How Do You Stack Up?

Key Takeaways

• Starting retirement savings early allows compounding to grow your balance significantly over time.

• Many young adults lack sufficient retirement savings, with over half of those in their 20s having none at all.

• Fidelity suggests saving an amount equivalent to your annual salary by age 30 and three times your salary by age 40.

If you’re in your 20s or 30s, retirement might feel too far away to worry about and save for. But such thinking can come back to haunt you.

The earlier you start, the easier it will be to build an adequate nest egg. The reason is compounding. Contributing $200 a month from age 25 generates around $1 million by 65, assuming a 10% average annual return—the S&P 500’s long-run historical average. If you instead wait until 35, the same contributions will leave you with only about $450,000.

What’s Typical for Retirement Savings in Your 20s and 30s

For many people in their 20s and 30s, the bigger question isn’t how much they have saved for retirement—it’s whether they’ve started at all. In 2022, 57% of 20-something households and 40% of households in their 30s reported having no retirement account, according to the Federal Reserve’s Survey of Consumer Finances (SCF).

Among households that did have retirement accounts, the median balance was a bit over $13,000 for people in their 20s and $33,000 for those in their 30s.

Vanguard’s year-end 2025 analysis of the 401(k) plans it administers uses different age ranges, but it offers another view of younger savers. Median balances were $18,732 for participants aged 25–34 and $46,919 for those aged 35–44.

People who actively track their finances tend to have more saved. March 2026 data from Empower’s Personal Dashboard, which reflects users who voluntarily engage with financial planning tools, puts median retirement balances at $43,875 for people in their 20s and $98,952 for those in their 30s.

The gaps between these numbers underline how important access, participation, and engagement are. According to the Bureau of Labor Statistics, 75% of civilian workers have access to a workplace retirement plan, but only 56% participate. For part-time workers, access drops to just 46%.

Why This Matters

Retirement savings gaps that seem small in your 20s and 30s become much harder to close later. The longer you delay, the more you’ll need to save to catch up—and the less time your investments have to do the heavy lifting.

Why ‘Typical’ Isn’t the Same as ‘On Track’

Unfortunately, what the typical American has saved in their 20s and 30s falls well below standard retirement benchmarks.

Fidelity recommends saving an amount equivalent to your annual salary by age 30 and three times your salary by age 40. For someone earning $65,000, that means arriving at 30 with $65,000 saved and at 40 with $195,000 in savings.

That benchmark assumes consistent saving from age 25, a 15% total savings rate including employer contributions, and steady investment in equities. Many younger workers haven’t followed that blueprint.

It’s also worth thinking about what your savings will need to produce. Financial planners commonly suggest a sustainable annual withdrawal rate in retirement of around 3%–4% of your total balance.

With a 4% withdrawal rate, every $100,000 saved creates $4,000 a year in retirement income.

What To Do If You’re Behind—Or Just Getting Started

Starting early is the most powerful lever. Other good principles to adopt include:

• Capture the full employer match. If your employer offers a 401(k) match, contribute at least enough to get the full amount. This is essentially free money.

• Automate increases. If saving 15% feels out of reach, aim to increase contributions by 1% each year. According to J.P. Morgan, starting a 1% annual increase at 25 and sustaining that over a 40-year career could add roughly $84,000 in retirement savings—versus around $22,000 if the same increase is made only in the final 20 years.

• Don’t let a lack of workplace access become an excuse. If you’re one of many people without a workplace retirement plan, you can help fill the gap using a traditional IRA, Roth IRA, or self-employed retirement plan, such as a SEP-IRA.

• Keep your portfolio equity-heavy. Younger investors have time to ride out market downturns and should generally invest most of their retirement savings in stocks.

The gap between where most younger Americans stand and where they need to be is significant. But in this age bracket, time is still working in your favor.

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