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If you’re in your 30s, retirement may still seem like something you don’t have to think about yet. However, the sooner you start investing for your retirement, the more time your money has to grow. That’s why if you’re automatically depositing a portion of your paychecks into a 401(k) account, you’ve already taken crucial steps to prepare for the future.

Select the information used from Vanguard’s How America Saves 2021 Survey to see how much money the average American in their 30s has saved in their 401(k) account. Here is what they found:

  • Average 401(k) balance of 25-34 year olds: $33,272 (average); $13,265 (median)
  • Average 401(k) balance for ages 35-44: $86,582 (average); $32,664 (median)

Knowing how others are doing can help you determine where you should be, but there are no hard and fast rules about how much money you should have in your 401(k) account at each age. Indeed, personal retirement goals differ depending on the type of lifestyle you want to have in retirement. So if your ideal retirement lifestyle is less expensive than someone else’s, there’s no harm in not investing as much money as they do.

To determine your ideal retirement lifestyle, you might consider factors such as how often you would like to travel, whether you would like to stay in your current city or move to an area with a lower cost of living and what hobbies you would like to take.

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How to start saving for retirement

Your 401(k) account is one of the best ways to start saving for retirement, especially if you contribute enough to receive the full match from your employer. For example, if your employer matches contributions of at least 4% of your salary, you will need to contribute at least 4% of each paycheck to your 401(k) in order to receive the match.

You can contribute up to $20,500 to your 401(k) account for 2022 (the contribution limit adjusts each year). For most people, it’s hard to contribute enough from their paycheck to reach that $20,500 limit, so if you’re currently contributing up to your employer’s amount, you’re already making solid progress.

But that doesn’t mean you can only save $20,500 a year for your retirement. You can actually invest an additional $6,000 per year by opening a traditional IRA or a Roth IRA.

A Roth IRA is a powerful and highly recommended tool you can use when it comes to saving for retirement because you can contribute after-tax money that is invested, grows tax-free. over time and can be withdrawn without paying tax. The longer your time horizon, the more your money can grow.

There are many Roth IRA providers, like loyalty and Charles Schwab.

Loyalty investments

  • Minimum deposit and balance

    Deposit and minimum balance requirements may vary depending on the investment vehicle selected. No minimum to open a Fidelity Go account, but a minimum balance of $10 for the robo-advisor to start investing. Minimum balance of $25,000 for personalized planning and advice from Fidelity

  • Costs

    Fees may vary depending on the investment vehicle selected. No commission fees for trades in stocks, ETFs, options and some mutual funds; zero transaction fees for over 3,400 mutual funds; $0.65 per options contract. Fidelity Go is free for balances under $10,000 (afterwards, $3 per month for balances between $10,000 and $49,999; 0.35% for balances over $50,000). Fidelity’s personalized planning and advice has a 0.50% advisory fee.

  • Prime

  • Investment vehicles

    Robo-advisor: Fidelity Go® and Fidelity® Personalized planning and advice IRA: Fidelity Investments Traditional IRAs, Roths and Rollovers Brokerage and negotiation: Fidelity investment trading Other: Fidelity Investments 529 Education savings; Loyalty HSA®

  • Investment opportunities

    Stocks, bonds, ETFs, mutual funds, CDs, options and fractional shares

  • Educational resources

    Comprehensive tools and industry-leading in-depth research from over 20 independent vendors

Charles Schwab

  • Minimum deposit and balance

    Deposit and minimum balance requirements may vary depending on the investment vehicle selected. No account minimum for active investing via Schwab One® Brokerage account. Automated investing with Schwab smart portfolios® requires a minimum deposit of $5,000

  • Costs

    Fees may vary depending on the investment vehicle selected. Schwab a® The brokerage account has no account fees, $0 commission fees for stock and ETF trades, $0 transaction fees for 4,000+ mutual funds, and $0.65 fees by option contract

  • Prime

  • Investment vehicles

    Robo-advisor: Schwab Smart Wallets® and Schwab Intelligent Portfolios Premium™ IRA: Charles Schwab Traditional, Roth, Rollover, Legacy and Custodial IRAs; plus, a Personal Choice Retirement Account® (ECRP) Brokerage and negotiation: Schwab a® Brokerage account, brokerage account + specialized platforms and support for trading, Schwab Global Account™ and Schwab Organization Account

  • Investment opportunities

    Stocks, bonds, mutual funds, CDs and ETFs

  • Educational resources

    Complete retirement planning tools

If you want a hands-off approach, consider one such as Improvement Where wealth frontbecause they are robo-advisors who can choose the right portfolio for you and automatically adjust your allocation according to your needs and risk tolerance.

Improvement

On Betterment’s secure site

  • Minimum deposit and balance

    Deposit and minimum balance requirements may vary depending on the investment vehicle selected. For Betterment Digital Investing, minimum balance of 0 USD; Premium investment requires a minimum balance of $100,000

  • Costs

    Fees may vary depending on the investment vehicle selected. For Betterment Digital Investing, 0.25% of your fund balance as an annual account fee; Premium Investing has an annual fee of 0.40%

  • Prime

    Up to one year of free management service with qualifying deposit within 45 days of signup. Valid only for new individual investment accounts with Betterment LLC

  • Investment vehicles

  • Investment opportunities

    Stocks, bonds, ETFs and cash

  • Educational resources

    Betterment RetireGuide™ helps users plan for retirement

wealth front

On the Wealthfront secure site

  • Minimum deposit and balance

    Deposit and minimum balance requirements may vary depending on the investment vehicle selected. $500 minimum deposit for investment accounts

  • Costs

    Fees may vary depending on the investment vehicle selected. Zero account, transfer, trading or commission fees (fund ratios may apply). Wealthfront’s annual management advisory fee is 0.25% of your account balance

  • Prime

  • Investment vehicles

  • Investment opportunities

    Stocks, bonds, ETFs and cash. Additional asset classes to your portfolio include real estate, natural resources and dividend stocks

  • Educational resources

    Offers free financial planning for planning college, retirement and buying a home

If you’re able to maximize both your 401(k) account and your Roth IRA, that means you’re investing $26,500 a year for your retirement, but you still have another opportunity to save even more. You can also contribute to taxable brokerage accounts.

These accounts do not have the same tax advantages as retirement accounts (you will pay taxes each time you sell your assets and make a withdrawal). But taxable brokerage accounts can still be an important part of your retirement withdrawal strategy. Also, there is no limit to the amount you can invest through these accounts.

There are many brokerage account options, but select classified Robin Hood as the best app for active investing and tassels as the best option for micro-investment. Acorns allows users to micro-invest using the Acorns Round-Ups® Feature, which takes loose change from users and places it in ETFs. Users link their credit or debit card account to their Acorns account, and when purchases are made, the app rounds the costs to the nearest dollar and then invests that difference.

According Acorns website, the average user invests more than $30 per month through the Round-Ups feature. And keep in mind that you are investing money just by making purchases that you would be making anyway.

Robin Hood

On Robinhood’s secure site

  • Minimum deposit and balance

    Deposit and minimum balance requirements may vary depending on the investment vehicle selected. No minimum required to open an account or start investing

  • Costs

    Fees may vary depending on the investment vehicle selected. Trade without commission; regulatory transaction fees and trading activity fees may apply

  • Prime

    Robinhood will add 1 free share of stock to your brokerage account when you link your bank account and meet the terms of your promotion (you can keep the stock or sell it after 2 trading days)

  • Investment vehicles

  • Investment opportunities

    Stocks, ETFs, options trading, fractional shares, IPOs, as well as some cryptocurrencies through Robinhood Crypto (depending on where you live)

  • Educational resources

tassels

  • Minimum deposit and balance

    Deposit and minimum balance requirements may vary depending on the investment vehicle selected. No minimum required to open an account, $5 minimum to start investing

  • Costs

    Fees may vary depending on the investment vehicle selected. Monthly plans include: Personal ($3 per month) and Family ($5 per month)

  • Prime

  • Investment vehicles

  • Investment opportunities

    Diversified ETFs including over 7,000 stocks and bonds

  • Educational resources

Editorial note: Any opinions, analyses, criticisms or recommendations expressed in this article are those of Select’s editorial staff only and have not been reviewed, endorsed or otherwise endorsed by any third party.