The Smartest Retirement Step I’m Taking in My 30s—And You Can Too

Besides reminding me to clean my room, get my car’s oil changed, and not stay out too late on a Saturday night, one thing my parents told me repeatedly growing up: Contribute to my 401(k). ASAP. So, as soon as I landed my first corporate job, I knew I needed to sign up and start contributing to the company’s retirement plan.

Now that I am in my mid-30s, I have other priorities, like a 5-month-old daughter and plans to buy a house. However, saving for retirement is still non-negotiable. And it’s all because of the company match and my investing time horizon. By contributing the maximum amount allowed to earn my company match, I can save twice as much for retirement through my employer’s 401(k) every year.

Your Company’s 401(k) Match Could Make All the Difference

After almost 6 years of taking advantage of my company’s match, I have more than 1x my salary saved for retirement in my workplace 401(k). That’s in line with the recommended amount for a 30-something like me. I would not have been able to achieve that were it not for my company’s match. I plan to max out my 401(k) contributions as soon as I can, but for now, I’m able to put about $24,000 per year into my 401(k) (that includes my employer’s matching contributions). If I never change that contribution amount, I’ll have $3.7 million by the time I’m 67 (assuming a 6% annual return).

The average company 401(k) match is 4.6%, according to Vanguard. So let’s look at how that amount could impact your retirement balance 30 years from now. We’ll use the example and details below throughout this article.

Let’s say you’re 35 and make $100,000 per year. You contribute 4.6% of your salary ($4,600) to your 401(k). You have already saved $20,000 for retirement in your 401(k). With no company match, and a conservative 6% average annual rate of return for 32 years, you’d have about $650,000 in your retirement plan once you turn 67.

Now, let’s say you did have a company match. You get 100% up to 4.6%, which means you get a dollar-for-dollar match of $4,600 per year. Now you’re investing a total of $9,200 per year. If everything else stayed the same, with the company match, you’d have over $1.1 million in your retirement account by age 67.

Plan to Spend 80% of Your Pre-Retirement Income During Retirement

The 80% rule of thumb is just a guideline for how much money you’ll need in retirement. So if you currently make $100,000, you could say you should expect to need $80,000 per year in retirement. This will also help you determine what your retirement account balance needs to be when you reach retirement age.

If you’re 35 years old and need $80,000 per year in retirement, you’ll need about $3.2 million in your retirement account when you retire. That’s based on retiring at 67 and living to age 95. So if you’re saving and investing $9,200 per year—thanks to that company match—you’ll still end up falling short of your retirement balance goal by over $2 million (but it’ll be less short than if you didn’t have a company match).

Thankfully, there are ways to close that gap and get closer to your retirement goal.

Max Out Your 401(k)—And Open an IRA

For 2025, you can contribute up to $23,500 per year to your 401(k). Combined with your employer’s match, you can contribute up to $70,000 in 2025. 

If you are in a position to save even more than $23,500 in a 401(k) every year, then you’ll want to open a Roth IRA or a traditional IRA. Both individual retirement accounts allow you to save an additional $7,000 per year in 2025 (and $8,000 if you’re 50 or older).

So let’s say you decide to max out your 401(k) contributions and also get a 4.6% employer match. Then you max out your IRA. That’s a total of $28,100 per year in your 401(k) and $7,000 per year in your IRA.

If you stick with that saving and investment plan for 32 years, you could end up with $3.3 million in your 401(k) and over $799,000 in your IRA (if the market returns 6% per year).

That’s over $4 million by the time you’re 67—a fair amount more than the $3.2 million you’d need if you were aiming to have enough to spend $80,000 per year in retirement.

Start by Investing Any Little Bit You Can for Retirement

Maxing out your 401(k) and an IRA every year might be difficult if you’re like me and have other priorities in life that you need money for. Whether it’s saving for your child’s future or a house that you hope to buy, you may need money for other things in life and may not be able to max out your retirement savings.

And that’s OK. 

What matters most is being strategic with how you save for retirement. Opting into your 401(k) and maxing out the company match is just the start. Once you accomplish that and get comfortable contributing, you can increase your savings rate to get closer to that goal.

If you’re in your 30s, you have time on your side. Investing what you can now and increasing your contributions over time, up to the limits, will allow you to maximize the compounding returns for the next 32 or more years.