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How Much Should Be In My 401(k) At 30?

How much should I contribute to my 401(k)? How much should I have invested for retirement at 30, 40, 50, etc? These are good questions. Here, I try to answer them, but I should warn you:

Personal finance is PERSONAL!

The more you can contribute to your 401(k) and the sooner you can start, the better. But everybody’s situation is different. Don’t beat yourself up if you feel “behind” in the retirement game…remember, you can’t change yesterday but you can TAKE ACTION today and change tomorrow.

So while we’ll get to how much you should have in your 401(k) at 30, 40, 50, etc…let’s start with the more important question:


How much should I contribute to MY 401(k)?

The answer? As much as you comfortably (and legally) can!

  • In 2014, the maximum 401(k) contribution allowed by the IRS is $17,500. (Savers 50 and older can make an additional $5,500 catch-up contribution.)
  • In 2015, the 401(k) contribution limit goes up to $18,000 plus an extra $6,000 if you’re over 50.

Okay, done laughing? If the idea of contributing $18,000 a year doesn’t make you laugh, well, great! The rest of us need to find a contribution amount that’s going to accelerate our retirement savings but not cause us to start bouncing checks or going into debt.

The first questions to ask are:

  • Does your employer match contributions?
  • If so, up to what percentage?

Many employers will kick in a little extra towards your retirement plan. (A common scenario is they’ll match half of what you contribute up to a maximum of 6 percent of your salary). If this is the case, then you want to AT LEAST contribute the maximum amount they’ll match. If you don’t, it’s like turning down part of your salary. If your boss handed you a $500 bonus check would you say “no, thanks”? Of course not! So don’t pass up employer 401k matching, either!

Beyond that, here are some guidelines:

How much should be in your 401(k) at 30? Recommended 401(k) contributions

Make retirement contributions as aggressively as you comfortably can. Hit Level 1, then step up only after you’ve paid off high interest credit card debt and saved $5-10k for emergencies. Balance 401(k) contributions made with pre-tax dollars with a Roth IRA, which will provide income that’s tax-free at retirement.


How much should I have in My 401k At 30?

Just how much should you have saved for retirement before your thirtieth birthday?

Assuming you have been working since you were 22 or 23, at 30, a great target is to have a 401(k) or IRA equal to about one year’s salary.

For example, if you make $40,000 a year, you could try to have $40,000 saved for retirement. (And if you did save $40,000 before turning 30 and never added another dime, you could have as much as $600k by age 65 with an eight percent annual return).

That said, don’t freak out if your retirement saving isn’t on this level yet. The sooner you start, the better. But if you start at 30 and don’t plan on retiring until you’re 65, that still gives your money plenty of time to earn interest.

No two investors are alike, especially beginning investors. Your starting salary range and the number of years you have been working are going to be much bigger factors in determining your retirement savings balance at 30 than they should be at 40 or 50 when you will have had additional years to make catch-up contributions or adjust your portfolio as necessary.



There are a couple of good reasons some twentysomethings don’t start putting away for retirement immediately:

  • You’re in grad school
  • You’re battling big debts

If you’re a student, it’s unlikely you’ll have extra money to tuck away for retirement. And that’s okay, because your education will hopefully improve your lifelong earning potential.

If you’ve got high-interest credit card debt, your top priority should be to pay that down. Debt interest rates could crush even the best retirement account returns, so it’s best to use extra funds to dispatch credit card balances quickly. The one exception? If your employer matches 401(k) contributions. In this case, contribute the maximum percentage your employer will match, then increase retirement savings after your debt is gone.



What does it take to save your annual salary in a retirement account before you turn 30?

Let’s assume you start work at 22, can immediately contribute to a 401(k), and that your employer will match 50 percent of your contributions up to a maximum of 6 percent of your salary. Assuming an eight percent average return and annual raises of three percent, you’ll need to contribute 10 percent of your salary every year to reach this goal.

22 $30,000 $2,700
23 $30,900 $5,697
24 $31,827 $9,017
25 $32,781 $12,688
26 $33,765 $16,742
27 $34,778 $21,212
28 $35,821 $26,133
29 $36,896 $31,544
30 $38,003 $37,488



Today many twenty-somethings will work several jobs before turning 30. If this is you, it means your income will fluctuate considerably. Ambitious? It is also possible that your salary could as much as double between the time you start working and 30. In these cases, set an absolute 401(k) savings goal for the time you turn 30 rather than using your annual earnings as a guide. (Also, be sure to consider the impact of vesting schedules on employer-matched retirement funds).

Rollover 401(k)s into IRAs when you leave jobs and stay on top of your investments. Keep them simple, like index funds and target-date funds, but make sure they’re aggressive. Finally, consider opening a Roth IRA and contributing as much as you can (up to the $5,000 limit) to supplement your 401(k). Unlike your 401(k), contributions to a Roth IRA are made with post-tax dollars, but once you retire the withdrawals are tax-free.


How should I save for retirement?

My rule of thumb is that your contributions should be just large enough to feel uncomfortable. Think about what you could contribute. If you say, “I wouldn’t miss another $100 a month,” then consider going higher until you say “that might get a little tight.” Pull back five or 10 percent from that discomfort zone, and invest away!

Whether you’re looking for general financial guidance, assistance with a specific financial goal, or looking to create a comprehensive financial plan, USC Credit Union is here to empower you to own your financial future. Sometimes you need a helping hand, and we’re honored to provide that for you.

With a combined total of over 30 years of financial services experience, our CFS Financial Advisors provide individualized service and look forward to working directly with you to achieve your financial goals  

Services include:

  • Reviewing Your Current Financial Plan
  • Retirement Planning
  • IRA, 401(k), 403(b), 457 plans, and TSP Rollovers
  • Tax Efficient Investments
  • Retirement Income Strategies
  • Education Funding
  • Life and Long-Term Care Insurance

To find out more about our Investment Services, click here!


Weliver, David. "How Much Should Be In Your 401(k) At 30?" Money Under 30. Money Under 30, 21 Sept. 2014. Web. 30 Oct. 2014.

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