Savings by Age: How Much to Save in Your 20s, 30s, 40s & Beyond | Ally (2024)


  • 6 min read

What we'll cover

  • The average savings balance by age group

  • How much you should aim to save by retirement

  • Smart tools and strategies to help boost your savings

No matter what stage of life you're in, one thing will always remain the same: It's never too late — or too early — to save money.

If you're wondering, “How much should I have saved?" now is the time to flip your mindset. Think, “How much could I save?" Read on to see what your savings today can turn into down the road.

  1. Average savings by age

  2. How much money you should have saved at every age

  3. How much to save for retirement

  4. Emergency fund savings

  5. Smart tools and strategies for savers of all ages

Average savings by age

Wondering how your savings stacks up against your peers? According to the Federal Reserve's Board 2022 Survey of Consumer Finances , the average American has $62,410 in savings. When you break that down by age group, it looks like this:

Savings by Age: How Much to Save in Your 20s, 30s, 40s & Beyond | Ally (1)

Read more: Give your savings a boost with Ally Savings Buckets.

How much you should have saved at every age

Fast answer:

  • The amount of money you should save is unique to your lifestyle.

  • You can reach savings goals by creating specific target amounts and dates.

There isn't a one-size-fits-all number. It's important that your savings and goals connect to your lifestyle.

Being specific about savings goals will give you a framework for how much you need and how long it could take you to get there. Smart savings tools like buckets let you easily set goals, organize your savings and keep track of your priorities.

One way to hit your savings goal is to think of it as a portion of your income. The popular 50/30/20 budget framework dictates that 20 percent of your budget should go toward savings and debt repayment, while the 50 percent should go to needs and 30 percent to wants.

Here's what it looks like based on the average salaries of full-time and salaried workers across different age groups:

50/30/20 Monthly Budget

Savings by Age: How Much to Save in Your 20s, 30s, 40s & Beyond | Ally (2)

*Each amount is rounded to the nearest dollar.

How much do you need to save in your 20s?

As you embark on your career, your 20s is the time to set strong savings habits. Using the 50/30/20 model, you could aim to save upward of $500 every month (or as much as you can). Saving where and when you can and being strategic with windfalls (such as a bonus), and dedicating additional income (like an annual raise) can help you work toward this goal.

How much do you need to save in your 30s?

Whether you're starting a family , buying a house or launching a business, savings continues to be essential in your 30s. Saving upward of $800 each month can sound like a daunting task, but consistency is key as you work toward any savings goal.

How much do you need to save in your 40s?

At this phase of your life, you might be thinking about a career change, figuring out college education costs for your kids or have your eye on an early retirement . Saving can help you achieve all these, so aim to save nearly $1,000 or more each month.

How much do you need to save in your 50s?

With retirement on the horizon, saving is more important than ever. Your mindset may be shifting into legacy planning or funding any potential healthcare needs. Putting aside about $1,000 monthly (or hitting that 20% goal) is a great way to ensure that your savings continue to build and fund your goals.

How much to save for retirement

Fast answer:

  • Rule of thumb: Have 1x your annual income saved by age 30, 3x by 40, and so on. See chart below.

  • The sooner you start saving for retirement, the longer you have to take advantage of the power of compound interest.

  • Aim to save 5% to 15% of your income for retirement — or start with a percentage that's manageable for your budget and increase by 1% each year until you reach 15%.

By looking at your retirement savings in 10-year increments and using age-based benchmarks, it's easier to plan financially and put actionable savings steps in place.

One popular age-based savings recommendation for retirement is that you should aim to save the total amount of annual salary by age 30 and increase your savings by your annual salary every five years:

Retirement savings goal by age

Savings by Age: How Much to Save in Your 20s, 30s, 40s & Beyond | Ally (3)

Keep in mind the above is a guide. The amount you should save for retirement will depend on:

  • Your income

  • Your planned retirement age

  • The kind of lifestyle you want to have in retirement

One way to make the most of your retirement savings is to start by investing 5% to 15% of your paychecks in a tax-advantaged retirement account like a Traditional or Roth IRA , or Individual Retirement Account, or a 401(k) until retirement.

The power of compounding interest

Consistent saving and your retirement savings rate can have a big impact on your total return. The following example is based on the U.S. median household annual income of $74,580 in 2022 (according to 2021 U.S. Census Bureau data) and assumes an average annual return of 6%.

Compounded savings based on the age you started:

Savings by Age: How Much to Save in Your 20s, 30s, 40s & Beyond | Ally (4)

Dedicating 5% to 15% of your pre-tax income to retirement isn't always possible. You may be starting a new career, paying back student loans, or have other financial obligations and aren't able to save that much of your salary all at once. Start with a percentage you're comfortable with and increase your savings rate gradually by 1% each year until you reach the 15% mark.

If you're currently paying back loans or other debts, don't panic. Aim to save for retirement while paying off debt simultaneously , putting away what you can while sticking to your loan repayment schedule.

How much to save for emergencies

Fast answer:

  • Instead of using your age as the guide for savings for emergencies, start with your monthly essential expenses.

  • Ideally, an emergency savings account should hold three to six months' worth of essential expenses.

  • To keep your emergency savings accessible, consider a savings account rather than a Certificate of Deposit (CD).

Whether your dog swallows a chew toy and needs a trip to the vet or your car's transmission goes kaput, financial curveballs are unavoidable. And in those moments, an emergency fund can save the day.

Emergency savings goals

The ideal size of your emergency fund will likely fluctuate throughout your life based on your monthly expenses. Rule of thumb? Aim to have three to six months' worth of expenses set aside.

To figure out how much you should have saved for emergencies, simply multiply the amount of money you spend each month on expenses by either three or six months to get your target goal amount. We've mapped out what that would look like based on national averages in the table below.

Emergency fund savings by age

Savings by Age: How Much to Save in Your 20s, 30s, 40s & Beyond | Ally (5)

We know this can feel impossible, especially if you're just starting out. And the national averages shown above may not resonate with your lifestyle. These numbers are just a benchmark, and you don't have to build your savings overnight. Focus on consistently putting away what you can afford.

Tip: Track your spending to see how much you actually need on a monthly basis. Then plug your numbers into our emergency savings account calculator .

Smart tools and strategies for savers of all ages

Fast answer:

  • Organizing tools like buckets let you easily set goals and track your progress.

  • Automating your savings with recurring transfers or direct deposits can help you reach your goals faster.

  • Use budgeting templates to track your spending each month.

Prioritizing goals and staying organized can keep you from stressing over not saving enough for all the things you want to do with your money. When you have a plan for saving for multiple goals , it reduces the chance that something slips through the cracks.

The buckets tool in the Ally Bank Savings Account helps you organize your savings into separate digital categories and set specific goals for each, eliminating the need to open multiple savings accounts to track your progress.

To make your savings go even smoother, consider putting it on autopilot with recurring transfers. This allows you to automatically add money into your respective savings accounts, or by using the Surprise Savings booster in the Ally Bank Savings Account , you can ease some of the stress of reaching your goals.

Finally, remember that when you're saving money, every little bit you don't spend counts. Uncover savings opportunities by finding the budgeting style that works for you and using our easy-to-use budget templates .

You’ve got this

When mapping out your financial future, age can act as a milestone to guide your savings. But you're never too young or too old to save for the goals that matter most to you.

Explore more

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Savings by Age: How Much to Save in Your 20s, 30s, 40s & Beyond | Ally (2024)


Savings by Age: How Much to Save in Your 20s, 30s, 40s & Beyond | Ally? ›

Fast answer: Rule of thumb: Have 1x your annual income saved by age 30, 3x by 40, and so on. See chart below. The sooner you start saving for retirement, the longer you have to take advantage of the power of compound interest.

Is 100k in savings by 40% good? ›

By age 40, you should have saved a little over $185,000 if you're earning an average salary and follow the general guideline that you should have saved about three times your salary by that time.

What is a good amount of savings for a 40 year old? ›

By the time you reach your 40s, you'll want to have around three times your annual salary saved for retirement. By age 50, you'll want to have around six times your salary saved. If you're behind on saving in your 40s and 50s, aim to pay down your debt to free up funds each month.

How much should someone in their 30s have in savings? ›

Breaking this down by age, aim to save at least 1x your income by age 30, 3x by 40, 6x by 50, and 8x by 60. Increase contributions over time: If starting off saving 15% of more of your income isn't possible, small increases over time can make a big difference.

What is the 50 30 20 rule? ›

The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings. The savings category also includes money you will need to realize your future goals.

Is 50k saved at 30 good? ›

By 30, it would be beneficial to have $50,000 saved. This comes from the goal of being able to replace about 70% to 80% of your pre-retirement income in retirement.” While having the equivalent of your annual salary saved up by 30 may seem unattainable, Kovar believes it's achievable if you start saving in your 20s.

How many Americans have 100K in the bank? ›

14% of Americans Have $100,000 Saved for Retirement

Most Americans are not saving enough for retirement. According to the survey, only 14% of Americans have $100,000 or more saved in their retirement accounts. In fact, about 78% of Americans have $50,000 or less saved for retirement.

How much does the average American have in savings? ›

In terms of savings accounts specifically, you'll likely find different estimates from different sources. The average American has $65,100 in savings — excluding retirement assets — according to Northwestern Mutual's 2023 Planning & Progress Study. That's a 5% increase over the $62,000 reported in 2022.

Is saving $1000 a month good? ›

Saving $1,000 per month can be a good sign, as it means you're setting aside money for emergencies and long-term goals. However, if you're ignoring high-interest debt to meet your savings goals, you might want to switch gears and focus on paying off debt first.

How much does the average 40 year old have in the bank? ›

Average Savings by Age 40

Americans at this life stage are reflected in Federal Reserve statistics covering people ages 35 to 44. The Fed's most recent numbers show the average savings for the age group that includes 40-year-olds is $41,540. The median savings is $7,500.

Is 100K in savings good at 30? ›

“By the time you're 40, you should have three times your annual salary saved. Based on the median income for Americans in this age bracket, $100K between 25-30 years old is pretty good; but you would need to increase your savings to reach your age 40 benchmark.”

How many Americans live paycheck to paycheck? ›

A majority, 65%, say they live paycheck to paycheck, according to CNBC and SurveyMonkey's recent Your Money International Financial Security Survey, which polled 498 U.S. adults. That's a slight increase from last year's results, which found that 58% of Americans considered themselves to be living paycheck to paycheck.

Is 40k in savings good? ›

While $40,000 is a good start on the road to building a nest egg, you probably want to retire with a lot more money than that. But it may be more than possible if you commit to saving and investing in a brokerage account consistently for the remainder of your career.

Is $4000 a good savings? ›

Are you approaching 30? How much money do you have saved? According to CNN Money, someone between the ages of 25 and 30, who makes around $40,000 a year, should have at least $4,000 saved.

What is the rule of thumb for savings? ›

At least 20% of your income should go towards savings. Meanwhile, another 50% (maximum) should go toward necessities, while 30% goes toward discretionary items. This is called the 50/30/20 rule of thumb, and it provides a quick and easy way for you to budget your money.

How to budget $4000 a month? ›

How To Budget Using the 50/30/20 Rule
  1. 50% for mandatory expenses = $2,000 (0.50 X 4,000 = $2,000)
  2. 30% for wants and discretionary spending = $1,200 (0.30 X 4,000 = $1,200)
  3. 20% for savings and debt repayment = $800 (0.20 X 4,000 = $800)
Oct 26, 2023

At what age should you have 100K saved? ›

“By the time you hit 33 years old, you should have $100,000 saved somewhere,” he said, urging viewers that they can accomplish this goal. “Save 20 percent of your paycheck and let the market grow at 5% to 7% per year,” O'Leary said in the video.

At what age do people have 100K in savings? ›

Average American savings by age
AgeAverage savings
Ages 35-44$41,540
Ages 45-54$71,130
Ages 55-64$72,520
Ages 65-74$100,250
2 more rows

Is having 100K in savings rich? ›

Having over $100k in savings is generally considered a good financial position in the United States.

Is 100K savings a lot of money? ›

There's no one-size-fits-all number in your bank or investment account that means you've achieved this stability, but $100,000 is a good amount to aim for. For most people, it's not anywhere near enough to retire on, but accumulating that much cash is usually a sign that something's going right with your finances.

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