Personal Finance Retirement Saving

How to Save $1 Million for Retirement on $30,000 a Year

Written by Rebecca Lake

Stashing away $1 million for retirement is a lofty goal and bringing home a fat paycheck can certainly help you get there. If you’re not banking a six-figure income, however, you may have given up on the idea of retiring a millionaire but not so fast.

Building up a seven-figure nest egg when you’re earning a $30,000 salary may seem daunting but it’s doable with the right planning. If you want to add some serious zeroes to your net worth on a smaller income, here are the most important steps you’ll need to take.

1. Consider your timeline
When your goal is saving $1 million, how much time you have to do it is just as important as what you’re putting in the bank. If you’re in your late 20s, for example, you’re going to have a lot longer to build up assets compared to someone who’s in their early 40s. Think about when you want to retire. Knowing what your time frame is directly influences how much you’ll need to set aside.

2. Calculate what you can afford to save
A $30,000 annual salary breaks down to $2,500 a month, which is better than minimum wage but still not a huge payday. Deciding how much of that you can dedicate to retirement savings is the next crucial step in carving a path to $1 million. Again, this is why looking at your time horizon is so significant.

Here’s an example of the difference the age at which you begin saving makes. Let’s say you’re 25 years old and you plan to retire at 65. Your employer offers a 401(k) with a 100% matching contribution of the first 6% you chip in.

In that scenario, you’d need to contribute 11% of your $30,000 salary annually and earn a 7% rate of return. Assuming you start with a zero balance and don’t get any raises, you’d only have to save $275 a month over the course of your career to reach the $1 million mark.

About the author

Rebecca Lake

Rebecca Lake is a personal finance writer and blogger specializing in topics related to mortgages, retirement and business credit. Her work has appeared in a variety of outlets around the web, including Smart Asset and Money Crashers. You can find her on Twitter at @seemomwrite or her website,

Leave a Comment