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Savings Tips for Every Life Stage: 30-40s

A man lounges on a pier overlooking a lake at sunset

By the time Americans turn 35 years old, many have gotten married, purchased a home, and are earning a minimum salary of $50,000. Yet, there may still be a lot of big decisions ahead: switching careers, having a child, and starting to save for that child’s college education. MarketWatch published this article about how your finances should look in your 30s about how your finances should look in your 30s.

According to Pew Research Center, a surprising one in three Americans have less than $5,000 saved for retirement. By the time you reach 30, it’s time to really go beyond basic budgeting and savings and get serious about what you put aside.

Here are a few areas of consideration as you look at your savings and retirement in your 30s and 40s, and how to go about them.

  • Employer 401K Contributions
  • Multiple Retirement Accounts
  • Investment Accounts
  • Rainy Day Fund

Increase your 401(k) Contributions

It’s time to look at your 401(k) contributions when you reach your 30s and determine whether you can maximize this retirement vehicle. Many employers now provide varying match levels of 3% or more. If your company has a match program, consider participation, even if it means cutting out small expenses. Given this is a tax-free way for you to save, even skipping that daily cappuccino might help provide you with more room for retirement. The government raised the maximum contribution to $19,000 in 2019, up from $18,500 in 2018. Many employer plans provide multiple investment options for you to choose from, with some companies offering advisory services as well.

Open More than One Retirement Account

In addition to a 401K, you should look into opening your own IRA account which now has an annual contribution level of $6,000.00. If you establish a direct deposit monthly starting at the beginning of the year, you’re looking at $500 per month to reach the $6,000 level. Keep in mind, $6,000 is the maximum you can contribute to an IRA so, determine what’s comfortable for you given your budget and fixed expenses.

Start an Investment Account

There are so many investment options, with a variety of online providers offering services from Certified Financial Planners to help you be intentional about your savings and set goals. Members Financial Services, a Service Credit Union partner, offers in-person financial planning assistance for people who like having that face-to-face time. If you want to self-direct your investments, there are several that offer online investment options. If investing seems like a foreign concept, start small. You can start investing now with as little as $50 a month. Investment companies make it simple to start online at very low minimums.

Get Going on a Rainy Day Fund

Everyone needs a rainy day fund, and there’s no better time than now to get going on setting aside funds for unexpected expenses. While there’s no perfect formula or amount to have saved, ideally you should have anywhere from three to six months’ salary saved in an interest-bearing account that allows you to withdraw in case you need to access the funds.

Retirement and savings may still feel like a distant event in your 30s and 40s, but taking advantage of what’s realistic for you will help you establish savings habits for a lifetime. Given the resources and services available today, retirement and savings can be simplified and accessible.

Statements in this article are for general information and are not meant to be specific investment advice. This information does not consider the specific investment objectives or financial situations or needs of any individual or organization that may read this. This post is not sponsored or sanctioned by the companies mentioned. Service Credit Union does not endorse investing in or with any specific company.