Here’s how much money you should have saved by age 30

In your 20s, you’re focused on establishing a career post-college, perhaps moving to a new city and renting your first apartment. Because you are just starting to enter the work force, it’s natural that these years aren’t your most lucrative.

But even then, building some type of savings for the long term should be a main priority. While retirement seems like a far away thought, the truth is that the earlier you start putting money toward your future, the more time it has to grow.

In fact, retirement-plan provider Fidelity Investments says that to retire by age 67, you should have saved 1 times your income — or the equivalent of your annual salary — by the time you turn 30 years old. This means that if you earn $40,508 per year (the average yearly earnings of a 20- to 34-year-old according to Q2 2020 data from the Bureau of Labor Statistics), you should have $40,508 saved by your 30th birthday.

This five-figure sum might seem like a lot, but remember it’s not just counting just cash stashed away in a savings account. Fidelity’s savings guidelines also count the money you have in a retirement account, like a 401(k) or Roth IRA, company matches and your investments in index funds or through robo-advisers.

How to get started saving

If you read this and feel behind, don’t let it discourage you. You certainly are not alone if you haven’t saved your annual salary by age 30. According to a 2019 TD Ameritrade survey, 66% of millennials (ages 23 to 38) said they need to catch up on their retirement savings.

The bright side is that, no matter how little cash you have to store away, any bit helps and you don’t need much to get started. Some of the best high-yield savings accounts even allow new account holders to sign up with no minimum deposits or balance requirements in order to start earning interest.

Consider an account that offers a yield greater than the national average savings rate (currently 0.05%) and comes with zero monthly fees.

The Varo Savings Account gives all savers a steady 0.81% annual percentage yield (APY) with the option to earn up to 2.80% APY if they meet certain monthly requirements. This mobile/online savings account also offers ATM cards for easy withdrawals if users sign up for a Varo checking account.

For a slightly higher return on your money without having to meet specific thresholds, right now the Vio Bank High Yield Online Savings Account is a good option. Just note that you have to make a deposit of $100 to open an account and you’ll want to opt for paperless statements so you get out of paying the $5 monthly fee.