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Saving Money at Every Age: Creating a Path to Retirement
Wealth Building

May 8, 2023

Phase 4: Scale the Structure

Saving Money at Every Age: Creating a Path to Retirement

3 min read

by:
Anthony O'neal
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Saving Money at Every Age: Creating a Path to Retirement

Today, millions of retirement-age adults say they wish they'd saved and invested more for retirement. Meanwhile, only about 24% feel confident about retiring early. 

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Listen y’all, I want you to be fully prepared for whatever comes your way when you save money, whether that’s buying a house by 30, paying for your kids' college by 50, or retiring by 60. That's why I'm going to share with you the best ways to save money and how much money I think you should have saved at every age, from your 20s to retirement. 

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Disclaimer: These are just suggested values, so don’t feel bad if you’re in your 30s or 40s and don’t have as much money saved. Something saved, is better than nothing. But, I think this is good to aim for and something most people can do! Use this as your guide post to financial freedom.

The fail-proof method to save money

Before we get into how much money to have saved, I want to tell you about the best way to save money. This is a game-changer for your finances. 

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1. Know your goals.

How much money will you need in the future to live the way you want to? When would you like to retire? Use a retirement calculator to figure out how much money you need to save. You'll need to answer these questions before crunching the numbers to create a retirement plan. 

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2. Begin early and save money regularly.

Your most valuable asset is the time you have right now. The longer your money can be invested and compounded for future growth, the better. That's why you shouldn't put off saving. It is especially true for retirement funds or other types of invested savings.

Starting early also means learning about your finances and developing good long-term habits. 

3. Automate as much as you can.

Saving money becomes easier when you don't have to remember to do it. Using an automated saving method is one of the most efficient ways to save money. There are two approaches to this:

• Request that your employer direct deposit a portion of your pay into a savings account.

• Establish a recurring transfer from your checking to your savings account.

The same logic applies to retirement contributions. Those fortunate to work for companies that offer a 401(k) plan can automate their retirement savings.

4. Prioritize investing your money.

If you want to make a long-term investment, a savings account may not be the ideal choice. But once you've built your emergency fund and are out of debt, it's best to start making investments.

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Before you invest your hard-earned money, here are a few things you may want to consider:

• Your financial risk tolerance.

• The reason for investing your money.

• Your timeline. When do you want to start withdrawing from your investment account?

I always recommend investing in a retirement account that’s invested in quality mutual funds before other investments. 

How much money to save in your 20s

In your 20s, you'll probably have your first job and student loans. Your starting salary is probably too low to save money for retirement but getting into the habit is essential. 

At this stage, I want you to have at least a $1,000 starter emergency fund.

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It would be best if you keep your emergency fund liquid, which means it will be available to withdraw at any time you wish. To maximize your savings, look into a high-yield savings account or money market account where you'll earn more interest than a traditional savings account.

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Besides saving money, I also want you to pay off your debts using the debt snowball method.

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The debt snowball method is a debt-reduction strategy where you pay off the debt in descending order, gaining momentum while knocking out every remaining amount. When you have paid the smallest debt in full, the minimum payment is rolled into the next-smallest debt payment. 

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The method works like this:

  • Step 1: Regardless of interest rate, list your debts from smallest to largest.
  • Step 2: Pay the minimum on all your debts except the smallest ones.
  • Step 3: Pay off your smallest debt as much as possible.
  • Step 4: Continue to pay the next smallest until all debts are paid in full.

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Once your debts are paid off, I want you to save money to cover three to six months of your monthly expenses for emergencies.

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Keep that money in separate savings accounts. The objective is to have enough cash to cover any unexpected expenses that could throw you off of your wealth-building journey.

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Saving money after graduation may appear difficult, but the most important thing is to start saving and to begin small. You can consider taking on a side hustle, gig, or a second job to supplement your savings.

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As you gain work experience and advance in your career, you can increase your contributions to your emergency fund and retirement account.

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How much money to save in your 30s

In your 30s, you will be more established. You'll have work experience (and a few raises), and if you started in your 20s, you’ll hopefully be debt free. That’s why at this age, I recommend you maintain having six months of expenses emergency fund. You may even consider saving one year of expenses, but your financial situation will determine how much you can save.

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By now, you should also be investing in your retirement account. Compound interest will allow your savings to grow faster.

Invest the full 15% of your income in an IRA or 401K. Investing 15% of your income in an IRA or 401K leaves you with enough wiggle room in your budget to put money into other things, such as making extra mortgage payments on your home if you bought a house! Here are some steps to successfully invest in a 401K or IRA!

Invest in your 401(k) up to the match (k).

The best place to begin investing is through your company's retirement plan, particularly if it offers a company match. It's even better if your employer provides a Roth 401(k) or Roth 403(b). If you like the investment options in your workplace plan, you can put all your money there. If your only retirement plan is a traditional 401(k), 403(b), or Thrift Savings Plan (TSP), proceed to the next step.

Fully fund a Roth IRA.

A Roth option allows you to contribute after-tax dollars. That means your money grows tax free, and you don't have to pay taxes when you withdraw it in retirement. Talk about making investing simple! So, once you've invested up to the match with your workplace plan, it's time to fully fund a Roth IRA.

Return to your workplace retirement plan until you reach 15%.

If you haven't met your 15% goal, return to your traditional 401(k), 403(b), or TSP and keep increasing your contribution until you do. 

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Whether you invest through your employer's plan or an IRA, you must set up your account for automatic withdrawals, preferably as a percentage of your salary rather than a fixed amount. That way, your money will go directly from your paycheck to your retirement account, and you won't be tempted to skip investing and spend it elsewhere.

Start saving towards buying a house if you haven't already.

Buying a house is a huge accomplishment that will motivate you to acquire more assets. After all, if you managed to buy one, consider buying houses to rent or put up on Airbnb. This will help you to increase your income streams and put money towards your retirement fund.

How much money to save in your 40s

The forties are prime earning years. There's a good chance you're married by now with kids, or maybe you were married and are single again. Whichever way, I want you to stay on track for retirement. Try to have three times your expenses saved in addition to your three- to six-month emergency fund and maintaining a debt-free lifestyle.

Here are some key things to do in your 40s:

Max out your retirement account.

Contributing or depositing the maximum amount allowed to an individual retirement account (IRA) or a defined contribution plan, e.g., a 401(k), is known as maxing out a retirement account contribution (k). If you belong in this age bracket, you have an allowed contribution of up to $19,500 to a 401(k) in 2021 and $20,500 in 2022.  

If you own your home, look to pay it off early.

Early mortgage repayment can save you a lot of money in the long run. Even a small additional monthly payment can help you own your home sooner. You prioritize peace of mind when you pay off a mortgage. It can relieve stress and increase retirement flexibility.

Save for your kids' college in a 529 ESA.

A 529 college plan is one of the best ways to save money for your kids’ future college expenses while limiting your tax liability. Start saving for their future as well as your own.

How much money to save in your 50s

Your 50s are prime earning years, but life is also probably expensive. I want you to continue prioritizing your savings at this age. At 50, you're probably watching the kids go to or are preparing for college. At this point, you’re also probably planning to retire in the next 10-15 years. Key things to do at this age are:

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Continue saving and maxing out your kids' education accounts.

Keep contributing to your retirement account, holding your kid's education savings.

Continue maxing out your investment account.

You won't get a tax break right away if you put money in an investment account. Because your contributions are not tax-deductible, you may be tempted to spend them elsewhere. However, if you can afford to max out your Roth IRA, deferring the gratification of tax-free withdrawals in retirement may be one of your wisest financial decisions.

Try to have seven times your expenses in a savings account. By now, you've been saving for 30 years and have had some raises.


When you reach the age of 50, you become eligible for increased annual contribution limits in tax-advantaged retirement accounts. Take advantage of these increased thresholds if falling behind on your goals. Have about seven times your current annual salary in retirement savings by age 55, spread across all your savings and retirement accounts.

How much money to save in your 60s 

Take stock of how much is in your nest egg, and get excited! Now is the time you've been working so hard for—retirement. By now, you should:

Have 10 to 12x your salary saved and invested.

Before you retire, make sure you're contributing as much as possible to your retirement account. By age 67, you should have accumulated 10 to 12 times your annual salary in retirement savings.

Start withdrawing from your retirement account and accepting social security.

You can receive social security retirement benefits as soon as you turn 62. However, you will be entitled to full benefits once you reach full retirement age.

If you're not quite ready for this stage, keep contributing if you're still working.

Continue to contribute to your retirement account. Your benefit amount will increase if you delay taking your benefits from full retirement age up to age 70.

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Final Thoughts

Whatever stage of life you're at, I want you to know that now is the best time to start saving money for your financial future. It is important to begin early and live below your means. Doing so will help you save money which you can invest later.

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The numbers I have shared in this post are only recommendations. If you're at a certain age and haven't reached the target yet, don't stress yourself out. Continue at your own timetable, but make sure you start off with smart money management! Good luck!

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ABOUT THE AUTHOR
Full name

Anthony O'Neal is a bestselling author, speaker and personal finance educator. He teaches families how to get out of debt and build real wealth on any income through The Escape Plan, his show The Table with AO, and the In the Black app.

About the Author

Anthony O'neal

Anthony O'Neal is a #1 national bestselling author of Debt-Free Degree, personal finance expert and host of the popular podcast and YouTube show "The TABLE." Since 2014 he has challenged cultural norms and equipped millions of people to live a debt-free life, break generational wealth-gaps and build true wealth. He has appeared on Good Morning America, Live! with Kelly and Mark, Fox & Friends, Rachael Ray, The Tamron Hall Show, CNN News and has been featured in Success Magazine, MarketWatch, Bloomberg, Black Enterprise and GOBankingrates, among others. Anthony is a sought after, dynamic public speaker, speaking on stages with audiences of 40k+ people and an adjunct professor at Virginia Union University in Consumer Economics. He has been recognized by Black Enterprise as Top 40 Under 40 (2023) and Top 25 Personal and Professional Development Influencers to Follow by Success Magazine (2023). He is the author of Take Your Seat at The Table: Live an Authentic Life of Abundance, Wellness, and Freedom, and his latest book, Stop Living Paycheck to Paycheck. He resides in the Washington, DC suburbs.

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