Ideal Savings Targets for Age 30 According to Financial Experts

Saving may not be the top priority during one’s 20s. Low entry-level salaries, high living costs, and debt instalments are common reasons. However, as one enters their 30s, financial experts suggest focusing more on long-term financial goals, such as retirement funds.

So, what is the ideal amount of retirement savings you should have by the age of 30?

According to Fidelity Investments, an individual should ideally have savings equivalent to one year’s annual salary when entering their 30s. For example, if your salary is Rp10 million per month, you should ideally have Rp120 million in your account as future savings.

Meanwhile, financial planner Lauryn Williams provides a more flexible guideline: simply set aside 20% of your monthly gross income for savings. “I think 20% is a reasonable figure, although it is not easy, especially if you already have responsibilities such as childcare costs,” said Williams, as quoted by Yahoo Finance.

Financial observer and author Tony Steuer notes that savings targets vary for everyone. “If you are just starting in your 30s, there is still time to catch up. Do not be tempted to chase the deficit with high-risk investments,” he remarked.

Here are several priority steps according to experts:

1. Pay off high-interest debt

Before saving aggressively, ensure that credit card debt or high-interest consumer loans are settled. High interest rates can erode your investment returns. “If you have a retirement account providing a conservative return of 5% or 6%, but at the same time you are paying credit card debt with 11% interest, you need to pay off your debt first, or you will simply lose money by placing those funds into your retirement account,” Steuer warned.

2. Maintain an emergency fund

Once debt is managed, set aside an emergency fund of at least 3-6 months of expenses to avoid falling back into debt when a crisis occurs. “My motto is to prioritise your retirement savings, and you will never be disappointed,” said Williams. “If you cannot fund both savings, focus on paying off your consumer debt and then create an emergency fund to avoid being trapped in a cycle of debt when an emergency arises,” she added.

3. Set a monthly savings target

Having a target can help you remain consistent in saving. Start with a small target, such as saving 15% of your salary, and then gradually increase that target.

4. Transfer directly to savings

Immediately transferring money to savings helps combat lifestyle creep, which is the habit of increasing one’s lifestyle as income rises.