of thumb. You want your number to reflect YOUR life.

Conclusion

“How much should you have saved by age 30?” is a great question to ask yourself because it forces you to pay attention to your savings. There’s no magical number that will apply to everyone’s situation. Save consistently over your lifetime and you’ll be just fine.