Personal Finance

If you're 30 years old and haven't started saving for retirement - this how you get on the right track

Kristin Hitchcock

Published: November 25, 2024 1:07 pm

24/7 Wall St. Key Takeaways:

• Even if you have no retirement savings, your 30s is prime time to start building a solid retirement fund. Time is still on your side. 
• Creating a disciplined savings plan and investing wisely can help you reach your retirement goals, even if you’re technically starting late. 
• Also: Take this quiz to see if you’re on track to retire ^(Sponsored)

Once you reach your 30s, retirement starts looming more clearly in the distance. If you haven’t started saving yet, it can feel very daunting to get started. But don’t panic! It’s absolutely not too late to make a plan and get back on the right track. Even small savings decisions today can have big impacts later on. 

According to a recent survey by JP Morgan, the savings rate required to retire comfortably depends heavily on your current household income. Whether you’re earning $50,000 or $150,000 annually, there’s a clear path forward if you know how much to save and where to start.

Understand How Much You Need to Save

The first step in getting back on track is knowing the exact savings rate to set you up for success. For those in their 30s, especially with zero retirement savings, the savings rates required vary based on your household income.

Here’s a table of what you should save, assuming you’re 30 and have no retirement savings, based on your income:

Just a few years can make a huge difference when you’re young. So, it’s important to get started now. If you wait until you’re 35, your savings rate will likely increase by several percentage points. 

Higher earners require a more aggressive savings rate because they typically have higher expenses. Saving at a higher rate is essential if they want to maintain their current lifestyle. 

Prioritize Savings and Adjust Your Budget

Now that you know how much you need to save, how do you save it? Incorporating your monthly savings into your budget is important, but it may mean cutting back elsewhere. Here are some tips to help you:

• Cut unnecessary expenses: Let’s be completely honest. Most of us spend money on things we don’t need! Review your monthly expenses and identify areas to cut back, like dining out, subscriptions, or impulse purchases. You can use these savings to help you meet your retirement goal.
• Automate your savings: Set up automatic transfers into a retirement account (like a 401(k) or IRA). These automatic payments help ensure that your cash gets where it is supposed to go. 
• Maximize employer contributions: If your employer offers a retirement plan with a match, take full advantage of it. This is essentially free money that can significantly boost your savings. This money absolutely counts towards your savings goal.

Invest for Growth

What you do with your saved money is as important as investing it. The earlier you start investing, the more time your money has to grow. Even if you can only invest a small percentage of your income now, that will add up to a lot decades down the road if you invest it properly. 

We generally recommend a 60/40 diversified portfolio of stocks and bonds pre-retirement. This stock portion has the potential to offer higher returns, while the bonds provide some stability. Once you retire, it’s common to shift to a more conservative 40/60 portfolio, with more bonds to provide a steady income stream.

However, it’s best to speak to a financial advisor for personalized suggestions, though. This is just my advice, not financial advice. 

Start Today, Not Tomorrow

Even if you’re starting at 30 with no retirement savings, you still have time on your side. You have several decades before retirement age, which means that your money has lots of time to grow. The earlier you start saving, the more you’ll be able to take advantage of the power of compound interest. 

Begin saving now, even if it isn’t as the percentages we recommend above.