The Average 30-Something Has $180,000 in Retirement Savings. But Is That Enough?

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The younger you are, the easier it is to brush off advice about saving and investing for the future. So once you reach your 30s, it's easy to feel like you're behind on retirement savings. But what does that mean? And how much should you have saved by now?

Understanding how your balance compares to those in your age range can be a useful tool here. But ultimately, the answer to "is it enough?" depends on your situation.

Here's what you need to know.

The average 30-something has $180,000 in retirement savings

The average 30-something has $180,164 in a 401(k), according to Empower, a financial services company. But the amount of money you'll need in retirement depends on factors like your lifestyle, healthcare needs, inflation, and expected lifespan. So what's "enough" for one person may miss the mark for someone else.

How to know if you have enough money saved for retirement

One way to figure out if you've saved enough is to look at your savings projection. Let's say that you're 39 and you have $180,000 in a 401(k), and you let that money sit in that account for 26 years with a 7% annual return (which is conservative considering that the S&P 500's average return has been just over 11% over the last 10 years). In this scenario, you'd have just over $1 million by the time you retired.

One common guideline is to aim for 25 times your desired salary in retirement. So this projection would equate to just under $42,000 in spending power per year. But chances are that you aren't planning to stop contributing at this point.

Another useful rule of thumb to understand your retirement savings needs is that you should have about three times your annual salary saved by age 40. So to be on track based on the above example, you'd need to be making no more than $60,000 per year.

If you're earning more than that, you might be behind -- but since we're looking at a 10-year age range, you could still have a reasonable amount of time to hit that target.

How to boost your retirement savings

Whether you're feeling behind, or you just want to make sure your retirement lives up to your expectations, there are a few ways you can bump up your retirement savings without having to necessarily max out your annual contributions. For example, 401(k) contributions are capped at $23,000 per year, as of 2024, which is a high bar for many Americans.

One key step you can take here is to open a Roth IRA. These accounts let you access tax-free withdrawals of your funds in retirement. The trade-off is that the funds you deposit into a Roth IRA don't reduce your taxable income now.

Just be aware that IRAs (including both traditional and Roth IRAs) have an annual contribution limit of $7,000 as of 2024 (or $8,000 if you're age 50 or over). Thinking about upping your retirement savings goals with an IRA? Discover the best IRA providers in our curated list for 2024.

A few other ways to save more for retirement include:

• Accessing your full employer match, if available. This extra free money may not be a lot right now, but it can grow exponentially over time.
• Opening a health savings account (HSA), if you're eligible. This can be used to pay for health costs tax free in (or out of) retirement and can be invested and grow over time. That way, you won't have to use retirement dollars for those costs. Note, however, you can only open an HSA if you have a qualifying high-deductible health insurance plan.
• Raising your contribution each year. The caps on annual contributions are adjusted each year. And if your salary rises over time, it'll be easier to contribute at least a bit more from year to year.

Saving for retirement is a marathon. It takes consistency and dedication to hit the various benchmarks that lead to a comfortable retirement. And if you're behind on that journey, the sooner you start making moves to close the savings gap, the better off you'll be once you're ready to retire.

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