Building a foundation for retirement in your 30s
Last updated February 18, 2026
Reviewed by
When you cross the threshold into your 30s, you may have a sense of confidence and direction for the kind of life you want to live. After all, you likely learned lessons about hard work and self-sufficiency in your 20s. You may not have all the answers, but you do understand the importance of preparing for the future.
As you begin your 30s, you may have more earning power than before, but you might have more financial responsibilities, too. This may be the time when you’re starting a family, starting a household, and, just as importantly, starting to prepare for your retirement.
According to our research, more than a third of young millennials (29–36-year-olds) feel off track with their retirement savings.1 And Americans say inflation is their number one obstacle to saving for retirement.2
Now is the time to build your long-term savings discipline, but your learning curve doesn’t have to be steep. The key is to know what’s available to you and how to get started today.
Use time to your advantage
When you’re in your 30s, time can be an advantage in saving for your retirement. You have an investment horizon that spans about 35 years depending on your individual situation and retirement goals. Hypothetically, if you save $5,000 per year beginning at the age of 30 (invested at a 5% annual return), you could have nearly $500,000 (after taxes) by the age of 65. So, investing only $175,000 over 35 years might grow to nearly half a million dollars.
If you wait until you’re 40 to begin saving, you may need to save twice that — nearly $10,000 per year — to reach the same end amount. Waiting until the age of 50 means saving over $21,000 per year. Time gives your money the ability to grow, and depending on your situation, you may be able to pursue a more aggressive blend of investments. A longer-term time horizon also enables you to weather the ups and downs of the market with a greater sense of ease.
Savings vehicles you might consider
401(k) plans
If your employer offers a 401(k) retirement savings plan, now may be the time to increase or max out your contributions. Traditional 401(k) contributions are deducted from your paycheck pre-tax, meaning both your contributions and earnings grow tax-deferred, allowing your plan to grow faster over time. Roth 401(k) contributions are deducted from your paycheck post-tax, but you pay no income tax when you take withdrawals after you turn 59½ and have had your account for five years. Your employer may also match a portion of your 401(k) contributions. In 2026, the maximum contribution for those under 50 is $24,500.3 Be aware of any vesting schedules, so you can capture and keep the entire employer-paid match in your account.
For those under 50, the maximum amount you can contribute to a traditional or a Roth IRA in 2026 is $7,500.
Individual retirement accounts (IRAs) and Roth IRAs
Your workplace isn’t the only place to build retirement savings. An individual retirement account (IRA) can be another important component of your retirement savings plan. For those under 50, the maximum amount you can contribute to a traditional or a Roth IRA in 2026 is $7,500.4 Traditional IRA contributions may be tax deductible, depending upon certain income phase outs and whether your spouse is already covered by a retirement savings plan at work. And IRAs allow investment in a wide variety of financial products. You should speak with a tax professional for relevant information regarding income limitations and phase outs.
A Roth IRA is a long-term retirement savings account where you pay taxes on the money you put in instead of the money you take out. Unlike a traditional IRA, withdrawals from a Roth IRA taken after you reach age 59½ and have had your account for five years are not taxed.5 Also, eligibility is limited by income. For example, a single individual who earns more than $150,000 is not eligible to contribute to a Roth IRA. This limit changes based on your income tax filing status and is adjusted semi-regularly.
Annuities
An annuity is a contract between you and an insurance company where you pay a sum of money in exchange for income over a period of time. There are many types of annuities. What people often think of is a single premium immediate annuity (SPIA). This is an annuity where you pay a lump sum upfront for immediate, guaranteed income over an agreed-upon period.6 With a deferred income annuity (DIA), you pay a lump sum upfront for guaranteed income at a time in the future, usually during retirement.7
A fixed annuity is one where the insurance company guarantees a minimum rate of interest and a set amount for payments. You buy the annuity, and key contractual terms are established from the start, so you know the outcome from the beginning. Fixed annuities may appeal to people who want to minimize risk.8 A variable annuity works similarly to a retirement account, as you can use your payment (either an initial lump sum or payments over time) toward various investment options.9 As a result, the value in your annuity may vary with the performance of the investments, as may any payments. Variable annuities have a potentially higher upside, but also higher risk — you can lose money on a variable annuity.
Another annuity type to consider is a registered index-linked annuity or RILA. A RILA is a relatively new type of annuity designed to provide the growth potential of a variable annuity combined with a level of investment risk protection. A RILA lets you define the maximum amount of losses you’re willing to accept by having different levels of protection you can choose for your investment. The less protection you have around your investment, the greater your potential for upside gains tied to your selected market index.10
Protecting your assets
Your 30s are a time when you may start to think about what would happen if something went wrong. You’ve worked hard, and it’s important to protect your retirement savings. Disability insurance is an important provision to have, particularly if your spouse or family depends on your income. While your employer may offer short-term disability coverage, an individual policy can help ensure that coverage is there for as long as you need it. Disability insurance can help you cover your daily expenses while you are unable to work. Because it ensures that you can continue to receive partial income, it can help you avoid tapping into your retirement savings. Additionally, whole life insurance can help take care of your loved ones financially if something should happen to you, as well as be a source of funds in your retirement.11
The FIRE plan
In recent years, a new personal finance concept has caught on called FIRE: Financial Independence, Retire Early.12 Some young professionals embrace the FIRE movement, saving up to 75% of their income by living frugally now so they can retire earlier. The theory goes that the savings, amplified by investing, can quickly accumulate to be enough money to retire by age 40. As an idea, FIRE is intriguing, and saving for the future is always a good idea. But there’s more to it than that. The FIRE method requires a single-minded focus that can be exhausting and may not be realistic for everyone, especially those who care for children or elderly parents.13 You also risk running out of money. To retire early, you need to start with a substantial nest, account for a much longer retirement as life expectancy increases, and plan to pay health care costs yourself, including potential disability, until Medicare kicks in.14 Further, there is an inflation concern that gets skipped over: If your retirement lasts 50 or more years, which it easily could if you retire at 40, your purchasing power could be cut in half — twice — over that time period.
That said, saving is key, even if 50% isn’t attainable. Many financial advisors recommend saving 20% of your income.15 That’s because saving for the future should be a sustainable, lifelong habit. The immediate goal is to have a year’s worth of expenses in your savings account. Once you have this kind of financial cushion in place, you may be in position to weather the unexpected without accruing debt through credit cards or unsecured loans.
Finding the savings
So, what can you do to actually save money to invest in your retirement funds? The simple answer: Cut your expenses. For example, do you really need a 200+ channel cable TV or satellite TV subscription? Create a simple cash flow map that shows how your money comes in and goes out each month. By tracking your spending patterns, you’ll quickly see where small leaks may be adding up. Things like unused subscriptions, impulse purchases, or higher-than-expected utility costs. Effective cash flow management gives you a clearer picture of what you truly need and helps you redirect more dollars toward your retirement goals. Even small adjustments can compound over time to help you earn some extra retirement income.
Whichever way you choose to help build your retirement savings, it’s important to spend the time in your 30s wisely. It’s a great time to create a more structured budget for your household. As your income and expenditures take on regular patterns, you can begin to set your sights on long-term goals. As you advance in your career, remember that each increase in income doesn’t necessarily mean you should increase your lifestyle. Make it a prime opportunity to increase your retirement savings instead.