6 Best Ways to Save for Retirement in Your 30s

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Are you starting to save for retirement in your 30s?

This decade of your life can be one of the most fruitful when it comes to building a nest egg for the future. You may finally be earning some real money after your 20s, but not yet be saddled with a mortgage or family obligations.

How to Save for Retirement in Your 30s

Here on Team Clark, we’re ready to guide you every step of the way as you start or continue on your personal road to retirement! But in the end, it all comes back to you.

“When you get right down to it, you are the only who can provide for your retirement — particularly if you’re under 40,” money expert Clark Howard says. “So you can either start saving money now or face the fact that you may not get to retire. Not retiring is not the worst thing in the world; after all, retirement itself is a relatively new concept in human history.”

Maybe you’re in your 30s and haven’t started saving for retirement yet. Don’t worry, time can still be on your side if you get started today. You could easily have 30+ years before you need to live off your retirement savings. That gives your money plenty of time to grow!

Table of Contents

  1. Start With a Budget
  2. Put Your Investments on Auto-Pilot
  3. Use Your Bonuses to Pay Down Debt or Invest
  4. Establish a Rainy Day Fund
  5. Lower Your Student Loan Balances
  6. Pick Up a Side Hustle

1. Develop a Budget

When you’re just starting to make good money for the first time, it’s easy to get into a splurge mentality. After all, there will always be another paycheck in a week or two to help pay your credit card minimums, right?

But living like that is a surefire way to not have enough money to save for retirement. The solution is to have a budget in place. That you way you can make sure you’re meeting your retirement goals while also building a little splurge money into the equation — because you don’t want this personal finance stuff to totally cramp your lifestyle, right?

There are two main approaches to budgeting that we’ve found work best here on Team Clark:

The CLARK method is our own approach to budgeting using a free worksheet, while the envelope method is a classic approach that your grandparents probably used. But both can go a long way toward helping you identify and seal up any leaks in your financial ship.

2. Put Your Investments on Auto-Pilot

Once you’ve freed up some money in your budget, you can get started investing and saving for retirement. The easiest way to do this is probably at your workplace.

401(k) vs. Roth 401(k)

Most employers offer some kind of retirement plan like a 401(k) or maybe even a Roth 401(k). Wondering about the difference between a 401(k) and a Roth 401(k) — and which one is right for you?


We’ve got a full answer to that question that you’ll definitely want to read!

For now, suffice to say that 401(k) contributions are pre-tax and Roth 401(k) contributions are post-tax. Want to lower your taxable income today? Then a 401(k) may be right for you. More concerned with having tax-free income in retirement? You may opt to do a Roth 401(k).

It’s easy to automate contributions to either investment. Just talk to your human resources department for guidance. Then you can have money taken out of each paycheck and saved for retirement before you ever see it.

Once you’re contributing at a steady pace, Clark has a key rule: Bump your contribution rate up by just 1% every six months.

Assuming you start from zero, you’ll be saving 10% of your pay before any employer match after just five years of those 1% bumps.

“But by doing it just 1% at time, you won’t notice the difference in your paycheck because it’s all little baby steps,” Clark says.

Target date funds

Clark says most people are best served by keeping their investment strategy simple. When it comes to choosing investments for your 401(k) or Roth 401(k), there’s nothing easier than a target date fund. They’re the ultimate in “set it and forget it” investing.

The basic idea of a target date fund is that you pick a fund that’s closest in year to when you expect to retire. If you’re in your 30s today, that could mean a 2050, 2055 or 2060 fund. Then you put your money in and for one low fee, the fund’s manager automatically adjusts your asset allocation as the years go by.

Asset allocation is just a fancy way of saying (in this case) how many stocks you have vs. how many bonds you have. When you’re younger, you’ll be more heavily in stock-type choices to let your money grow. As you age, you’ll progressively have more bonds added to your portfolio for capital preservation.

Again, the beautiful thing with target date funds is that all of this adjustment is handled by the fund manager. You just have to contribute the money and they’ll decide how to invest it based on your time horizon until retirement.

Want more info? We’ve got an in-depth explanation of how target date funds work here.


Do a Roth IRA outside of work

If you have extra money to invest after fully funding your 401(k) or Roth 401(k), you’ll probably want to do a Roth IRA.

A Roth IRA is a tax-free account that’s available to most people. We’ve got a complete explanation of how the Roth IRA works — including how to determine your eligibility and how to open an account online — here.

3. Use Your Bonuses to Pay Down Debt or Invest

If you have credit card, auto or student loan debt, it’s most likely holding you back from saving more for retirement in your 30s. That’s why any bonuses you get should be used to first pay down debt and then to invest when your debt load is more manageable.

What you don’t want to do is completely blow your bonuses or other money that just falls into your lap. As you make more money, try to avoid spending more in tandem. Instead, use extra funds to pay down your debt or build your investments.

Some people in their 30s may find themselves coming into an inheritance or other windfall. If that’s the case for you, consider following Clark’s 90/10 rule.

“What I like you to do is take 10% of the money and spend it however you want. Have a blast,” the money expert says. “[But] for the other 90%, you be as conservative as you can be — [putting it into] a savings account or CD — and leave it alone so it’s there for your future.”

Read more of Clark’s thoughts on how to deal with an unexpected windfall in our article ‘What Should I Do if I Come Into a Lump Sum of Money?

4. Establish a Rainy Day Fund

Speaking of saving money in a saving account or CD, it’s always wise to keep money stashed away in an account where it can easily be tapped in case of an emergency. Clark typically recommends you have three to six months of living expenses tucked away.

The money you stash away could be in your Roth IRA (see tip #2), but there is one caveat to this approach. Since the money will be invested in the stock market, it could fluctuate from a little to a lot on a daily basis. That means your account balance may shrink in the short term.

A better idea might be to keep some emergency liquid cash at a high-yield online savings account. The balance will never go down and it’s pretty easy to earn 2% APY on your money right now. Check out our list of the Best Online Banks: Free Checking and High-Interest Savings Accounts.

5. Lower Your Student Loan Balances

Chances are your 30s could be the decade of your life when you really feel the bite of student loan debt. In fact, a new study from Experian shows 35-year-olds have an average of more than $42,000 in outstanding debt from those loans.


That kind of back-breaking student loan debt can really put a freeze on your plan to save for retirement in your 30s. But you have options to lower your monthly payment on federal student loans courtesy of a variety of repayment programs:

  • Income-contingent repayment
  • Income-based repayment
  • Pay-as-you-earn repayment
  • Revised pay-as-you-earn repayment

These repayment programs only apply to federal student loans. If you have private student loans, you may be able to refinance them at a lower interest rate through a company like SoFi.com.

6. Pick Up a Side Hustle

If you really want to save more for retirement, you can start by cutting your budget to the bone. But sometimes what you really need is more income. That’s where picking up a side hustle comes in.

Chances are you’re already working full-time, so a traditional work-at-home job may require more time than you have to spare. What you need are short-term money-making opportunities. To that end, we’ve put together a series on making extra money in a condensed time period:

Finally, if you find your side hustle really takes off, you may want to stash some extra retirement cash in a SEP IRA. That’s yet another kind of retirement account outside of work like the Roth IRA.

Final thought

For most people, you’re just starting to get on the road to retirement in your 30s and time is on your side. Your money will have more than three decades to grow before you need to tap it in retirement. That’s the good news.

But you won’t necessarily be able to reach retirement if you don’t put a plan in place. Remember, the goal is to live on less than you make and invest the extra for retirement.

If you’ve got more questions about saving for retirement in your 30s, try giving our Consumer Action Center a call.

We have a FREE help line open Monday-Thursday from 10 a.m. – 7 p.m and Friday from 10 a.m. – 4 p.m. EST with volunteers available to answer YOUR concerns! Call Team Clark @ 404-892-8227.

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