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Is It Too Late to Start Saving for Retirement at 30?

For the majority of my adult life, the concept of saving up for a comfortable retirement has been continuously drilled into my head.

In my 20s, it was something I heard but ignored. After all, there were too many concerts, bar tabs, and trips that I needed to pay for!

Do you have enough in your 401k to retire when you want?

As I approached my 30s, I got married and soon became a father. At that point, something clicked in my brain that reminded me of all of the financially intelligent things I was supposed to do.

Evidently, this isn’t just me, it’s science. According to a study published in the New York Times, new fathers’ brains actually change to focus more on “goal orientation, planning, and problem-solving.”

All of a sudden, I was more concerned with how much we had in our retirement accounts instead of if we had concert tickets to my favorite band coming into town.

The Best Day to Start Investing Was Yesterday

Slowly but surely, I brought my wife on board to this “semi-urgent” need to start paying attention to our finances more. It’s a good thing for me that we were both earning a solid income together. This way, we could still have a happy and fun life together and save for tomorrow.

At the time our daughter was born, we had around $20,000 in retirement savings combined. At 30 years old, we were well behind the average 401k balance of a typical Personal Capital user.

As the saying goes, “the best day to start investing was yesterday and the second-best day is today.” Knowing our retirement balances were a bit behind and investing with time on your side surely helps, we got to work right away.

How does your retirement savings stack up? Do a quick check with this free calculator.


Time to Create My Own Pension

My father was blessed to live in the era of the pension. He worked hard for the same company for decades, and they helped him by funding his comfortable retirement. Sounds like a good trade.

Unfortunately, that wasn’t (and still isn’t) the case for us. It was on us to create our own pension. One that would allow us to choose whether or not we wanted to work after turning 60 years old.

With 30 years to go, our first route for this retirement investing plan was to utilize our workplace 401k options and to take full advantage of the company match. This “free money” option was an easy way to get the retirement snowball rolling.

We invested for our retirement further by using a Roth IRA for both of us. This tax-advantaged vehicle allowed us to invest our after-tax money and have it grow tax-free.

Read More: Can I Contribute To A 401k And An IRA?

By automating these investments, we were able to put our investing on autopilot — and let time and compounding support our long-term retirement plans.

The Job Gets Done with the Right Resources

After creating an automated process for our retirement investments, we were feeling good with our progress thus far. It was fun to track that progress and see if we were on track for a comfortable retirement.

Personal Capital’s Retirement Planner makes this check-in process easy. We have all of our financial accounts synched up to the free tool, and it can run different models to show us how we’re doing. It even factors in potential social security payments as well.

Another free resource that I loved using was my local library. I had a desire to understand the best way to invest for our family’s needs and the library served up dozens of helpful books. I learned the importance of dollar-cost averaging, understanding investment fees, and how time in the market beats timing the market.

Compound Interest is the Eighth Wonder of the World

We’ve been fortunate to be employed, healthy, and happy over the past 10 years. This situation has allowed us to invest consistently for our retirement and let compound interest do its magic.

It’s amazing when your money starts to make money … over and over again.

Here is a quick summary of our retirement balances year-over-year:

2011: $17,000
2012: $20,000
2013: $42,000
2014: $64,000
2015: $99,000
2016: $121,000
2017: $167,000
2018: $232,000
2019: $253,000
2020: $327,000
2021: $420,000

With 20 more years to go, we’re looking a lot better.

Compound interest combined with time and consistent contributions has helped our retirement prospects look stellar. Perhaps we’ll get that pension after all!

In theory, if we didn’t add another dime to our retirement, we would have around $1.6 million at 60 years old. With a 4% withdrawal rate, that would leave us with around $64,000 annually. Since we spend between $60,000 and $70,000 per year right now comfortably, we’ll continue to contribute to our retirement to ensure we’re more than set.

Focus More on Today

At times during the last decade, we were saving and investing up to 50% of our income. This helped us make some major improvements in our retirement plans.

For the next couple of decades, we’re going to shoot for closer to a 15% savings rate. That way, we can enjoy more of today.

After the year we’ve just had, we are reminded of how precious life is both now and later.

With that in mind, we’re making some decisions around our careers, our time with our children, and our future that give us a good balance of both.

With the shift in savings, here are some of the new areas we’re focusing on with our annual income:

Last year, I also made a career change that has given me more time with my family and more options with my time in general.

Having control over my money is definitely important, but having control over my time is even more important.

Get Started With Your Retirement Planner

Personal Capital compensates Andy Hill for providing the content contained in this blog post. Andy Hill is a paid content contributor and not a client of PCAC and does not make any endorsements or recommendations about securities offerings or investment strategy.

The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

Any reference to the advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital. Personal Capital Advisors Corporation is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC.

Andy Hill is a husband and father of two kids. His personal finance goal? To give his family the best life possible and strengthen their family tree for generations to come. In 2016, he launched Marriage, Kids, & Money, a blog and podcast about young family finance. In 2020, he and his wife achieved a personal goal of becoming millionaires in less than 10 years. Now, they thrive on helping others do the same.
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