HomePersonal FinanceThe Ideal Amount of Savings at Age 30

The Ideal Amount of Savings at Age 30

I love looking really far down the road. I love projecting account balances in the future, and I love the idea of compounding interest.

I also like making money today – the ability to spend money on the things I want. As well as I have no problem paying a little extra for things if I can afford them. So if a few dollars saved me from worrying, it’s money well spent.

So I thought about, in order to retire comfortably at age 66, I’d need $4 million. Why that much? Because it’s such a huge number, that even with inflation and everything, there’s no way I could ever need more than that. It’s very possible I won’t need that much. But I know that in 40 years if I have $4 million in savings, there’s no way I won’t have enough money for everything I’ll want.

Calculating Retirement Savings

So working backward, with an 8% rate of return, I’d need $250,000 in savings by age 30 to hit those retirement savings. If I earn 8% every year, I’d have $367,000 at age 35, $539,000 at age 40, $1.16 million at age 50, $2.5 million at age 60, and just about $4 million at age 66. The “normal” retirement age will probably increase in the next 40 years, so I’ll still be retiring early at age 66.

$250,000 is not an easy target to hit by 30, but the benefits are enormous.

Retire Early and Enjoy the Benefits

There would be no need to save a dime for the rest of your life. Once retirement is fully funded, there’s no need to have extra retirement savings. As long as you earn as much as you spend, you can spend that money however you want. No more saving 20% for retirement, you can focus on education, the house, travel, or whatever else you’d like.

Instead of saving for huge goals, savings can go toward family vacations, education, and some of life’s pleasures. $250,000 is my goal for 30, and then that extra 20% (or more ideally, 60%) of income that goes to savings can go toward a house or kids.

Readers, what do you think? Is $250,000 a realistic goal? Are the benefits enormous enough to make it worth it?



  1. That’s a pretty lofty goal though it’s hard to argue with the numbers. As many people have lower salaries, student loan debt, and such in their 20’s, many would be hard pressed to reach this target. I would encourage some follow-ups for those who do not feel it’s achievable to hit this mark, so as not to discourage people.

  2. What’s special about age 30? I mean, I’m all for you setting a high but realistic savings goal, but if you have some other priorities come up before age 30 you might want to re-adjust that age. Unless you are putting off other milestones until after age 30?

    For me, $250k in retirement by age 30 is laughably unrealistic. Projecting my current salary, I won’t have even had $250k pass through my hands in those 8 years post-college, much less saved close to that! Of course I do expect that I will be earning more money after I finish my PhD so that will boost my savings in that last year or two of my twenties, but it’s impossible to set a goal for retirement by age 30 (or even 65) since I don’t know what kind of job I’ll have.

  3. Since you’re likely to qualify for Social Security PLUS have a pension plan or stock options (depending on your job), you likely need less than 250K by 30. And, the problem is that you won’t have any money to put down as a deposit to buy a house (20% down at a minimum to get low interest rate). I think your first goal should be to save for the down payment on a house.

  4. I think it’s realistic IF you get started early and have a half-decent paying job. I would love to have that much saved by then… but I don’t think I will even if I double my income.

  5. That’s a lot of money, but I think it’s realistic – think of how much we pump into our housing every year! I don’t think I’ll have even close to that put away when I’m 30 – unless i start making a LOT more money, ha.

  6. On paper that goal seems realistic, but with the way average people spend their money today and live beyond their means it is a rarity to have saved that much by 30. I bet there are a lot of 30 years old still paying off debt.

  7. This post makes me sick to my stomach. I am 30, and I have $12,000 in my retirement fund.

    It seems impossible to catch up.

    • @frugalportland, don’t be discouraged, this guideline is for young people who want that $4 million in the bank at age 65. That’s a lot of money, probably a lot more than most people need. I think setting goals alone is a big part of the process. What are your goals for age 35?

      • @Daniel, thanks for that! By age 35, I’ll have all of my debts paid off, I’ll be maxing out both a traditional and a Roth IRA, and I’ll be asking people like you what to do with the rest! :)

  8. Sounds like a big goal and that’s great! It takes the same amount of energy to dream a big goals as it does to dream a little goal, so go big!

    I’m not sure if you should bank on an 8% return after age 30 tho. I believe the national average for 401(k)’s is 6%. (But I can’t remember the study I learned that from). Plus you’re probably smarter than the average investor too.

    Good luck!

  9. I try not to set goals for my savings as expenses and income fluctuates over time. After college there were periods where I was struggling with debt, hopping from one low paying job to the next and it was hard for me to even consider the future let alone saving such a substantial amount by age 30. Even now with economic stability it’s hard to fathom having 4 million saved in the next thirty years. That’s quite a chunk of money. If we could all get there, it’d be nice but like others have mentioned, 30 is still an age where people are coming into their own financially and a greater percentage of young adults are just getting by.

  10. If it works for you, it’s a great goal. 30 is pretty close for me, and my main goals are to have zero debt and to buy my first property by then.

  11. So what if you bought a house before you were 30 for say 100 000. If you had it paid off by 30 couldn’t you technically include that in your savings? It wouldn’t be cash in hand but its still worth something.

  12. I think a very lofty goal but doable with discipline. I’m currently 30 and have saved 265k thus far. I also happen to be a CFP though but I didn’t start off so great. I came from a humble beginning and didn’t have the money to go to college. I graduated high school in 2001 and decided to work a year to save some cash. During that time frame Sept 11 happened and I soon left on Nov. 4 of 2001 to go to Marine Boot Camp. I was frugal in the Corps and saved a lot during my two years in Iraq (which you really don’t a whole lot). After I got out in 2005 I went to a local Community College, then got my Bachelors in finance at a four year, then my MBA, and then my CFP designation. I’m used to living in subpar conditions so I don’t need a lot to get by but we live pretty nicely. Once you amass savings the money keeps working for you. I still feel poor and want more. I will probably never spend it and we will give it to Charity one day. It has become an obsession to see how much we can save on a monthly basis. Yeah my neighbor has that nice Beamer but I can log in and see thousands at work that is worth more than material possessions.

  13. I also made a goal of $250,000 by 30. Now at 32 years old I have reached the 1/4 million mark. My new goal, while maxing my 401k, I plan on paying off the house by 40. Good luck to everyone on their financial journeys.

  14. Then you die at 60 and never get to use any of your money :)

    Just remember that you don’t get to take it with you. Your most able to do things and have fun while you’re young. As you age traveling can become a burden.

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