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Feb 20, 2018

I’m in My 30s, Am I Behind on my Retirement Savings?

By Lindsay Goldwert
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If you’re in your thirties, you may be wondering how much you should have saved for retirement. And it would be nice if there were a simple way to answer that question.

It all depends on how much money you make, your goals, and when you want to retire.

Who’s saving and who isn’t

It makes sense. People in their thirties who make more money are a lot more likely to have money put aside for retirement than those who make less.

In May 2017, The Federal Reserve published a report entitled, “Report on the Economic Well-Being of U.S. Households in 2016.”  The report notes that one of the most significant variables impacting the amount of retirement savings people have is, unsurprisingly, their annual income.

For people in their thirties who make less than $40,000 per year, 39.4% reported not having any retirement savings at all. By contrast, of those in the same age group who made over $100,000 per year, 95.5% reported having some retirement savings.

How to get started

The United States Department of Labor provides several worksheets to help individuals calculate a retirement savings plan. These worksheets can assist you in deciding how much of your annual income you should be saving for retirement.

The four main variables in the equation

  • Years until retirement,
  • Current annual salary
  • Years in retirement
  • Current savings.

In addition to these four, there are a few factors that you may want to consider when determining how much to save for retirement.

Want to learn more about what you expect to have saved by retirement? Check out our retirement calculator.

Factors You May Want to Consider for Retirement Saving

Whether you’re 35 or 65 or anywhere in between, there are certain questions that should to be considered when trying to figure out what your best options are.

The U.S. government suggests a few important questions to ask with regard to saving for retirement at any age:

  • When do you plan on retiring?
  • Do you have a retirement plan with your employer, such as a 401(k) or pension plan?
  • Will your significant other retire at the same time?
  • Where do you intend on living after you retire?  Will you own your own home or rent?
  • Do you intend on working part-time during retirement?
  • What kind of medical insurance will you have?
  • Do you plan on traveling or pursuing any expensive hobbies?

Steps You Can Take Toward Retirement Right Now

One of the biggest benefits of starting now is that your savings will have longer to grow. This means you can take greater advantage of interest rates and annual returns while having less of a savings burden in the future.

Now that you know a thing or two about how to plan for retirement in your 30s, what can you do? To begin, you can consider opening a Roth IRA if you don’t have one already. According to the Bureau of Labor Statistics, most experts agree that young workers benefit most from owning a Roth IRA or Roth 401(k).

In short, it’s not uncommon for people in their 30s to have little to no retirement savings at all. So, if you’re already saving, you may be ahead of many of your peers. While no easy answer exists to the question of just how much to save, it’s a good general rule to contribute as much of your income as possible to plans that your employer offers a matching contribution to first.

Want to start saving for your retirement?

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Written by

Lindsay Goldwert

Lindsay Goldwert is an author and freelance personal finance writer, as well as the host of Spent podcast


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