Retirement Savings: This Is The Average Amount Millennials In Their 30s Have Saved — What To Do If Your Balance Is Lower
Written by
Josephine Nesbit
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Ideally, you should start saving for retirement in your 20s when you leave school and begin earning paychecks, but this isn’t always the case. According to Northwestern Mutual’s latest Planning & Progress Study, the average 30-something saver has a total of $67,400 in retirement accounts, The Ascent reported.
If your balance is comparable, then you’re in a pretty good financial position. The stock market has delivered an average annual 10% return before inflation over the past 50 years, The Ascent says. If you’re 37 with just $3,000 in savings and you put in $400 per month into your IRA or 401(k) starting now, you could grow it to $842,000 by the time you retire, assuming a 10% average yearly return. But if you’ve saved $67,000 so far and add $400 monthly over the next 30 years, you could potentially have a balance of almost $2 million.
However, don’t panic if your balance is nowhere near this amount. You still have time to build your nest egg and retire comfortably.
Fidelity Investments recommends saving 15% of your income each year for retirement, including any available employer match, CNBC Make It Reported. But if that seems like too much, you can start smaller and gradually increase your contributions.
Marguerita Cheng, certified financial planner and CEO of Blue Ocean Global Wealth, told CNBC Make It that savers should increase their contributions by 1% each year until they reach the maximum contribution. Or, you can set aside a certain dollar amount from each paycheck. According to the IRS, the annual contribution limit for employees with a 401(k) is $22,500, or $30,000 if you’re 50 or older. The limit for an IRA is $6,500.
“What’s important here is progress, not perfection,” Cheng said. Consistently investing part of your income helps build sustainable wealth over time, she added.
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