5 Tips for Investing in Your 30s

Don't get discouraged if you didn't build savings in your 20s. You can make immense progress toward your investing goals in your 30s.
Alieza Durana
Arielle O'Shea
By Arielle O'Shea and  Alieza Durana 

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Student debt, multiple recessions, climate change and a global pandemic have left younger generations to contend with their share of challenges. According to the U.S. Census Bureau, while Boomers are more likely to access retirement accounts than Millennials, ownership gaps persist, particularly by gender, race and ethnicity


So yes, you’re probably too old to start training for the Olympics. But you’re in good company and definitely not too old to reap the benefits of investing. Getting started now gives you plenty of reasonable paths to build a healthy $1 million nest egg by retirement.

Here are five steps to help you achieve that goal.

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1. Start with your 401(k)

If you have access to a 401(k), 403b or other employer-sponsored retirement option, you might want to consider starting there — that’s where many people save for retirement. (If you can’t access an account like this, skip to step #2.)

There are many reasons why, but we’ll hit just the high points:

  • A 401(k) has a high annual contribution limit of $22,500 in 2023 ($30,000 for those age 50 or older).

  • Contributions get swept into the account directly from your paycheck — before taxes — like magic.

  • Many plans, particularly at large companies, offer access to inexpensive R share classes of mutual funds. (The "R" stands for retirement, but it could also stand for "reduced price.")

  • Perhaps best of all, many employers will match your contributions, at least up to a cap. That’s free money you won’t find through most other offerings.

The payoff: Let’s pretend you make $50,000 and begin saving at age 30. Assuming 2% annual salary increases and a 6% average annual return, saving 10% each year and collecting a 3% match will net you a little over $1 million by age 67. You can do the math for your own situation with our 401(k) calculator.

Once you’re capturing that full 401(k) match, you should take a second look at your 401(k)’s investment options. Yes, they’re often inexpensive, but not always — and some plans tack on administrative fees. If your plan is too costly, you’re better off directing additional contributions this year to the second-best place for your retirement savings: an individual retirement account, such as a Roth IRA.

2. Add a Roth IRA to the mix

Whether you are starting your investment journey, don’t have a 401(k), or want to supplement your savings and investments, a Roth IRA offers many investment options.

As noted above, with a 401(k), your contributions go in pretax, which means they’re taxed when you withdraw them in retirement. With a Roth IRA, your contributions go in after tax, which means no tax in retirement. Your money also grows tax-free in a Roth IRA. (If you'd prefer to make pre-tax contributions, you can select a traditional IRA, which gives you a tax deduction now but requires you pay taxes on distributions in retirement.)

This kind of tax diversification is why combining a 401(k) with a Roth IRA is a good idea if you can also meet the income eligibility rules for a Roth. (Of note: Some companies are offering a Roth version of the 401(k) that — again, if your plan fees are low — can be the best of both worlds.)

The downside is that IRAs have a lower annual contribution limit of $7,000 in 2024 ($8,000 if age 50 or older). If you max that out, go back to your 401(k) until you hit its contribution limit or otherwise max out your budget for savings.

The payoff: Consistently saving $6,500 in your Roth IRA each year won’t land you $1 million if you begin at age 30 — at a 6% return for 37 years, you’ll end up with about $876,877 at age 67. But remember, we called this a supplement — and that’s $876,877 you can draw on tax-free in retirement.

3. Take as much risk as you can stomach

Risk is one reason there’s such emphasis on investing when you’re young. Young people have a long time horizon before retirement, which means they can worry less about short-term volatility. That allows them to accept risks that should lead to higher average returns over the long term.

But with 30 or so years before retirement, you, too, are young. This enables you to take on investment risk, deploying most of your long-term savings — 70% to 80%, at this age — in stocks and stock mutual funds. Here's how to buy an individual stock.

The payoff: Risk doesn’t guarantee higher average returns, but it makes them more likely over the life of a long-term investment. Let’s say you played it safe in your 401(k) and earned an average annual return of 4% instead of the 6% we used in the earlier example. That would trim your $1 million down to about $552,307.

4. Seek inexpensive diversification

Investing becomes less risky if your investments are diversified, so you should not dump all your available cash in the latest IPO.

One trick to diversification is using index and exchange-traded funds. Funds like these track an index: A Standard & Poor’s 500 fund, for example, tracks the S&P 500. That index includes around 500 of the biggest companies in the U.S.; the index fund pools your money with other investors to buy shares of those stocks.

The fund's performance, then, virtually mirrors the performance of the index — less the fees you pay for the convenience of the fund. Aim to pick funds with fees less than 0.50%. In some cases, you can get that number down to 0.10%.

The wide assortment of stocks in index funds makes you somewhat diversified. To diversify further, you can combine several funds — one that gives you exposure to international stocks, and one or two that invest in small and medium U.S. companies. Because bond prices tend to move in the opposite direction of stock prices, you can also buy bond funds to further balance the risk of those stock funds.

If all of that sounds too hard to manage, you can pay someone to do it for you. A robo-advisor, which uses a computer algorithm to build and manage your portfolio for a small annual fee, is a good choice at this stage. See NerdWallet’s list of the best robo-advisors for more on this option.

The payoff: This benefit comes in ways both monetary and not. Your overall portfolio return may or may not improve, but it should be less volatile, which means you’ll get more sleep than had you bet your retirement on one individual stock. You may gain additional peace of mind from knowing a smart computer is watching over your investments.

5. Take off the retirement blinders

Retirement is often treated as the only goal. However, building generational wealth, education for yourself or a family member, vacations, a gender-affirming surgery or a down payment for a home are all goals that may come up before you retire.

The trick is to prioritize these goals. Retirement should come first, but you can divert money into these other goals by saving more when you get a raise, stashing away windfalls and taking advantage of changing expenses. Let’s say you pay off your car or student loans. Instead of kicking your restaurant spending up a couple of notches, put those payments into a savings account, open a brokerage account (here's how) or fund a 529 college savings plan instead. Learn more about how to prioritize your financial goals here.

The payoff: If you invest $200 a month at a 6% return from when your child is born until they turn 18, you’ll end up with about $77,858 — and, with any luck, a kid with a college degree. (You might want to boost that savings rate, though, if your son or daughter aspires to the Ivy League.)

Frequently asked questions

It’s normal to juggle credit card, student, mortgage, auto or other types of debt by your 30s. 2023 was a difficult year for many, and NerdWallet’s 2023 American Household Credit Card Debt Study revealed that incomes aren’t keeping pace with costs. As a result, overall debt loads increased, and credit card debt is up 14% compared to 2022.

Paying off debt may be an important financial priority for you. But that doesn’t mean you can’t also save and invest alongside your debt-reduction goal. Growing your emergency fund, even by as little as $500, for instance, can help build your financial resilience. That way if any unexpected expenses come along, they don’t wipe out your progress in reducing your debt.

You may wonder how much to dedicate to debt payments versus savings and investments. Two important factors to consider are the type of debt you have and how much interest you’re paying. Since the Fed raised interest rates, the cost of credit card debt has gone up. So if, for instance, you have credit card, payday or other debt charging you upwards of 15% percent, your best investment is to prioritize paying off that toxic debt first.

The best investment approach for your 401(k) will depend on your situation and the available choices in your 401(k). Review the NerdWallet article on how to invest in your 401(k) to learn how to make the right picks for you. We also have a guide to Investing 101 with all the information you need to know.

Our complete Roth IRA guide contains a wide range of articles and tools, including pages dedicated to investing within your IRA and calculating the potential value of your Roth IRA contributions.

Many investors appreciate the comfort and guidance that come from a financial advisor. But, advisory services come at a price, so making the call depends on how much you value personalized financial advice. If you want portfolio management but are turned off by advisor costs, a robo-advisor — a computer-powered algorithm that selects your investments based on your goals — may be a viable option.

Individual stocks can offer strong gains, but they can also be risky. Review the NerdWallet guide on how to invest in stocks to learn how to get started with a minimum of risk. We also offer suggestions for the best brokers for stock trading.

There are many factors to consider here, including your income, desired retirement age, monthly expenses, health status, future Social Security benefit levels and countless others. Our retirement calculator can help you understand if you are saving enough to meet your retirement needs and develop a plan to help maximize your savings.

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