What Amount Should You Have in Your 401(k) By 30?

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When people are just starting out in their professions, saving for a comfortable retirement can seem like an endless process without a clear end goal.

Retirement is still a long way off, and essential issues such as work earnings, investment returns, and post-retirement living expenses appear distant.

401(k)s are popular retirement savings vehicles. These plans provide tax benefits and investment flexibility. Payroll deductions fund these schemes.

One rule of thumb is that by the age of 30, people should have around a year's income saved up in a 401(k) or other retirement account. 

Real-world averages can help determine how much a 30-year-old should have saved. In 2021, the average 25-to-34-year-old had $33,272 in 401(k) (k). Median balance was $13,265.

According to one generally used benchmark, by the age of 30, you should have saved roughly the same amount as your annual pay.

The average 25-to-34-year-old American earned $49,960 in 2021, according to the BLS. The average 30-year-old should have around $50,000 in a 401(k) (k).

Retirement advisors advocate saving equal percentages of annual earnings, yet account balances vary widely. Planners advocate saving 10% to 15% of pay for retirement.

However, plans like 401(k)s and other tax-advantaged retirement vehicles are not meant to take the place of emergency or short-term savings.

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