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A 401(k) can be a great way to save for retirement on a pre-tax basis, while enjoying the added benefit of an employer match. But it can be hard to know if you’re saving enough. You might be wondering, How much should I have in my 401(k) at 30? Generally speaking, it’s a good idea to have at least one year’s salary saved in your 401(k) by the time you turn 30.

Your actual 401(k) balance, however, may be higher or lower depending on when you started saving, how much of your salary you defer into the plan, the amount your employer matches, and the assets you’ve invested in. We’ll break down the average target balance for workers from age 25 to 65, and what to do if you’re not quite hitting that goal.

How Much You Ideally Have Saved for Retirement

It’s never too early to ask, “Am I on track for retirement?” The sooner you do, the more time you’ll have to catch up if you’re falling short. Just know that the answer can be a moving target, depending on a number of variables.

First of all, your retirement savings objective will depend largely on your retirement goals. Someone who wants to retire at 50 is going to need a much larger nest egg by age 30 than someone who plans to wait until age 70 to retire.

Many other factors also come into play. By way of example, let’s calculate the 401(k) savings for one 30-year-old individual. A good rule of thumb is to save 10% to 15% of your income in a workplace retirement plan each year. Following that advice, our hypothetical saver:

•   starts contributing to their plan at age 25.

•   defers 10% of their $60,000 salary annually for five years.

•   benefits from an employer match of 50% of contributions, up to 6% of their salary.

•   earns a 7% annual rate of return investing in mutual funds that contain bonds and stock — a pretty average rate of return on 401(k) investments. Note that the number is a general benchmark. All investments come with risk, and the rate of returns will vary depending on an individual investor’s portfolio.

In this hypothetical scenario, by age 30, our individual would have $46,539 saved in their 401(k). However, keep in mind that this amount can vary based on any number of factors, including a portfolio’s asset allocation and potential market reactions, or brief movements in a stock’s price.

A savings of $46,539 is a great start. However, you can see how their balance might be significantly higher or lower if we changed up one or more details. For instance, by contributing 15% of their pay instead, they’d have $64,439 on their Big 3-0. On the other hand, if they started saving later, earned a lower rate of return, or enjoyed a less generous employer match, their balance could be lower.

Bottom line? How much you should have saved in a 401(k) by age 30 (or any other age) is subjective and varies based on several conditions, including where you’re starting from and how aggressively you’re saving each year.

Recommended: When Can I Retire?

How Much Do You Need to Retire

While you might have heard that you need $1 million or even $2 million to enjoy a comfortable retirement, that’s merely a guideline rather than a set-in-stone number. The amount you’ll need to retire can depend on:

•   How long you plan to continue working

•   When you anticipate taking Social Security benefits

•   Your desired lifestyle in retirement

•   How much you expect to spend on basic living expenses in retirement

•   Whether you have a spouse or partner

•   Whether you anticipate needing long-term care at some point

Assessing your personal retirement goals can help you come up with a realistic number that you should be targeting. It’s also helpful to consider how things like changing health care needs, increases (or cuts) to Social Security and Medicare, and inflation may impact the dollar amount you need to save and invest to avoid falling short in retirement.

Recommended: Does Net Worth Include Home Equity?

Average and Median 401(k) Balance by Age

Each year, Vanguard’s “How America Saves” report analyzes data from nearly 5 million of its retirement plans, including account balances, automatic enrolment, participation and deferral rates, hardship withdrawals, and loan issuances.

Below are findings from its 2024 report. Looking at the average savings by age can give you some idea of whether you’re on track. But keep in mind that your progress and savings will depend on your investments and specific goals.

Using a chart like this can make it easier to see where you are on the savings spectrum. So if you’re wondering “how much should I have saved by 40?,” for example, you can see at a glance that the average 40-something has close to $100,000 in retirement savings.

Remember that average numbers reflect outlier highs and lows, while the median represents where people in the middle of the pack land. Between them, median can be a more accurate or reliable number to measure yourself against.

Recommended: Is My 401(k) Enough for Retirement?

Tips to Save for Retirement

Enrolling in your 401(k) is one of the easiest ways to begin building retirement savings. Your employer may have enrolled you automatically when you were hired. If you’re not sure, contact your HR department. You can also check your default contribution rate to see how much you’re contributing to the plan.

It’s a good idea to contribute at least enough to get the full company match if one is offered. Otherwise, you’re leaving free money on the table.

If you’re worried you’re not saving enough, consider supplementing your 401(k) with an Individual Retirement Account (IRA).

An IRA is another tax-advantaged retirement plan. You can open a traditional IRA, which offers the benefit of tax-deductible contributions, or a Roth IRA. With a Roth IRA, you can’t deduct contributions, but qualified withdrawals are 100% tax-free.

Not sure how to start a retirement fund? You can likely do it through an online brokerage. You can create an account, choose which type of IRA you want to open, and set up automatic contributions to start saving.

Of course, retirement planning starts with getting to know your spending habits and budget. If you’re not using a budget app yet, consider a money tracker.

How Much Should You Contribute to Your 401(k) Per Year

The amount you should contribute to your 401(k) each year should reflect your retirement savings goal, how many years you have to save, and your expected annual rate of return.

When deciding how much to contribute, first consider your budget and how much of your income you can commit to your 401(k). Next, look at the amount you need to contribute to get the full company match. You can then plug those numbers, along with your salary, into a 401(k) calculator to get an idea of how likely you are to hit your retirement savings goal.

For instance, you might figure out that you need to contribute 15% of your pay each year. But if you’re not making a lot yet, you might only be able to afford contributing 8% each year. So what do you do then? A simple solution is to increase your contribution amount each year and work your way up to the 15% threshold gradually.

Example of Impact of Compounding Returns on Retirement

Does it matter when you start saving for retirement? Yes, and in a big way, thanks to the concept of compounding returns. Compound returns are the returns you earn on both the initial principal you invested as well as the previous returns you earned on that principal. The earlier you can start investing in a 401(k) or other retirement plan, the more time your money has to potentially compound and grow.

In fact, one effective way to build wealth in your 30s is to continue contributing to your retirement plan and choose an asset allocation that fits with your risk tolerance and risk capacity. Risk tolerance is the amount of risk you’re comfortable with and risk capacity is the amount of risk you may need to take to achieve your investment goals without jeopardizing your financial wellbeing. In general, the younger you are, the more time you have to recover from market downturns, so you might opt to be a little more aggressive with your investments. But if your capacity for risk is low, you may want to invest more conservatively.

For example, let’s say a 25-year-old who makes $60,000 a year starts contributing $500 a month and invests entirely in S&P index funds. By the time they’re 65, their nest egg will be worth more than $1.25 million, assuming annual compounding and a 7% average annual return on their investments. (Note that this number doesn’t account for any fees, taxes, or market movements and that the percentage is based on an inflation-adjusted return and this percentage can be even lower based on time in the market.)

Now, assume that same person waits until age 35 to start saving. By age 65, they’d have just $591,838 saved. Note that this number doesn’t account for any fees, taxes, or market movements and that the percentage is based on an inflation-adjusted return and this percentage can be even lower based on time in the market. That’s still a decent chunk of money, but it’s far less than they would have had if they’d gotten an earlier start. This example illustrates how powerful compounding returns can be when determining how much you’ll end up with in retirement.

Don’t Panic If You’re Behind on Saving

Having a lot of money in your 401(k) by age 30 is great, but don’t feel bad if you’re not where you need to be. Instead of fretting over what you haven’t saved, focus on what you can do next to increase your savings efforts.

That can mean:

•   Increasing your 401(k) contribution rate

•   Opening an IRA to go along with your 401(k)

•   Choosing low-cost investments to minimize fees

•   Investing through a taxable brokerage account

What if you have no money to invest? In that case, you might need to go back to basics. Getting on a budget, for example, can help you rein in overspending and find the extra money that you need to save. A free budget app is a simple and effective way to keep tabs on spending and saving.

The Takeaway

How much you should have in your 401(k) at 30 isn’t a simple number that applies to everyone. Your savings goal depends on a number of factors, such as your anticipated retirement age, when you started saving, your rate of return, and so on. A good rule of thumb is to invest 10% to 15% of your salary in a tax-advantaged retirement plan. From there, compounding returns may help your holdings multiply over a longer period of time, though there are no guarantees. The bottom line: Try to save and invest as much as you comfortably can.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

FAQ

What is the average 401(k) balance for a 35-year-old?

The average 401(k) balance for a 35-year-old is $91,281, according to Vanguard’s How America Saves report. Average 401(k) balances are typically higher than median 401(k) balances across all age groups, as they reflect higher and lower outliers.

How much will a 401(k) grow in 20 years on average?

The amount that a 401(k) will grow over a 20-year period can depend on how much someone contributes to the plan annually, how much of that contribution their employer matches, what assets they invest in, and their average rate of return. Someone who saves consistently, increases their contribution rate annually, and chooses investments that perform well will likely see more growth than someone who saves only the bare minimum or hands back a chunk of their returns in 401(k) fees.

What is a good 401(k) balance at age 30?

A good 401(k) balance by age 30 is at least one year’s worth of salary. So if you make $75,000 a year you’d ideally want to have $75,000 in your retirement account. Whether that number is realistic for you can depend on how much you earn, when you started saving in your 401(k), and your rate of return.

Photo credit: iStock/Burak Kavakci

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Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SORL-Q324-046

Series EE bonds, or Patriot Bonds, were initiated in 1980 as a low-risk way for Americans to save. The money invested is guaranteed to double in 20 years.

They build upon the tradition of Series E bonds, or war bonds, which were introduced by the federal government in 1941. Learn more about this savings vehicle here.

What Is a Series EE Bond?

A series EE bond is a U.S. Treasury bond. It’s considered to be a very safe investment, as it’s backed by the U.S. government. It is guaranteed to double in value in 20 years, even if the government has to add funds to it to meet that mark.

To provide some context, here’s a quick look at what bonds are and how bonds work. A bond is a debt instrument. Bonds are issued by corporations or governments in order to raise capital. The bond market is huge — much larger than the equity markets. (In 2023, the market cap of the global bond market was about $133 trillion, versus $111 trillion for the stock market.) Investors provide capital to companies and governments when they buy the bonds, effectively loaning their money to that institution.

Meanwhile, the bond issuer agrees to pay investors the capital back, along with interest, after a certain period.

There are different kinds of bonds investors can purchase, including municipal, corporate, high-yield bonds, and U.S. Treasuries. A savings bond is a type of U.S. Treasury bond, issued with the full faith and credit of the U.S. government, meaning there’s virtually no chance of losing money. Savings bonds allow the government to borrow money for various purposes while giving investors a reliable and predictable stream of interest income.

Series E bonds, which were created in 1941 to help fund the WWII effort, were replaced in 1980 with Series EE bonds, or Patriot Bonds.

💡 Quick Tip: An online bank account with SoFi can help your money earn more — up to 4.00% APY, with no minimum balance required.

How Do Series EE Bonds Work?

If you’re interested in buying bonds, here are details on how a Series EE bond works:

•   Series EE bonds are electronic and can only be purchased and managed online with a TreasuryDirect account. They are available in any denomination starting at $25, up to $10,000 per person named on the bond, per calendar year.

•   These bonds are guaranteed to double in value in 20 years, even if the government needs to kick in extra cash. You can hold the bond for up to 10 additional years to continue to earn interest.

•   When you purchase a Series EE bond, the interest rate will be stated. Through October 31, 2024, the interest rate is 2.70%.

•   Interest is earned monthly, compounding semi-annually, for up to 30 years, unless you cash it sooner.

•   Series EE bonds can be cashed in (or redeemed) after 12 months, but early withdrawal can trigger a penalty of partial interest loss.

•   Electronic Series EE bonds can be cashed in via the TreasuryDirect site.

•   Interest earned on Series EE bonds is taxable at the federal level. Federal estate, gift, and excise taxes, as well as state estate or inheritance taxes, may also apply. If the money is used for qualified education expenses, however, you may not be subject to taxes.

•   The TreasuryDirect site also makes 1099-INT statements of interest earnings available annually.

Recommended: Understanding the Yield to Maturity (YTM) Formula

Understanding Series E Bonds

The popularity of Series E bonds may have hinged largely on the patriotic call to purchase them as part of the war effort. Buying bonds served two purposes: It helped the government to raise money for the war and it also helped to keep inflation at bay as shortages threatened to push consumer prices up. Apart from that, there were other qualities that might have made a Series E saving bond attractive.

These bonds were issued at 75% of their face value and returned 2.9% interest, compounded semiannually if held to 10-year maturity. So investors were able to earn a decent rate of return on their investment.

Series E bonds were also affordable, with initial denominations ranging from $25 to $1,000. Larger denominations of $5,000 and $10,000 were added later, along with two smaller memorial denominations of $75 and $200 to commemorate the deaths of President Kennedy and President Roosevelt, respectively.

Series E bonds were redeemable at any time after two months following the date of issue. Bond purchasers could redeem them for the full face value, along with any interest earned.

Interest from Series E bonds was taxable at the federal level but exempt from state and local taxes, adding to their appeal. And because they were issued by the federal government, they were considered a safe investment.

Recommended: Understanding the Yield to Maturity (YTM) Formula

Series EE Bond Maturity Rate

The maturity rate for EE bonds depends on when they were first issued.

Here’s a table showing the maturity dates for Series EE bonds over time:

Are Series EE Bonds Right for Me?

Series EE bonds can be a convenient, low-risk way to help your money grow over time. Plus, many people like the idea of investing in America and having their investment backed by the U.S. government. However, the rate of return may not be optimal, and the bonds are typically held for quite a long time versus a short-term investment.

Here are two popular alternatives you might consider to grow your money:

Savings Accounts

A savings account is a deposit account that’s designed to hold the money you don’t plan to spend right away. You can find various types of savings accounts at traditional banks, credit unions, and online banks. Savings accounts can pay interest, though not all at the same rate.

High-yield savings accounts at online banks, for example, tend to pay much higher rates than basic savings accounts at brick-and-mortar banks. Currently, they may offer around 4.60% APY (annual percentage yield) versus 0.58% for savings accounts.

Stocks

If you’re unclear about how stocks work, they effectively represent an ownership share in a company. When you buy shares of stock, you’re buying an ownership stake in a publicly traded company. The way you make money with stock investing is by buying low and selling high. In other words, you want to purchase stocks at one price then sell them for a higher price.

Stock trading can be a more powerful way to build wealth over time versus keeping money in a savings account or buying bonds. But there’s a tradeoff since stocks tend to be much riskier than bonds or savings accounts. Buying shares of mutual funds or exchange-traded funds (ETFs), which hold a collection of different stocks as well as bonds, is one strategy for managing that risk.

Recommended: Bonds vs. CDs: What’s Smart for Your Money?

Banking With SoFi

Series EE savings bonds can be a safe way to earn a steady rate of return. However, they aren’t the only way to grow your money.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

When should I cash in EE savings bonds?

Series EE savings bonds are optimally held for 20 years, at which point the money invested will have doubled. If you’d like to keep earning interest, you may hold the bonds for up to an additional 10 years.

How long does it take for a Series EE savings bond to mature?

Series EE savings bonds mature in 20 years. At the end of that period, the initial investment’s value will have doubled. You may hold them an additional 10 years and continue to earn interest, if you like.

Do Series EE savings bonds double after 20 years? 30 years?

Series EE savings bonds double after 20 years. If you don’t redeem them, you may continue to earn interest on them for another 10 years, for a total of 30 years.

Photo credit: iStock/loveguli

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SoFi members with direct deposit activity can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.00% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 12/3/24. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.