How Much Money Should I Have Saved In My 30’s for Retirement?

Lately I have been getting this question once a week. It may be because I am well into my 30’s and most of the people I am around are as well. There is no magic answer, everyone’s situation is a different however lets narrow down the sample size a little bit. Most of the people asking this question are in the growth part of their careers. Many have homes (maybe their forever home, maybe not), kids (maybe their done or maybe more on the way). Their experiencing significant income growth along with significant expense growth. And they’re all asking me this question for the same reason, they want validation that they are on track to retire in 20-30 years.

Statistically my answer could be 3/4ths of you are probably not saving enough. But I tend to answer this question with a few other questions.
Do you have a budget?

Do you have a spending plan?

Do you have a savings/investment plan? Does that plan address both deferred qualified accounts (401k, IRA, 529 plans, etc) and non qualified/taxable accounts (brokerage, alternative investments, savings, etc.)

If they answer No, then I tell them they need to have these things in place and offer my services or a lot of times other people services who do the same thing as me but don’t have a personal relationship with them.
If the answer is Yes, then I ask if they are sticking to the plans. Generally the answer is no or I think so or I don’t know. Sometimes it’s yes.
And when they say yes, I say yes, you are doing the right things now to retire in 20-30 years!!

See there is virtually no amount of money a 30 year old has that I can honestly say you will or won’t be able to retire between 60-70. I can make an educate guess through research and technology but its just a guess. The timeline is too long and there are too many unknowns.

However I can say that if you’ve created a budget, you look at, update and review that budget annually. You’ve created a spending plan, you know what your spending money on, you enjoy spending that money (don’t feel guilty if it’s in the plan) and you rarely or never spend more then what was planned. And you are growing assets over time through investments in employer provided plans, alternative assets, brokerage, savings and 529 plans you are on the right track. If you continue to do these things as your career (and most likely income) continue to grow you will be in the right place when your 50’s and 60’s come around.

These are general statements and may not apply to your individual situation. You should always consult your CPA, Investment Advisor or other professional to see how this relates to you.