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How to Retire at 30: Step-by-Step Plan


For many Americans, the prospect of retiring at or near 30 is a thrilling idea. Although it is possible to do, it takes a monumental amount of work and planning to accomplish. According to a 2021 PWC report and data from the U.S. Federal Reserve, one-fourth of U.S. adults have no savings for retirement. That drastically increases in the 18- to 29-year-old age category to 42%. Additionally, the median retirement account balance for those under 35 with savings is $12,300. As you might imagine, that’s not nearly enough to retire on. So if you want to retire in your 30s, it’s time to get moving.

Consider working with a financial advisor on retirement planning.

Make a Clear Plan for the Future and Follow It

The first step is developing an honest estimate of how much you will need. That process entails thinking about your estimated longevity, your preferred lifestyle and getting as specific an estimate as possible for how large your nest egg needs to be.


People are living longer. The current average lifespan of an American woman is 81.4 years and 76.3 years for the American male, according to the Center for Disease Control and Prevention (CDC). In other words, women and men waiting until age 65 to retire only have to save enough for an average of 16.4 years and 11.3 years, respectively. But a woman retiring at 30 needs to stretch her savings for more than half a century – an average of 51.4 years. A man who retires at the same age needs to draw out his retirement fund for nearly as long, 46.3 years.


Next, figure out the lifestyle you would like to enjoy for that half century. Would you, for example, after age 30 want pursue the same hobbies and passions you do now? Do you intend to or want to be able to travel, buy the latest electronics or take classes – or all of the above? What kind of insurance protection will you want and what kind of mortgage or rent do you want to be able to afford. The lifestyle you picture will decide how much money you need to save up.

Actual numbers

Now it’s time to put pencil to paper: Citizens Bank and Fidelity suggest saving a total of 10 to 12 times your annual income by the time you retire. So, if you earn $100,000 per year, you should have $1 million to $1.2 million set aside. But your goal number may depend on your withdrawal rate.

To figure that, divide your yearly retirement spending with your target withdrawal rate. In other words, if you expect to spend $40,000 after taxes annually and you’re okay with a 2% withdrawal rate, you’d need $2 million ($40,000/.02) to retire. Of course, the number you come up with will need to be adjusted annually for inflation.

It’s a good idea to create both pre-retirement and post-retirement budgets. The budget before retirement will be key to reaching your savings goal, while the budget after retirement will help you stay on the straight and narrow you’ve set for yourself. Split your budgets into needs versus wants. For example, groceries are a necessity. Building an emergency fund may also be a need rather than a want. In comparison, entertainment, like streaming services or vacations, is a want.

Cut Your Expenses

Retire at 30

Unless you just won the lotto or are an investing genius, you’ll have to cut costs to get your expenses within the range necessary to accumulate your target savings amount. Here are some ways you can cut your expenses to expedite your savings journey:

Start with debt: Look for ways to cut or eliminate altogether your interest and principal payments. Start by eliminating the highest-interest debt you have.

Live within your means: Think about living with roommates or switching to public transportation. Reassess how much clothing you need and maybe dial back your desire for a fashion-forward wardrobe.

Find the cheapest way to meet your needs: Many people turn to the Affordable Care Act’s (ACA) marketplace to buy coverage. But you also have the option of private health insurance, which may make more sense depending on your needs. Food co-ops may also be way to cut grocery expenses.

Maximize Your Savings

The above steps will help you top up your savings. But there are other things you can try as well to maximize the amount waiting for you in retirement. They include:

  • Take advantage of your employer’s matching 401(k) contributions
  • Max out your own 401(k) contributions
  • Use high-interest savings accounts, like CDs and money market accounts
  • Take advantage of cash back opportunities
  • Automate your savings
  • Try to get a raise while you still work
  • Reduce your taxable income by using credits and deductions
  • Regularly increase your savings rate
  • Get a second job and save every dollar you get from that job

Boost Your Income

Think of your average 9-to-5 job that provides earned income. The IRS calls this type of work “material participation,” and it includes any operation you engage with on a “regular, continuous and substantial basis.”  There are several criteria that determine whether a project or job counts toward material participation, like working over 500 hours. But you want to shift away from this in retirement. That leaves you with passive income-generating options.

Make sure the fixed-income portion of your portfolio is adequate, both in terms of appropriate asset allocation and in terms of actual income generated. Some examples of passive income-generating assets include:

  • Annuity plans
  • Dividends from securities
  • P2P lending
  • Rental properties

Even certain side hustles qualify as passive income, like self-publishing an e-book.

Bottom Line

Retire at 30

Many workers are turning to financial freedom movements like FIRE (Financial Independence, Retire Early). Through it, they see a future they’re in control of – not the money they need to earn. But even if you are happy to work through your 30s or even 40s, the above steps can give you a head start toward a financially secure future. Things like maximizing your savings and paying down debt will help you achieve your goals no matter your retirement age.

Retirement Tips

  • Retirement planning on a traditional timeline is hard enough. Trying to get there early may throw additional hurdles your way. Talking to a financial advisor can help you work through those challenges. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • A big part of retirement planning is finding the right numbers. You need to know how much you should save to keep yourself afloat. Retirement calculators and Social Security calculators make it easier to estimate how much money you’ll need in retirement.

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