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How “Retirement Ready” Should You Be at Age 30?

Are you retirement ready? This is a really good question, but more specifically, how retirement ready should you be at age 30? I am wondering how I stack up against other people and if I am saving enough. The sooner I can get my student loans paid off and start, the better.


So it occurred to me recently that I’m going to turn 30 soon. I’m not depressed about it; in fact, I kind of look forward to an escape from the chaos of my 20s. But it’s still one of those milestones that makes me look at my life and wonder, Am I where I should be? Have I done what I could to prepare for the future?

I’ll be the first to admit that I have NOT made the best decisions in life, especially where money is concerned. I’ve been guilty of thinking of retirement as one of those things I’ll worry about later, something for older people to deal with. It’s not that I didn’t save for retirement – I did, starting with my very first job out of grad school. But that doesn’t mean I did it the way I should have. Let’s review:

  • Employer One: Contributed 6% of my pre-tax income to a 401(k) with a 3% match (the max they offered and you had to contribute the 6% to get it). Rolled it into my 401(k) at Job #2, minus the employer match because I wasn’t vested.
  • Employer Two: Contributed 10% of my pre-tax income to a 401(k) with 3% match. Cashed it out when I left and wasted the money on random crap.
  • Employer Three: Contributed something like 5.3% of my pre-tax income to a state pension plan because I was a state employee and it was required. Also threw a measly $20 a paycheck into a separate 401(k). Cashed all of it out when I left and wasted the money on random crap.
  • Employer Four: No employer match offered on their crappy 403(b). Saved zilch for the first two years, then opened a Roth IRA on my own in my final year there. Saved about $2600.
  • Self-employment (current): Still moving along with the Roth, but I suck and I only saved a little over $1000 this year. At least I haven’t cashed it out, right? *crickets*

Where I Am vs. Where I Should Be

As of right now, the balance in my IRA is a little over $4,000. For someone who is nearly 30 and has had the account for 2 years, that’s pathetic and sad. If I continue my average contribution of $2000 a year until age 70 (assuming a 5% rate of return), I’ll be lucky to live on like $20,000 a year in retirement. Yeah, that’s no fun at all. Forbes says if I’m starting at 30 (which I basically am), I need to save 21.4% of my income to make up for the years I missed. Also no fun, and it’s going to be extremely difficult to do.

According to Investopedia’s guide to retirement planning for 30-somethings, I’m at least taking a positive step by checking my progress, but I know I’m far from where I should be. As the guide mentions, my financial responsibilities will only increase from here on out – it’s not like I’m going to magically find free money as I grow older. So now what?

The Dreaded B-Word

No one likes to budget. It’s time-consuming, it involves math, and a budget forces me to say no when I really want to say yes. However, I’ve learned the hard way that a budget is completely necessary, both for me personally (especially as a single mom) and for my business.

The only way I’m going to catch up from all the years I didn’t save for retirement is by budgeting at least 20% of my income to go to my Roth IRA. Considering the fact that I already take 20% away for taxes, that means I have to live on 60% of my income. Oh, and let’s remember that I’m self-employed with a fluctuating income AND I basically only pay myself enough for the necessities.

I have two choices: I can either pay myself more and put it directly in my IRA, or I can continue throwing in piddly bits of money and exist on cat food when I get old. And when I think of it that way, there really isn’t much choice involved anymore.

Save For Retirement, Kids!

If there’s one thing you can learn from all this, it’s that you should start saving for retirement. Like right now. Don’t depend on Social Security to be there; it might, but isn’t it better to think of it as a bonus instead of relying on it and being disappointed?

Even if you can only save a little, there’s nothing better you can do for your future than put money away. Whether you’re in your 20s or 30s or any other age, it’s imperative that you sit down with your budget, crunch some numbers, and get ready to retire someday. If you’re like me, you’d rather it be sooner than later, but that’s only possible if you plan ahead.


  1. ugh. Since I paid off all of my debt, I have worked toward establishing a 6-month emergency fund and I successfully completed that task. I have two semesters of school left – and I use grants and cash only no more loans so that kind of sucked away any retirement savings. Before I went back to school, I had a job where I contributed about 14% to my 401k, I never withdrew it and it currently sits safely in an IRA. I feel alright about my retirement starter fund, however when I turn 30 (in 2014) that is when I HOPE to be more proactive in retirement savings. Of course, it all depends on if I can find someone to pay me after I graduate.

  2. I don't know if I will every be ready for retirement! I have made some huge financial boo- boo's (cashed out a 401k to pay off debt) and am still recovering from layoffs for both me and my husband. I have recently combined all my previous employer 401ks and 403bs and put them at Vanguard. In January I will start up automatic deductions to my Roth (also at Vanguard) from my checking account. Even though I still have Credit Card Debt, I still want to put some money away for those "Golden Years"!

  3. Canadianbudgetbinder says

    It's never too late and you are right although a budget can be tedious and time consuming it's worth every minute one pours into it. Why? It is like the financial bible of one's money health. It allows one to look back and to plan to move forward with numbers. You are only turning 30 Andrea but you are well on your way simply because you are taking back control. I moved to Canada and I have to start from scratch with my RRSP's and TFSA's where others have been contributing for years. It's depressing but like you I want to plan for my retirement. Mr.CBB 🙂

  4. Thanks for this article! From reading so many different debt blogs within the past few months, I am quickly learning from others mistakes in life so I hopefully don't make the same ones when I am older as well. At least you are starting now and not when you are 40. It would be even worse then!

  5. The biggest problem people have in saving for retirement is continuing to contribute (and to not pull the money out and spend it on random crap) when it seems so far away and it seems so daunting. The secret is to look at where you need to be at 25, 30, 35, and so on and adjust your savings to meet those goals. It is easier to think of having $10,000 at age 30 than having $2 million at age 65. Really, saving between about 20 and 50 is way more important than saving between 50 and 70, but most people don't get serious until they are into their fifties.

  6. Yes! I'm planning to refocus my efforts over the course of the next year so I'm able to better fund my retirement accounts

  7. yeah, saving for retirement is hard, i'm sucking at it big time and no idea how to catch up

  8. plantingourpennies says

    Welcome to the 30 club! I joined a few months back, and so far, so good. =)

    I'll echo what a few others are saying that better to know and start now than put your head in the sand the way so many other people do.

    The only slightly odd thing is that if you're finding yourself unmotivated to save, apparently seeing age-advanced avatars of yourself/your family tend to make people save more. (There was a study done on this not too long back… if you want, I can try and track it down.) But the idea is that if you "see" what your future old self looks like, you are more apt to save so she won't have to eat cat chow.

    Maybe it could be a new marketing arm for you – make everyone 70-yr-old avatars so we save more? =)

  9. Budget & the Beach says

    I'm 42…tell me about it. #completelyfreakedout

  10. Retirement can be a little scary. The retirement savings that you have may not be enough to last a lifetime. It's a great idea to turn your retirement savings into income. However, you should carefully decide what type of investment you would want to venture in.

  11. You may not be where you should be when it comes to your retirement savings but looking at your life overall, you've done some amazing things and done an almost impossible 180 to turn around your life. Something most people only dream of doing. Your achievements alone tells me that by retirement age, you can make it to whatever goal you set even though you started the race late.

  12. Sorry, but I was curious, where are you supposed to be at in terms of retirement savings at 30? I checked the link to the article, but they mentioned changes overall, no general numbers. I'm sure I am very behind as is, but just wondering just how behind I am. I guess I would like to know what amount of money should be saved at this point.

    • The Forbes article I linked to gives percentages based on your starting age. Going off my income starting at age 25 (because that's when the chart starts) and calculating the percentages, I should have over $32,000 saved right now. But of course that will be different for each person depending on what kind of money they make at the listed ages.

      • Really $32000 well now I feel like a huge failure at life! Ugh. I have about $3000 in my 401k which I just started 2yrs ago at my work there was a waiting period and this is my first full time job out of college Ill be 26 next month. However I happen to know several people at my work with no kids that live at home with their parents and havent saved a penny. For being a single Mom of two who sometimes get child support sometimes doesnt I feel Im doing the best I can with what I have. The numbers are still depressing to me tho.

  13. 30? I heard it's the new 21. Sure, you're a few years behind, but that doesn't mean you can't turn it around. Also, I know you're going to jack up the savings rate as you earn more and more money online.

  14. I turned 30 in December and one of my goals this year was to start heavy duty saving for my retirement, something I slacked on doing until….ohhhh…this month. I already had about $10,000 in a mutual fund, so I wasn't completely starting from scratch. With the money I've managed to save so far, I would need to save $500 a month until I'm 65 to retire a millionaire. That's not *so* crazy. Just having "$500!" in my head is enough of a carrot to motivate me!

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