saving twice your income by 35

Saving Twice Your Salary by 35 – Why It’s Not a Crazy Idea

I read a tweet a few weeks ago that caused a massive uproar amongst sensitive millennials, and felt compelled to respond.

Take a look at that favorite-to-comment ratio on the post. This should tell you all you need to know about the backlash that MarketWatch faced by sharing this opinion with the masses. I was initially confused as to why saving twice your income by 35 was such a controversial topic. After reading many of the responses it became pretty clear.

What’s with the Controversy?

As funny as the initial response was, I found MarketWatch’s follow-up tweet to be even better.

“Want to make millennials mad? Talk about saving for retirement” could not be more spot on. Hate it or love it, the fact is that the majority of people our age are terrible at saving and investing money. Saving twice your income by 35 seems like a pipe dream.

“Woe is Me”

A lot of people my age think it’s cool to play the “woe is me”, “I’m a poor millennial” card. I know this from side conversations with friends, or acquaintances at the bar – wherever. Everyone my age likes to think our financial mobility has been crushed by the baby boomers. They all like to blame someone else for their small bank account.

Everyone has their own situation in life and I understand that. While there will certainly be some exceptions, the vast majority of young professionals have every ability to save and invest more wisely.

The fact that a simple MarketWatch opinion caused such an uproar should give you some insight into the psychology of the millennial generation. Truth be told, 40% of Americans can’t even cover a $400 emergency expense. That’s just scary.

Seeing a statement like “saving twice your income by age 35” elicits such a strong negative response because many people our age are SO FAR BEHIND where they need to be in terms of saving, investing, and making wise financial decisions. And it clearly scares them. If you aren’t on the right track, you might as well bash that track to feel better about your own situation.

Enough about the reasoning behind the negative response to the tweet. The further I delve into the comments and replies, the more my head hurts. For the sake of this article, I’d like to recap exactly how to have twice your salary saved by 35, using some basic math and investment principles.

How to Save Twice Your Income By 35saving twice your income by 35

Managing your money effectively is one of the core principles we preach at Home at 30. It’s actually a pretty simple concept to make sure you’ve got double your income as a financial nest egg by the time you hit 35.

Many of our articles are meant to help people invest wisely, pay off student loans, and make wise choices money. Just spend an hour browsing Home At 30 and you’ll see what I mean (c’mon – do it)!

Let’s break things down with some math and a straightforward example of how to save your money between the ages of 20 and 35. (hint: you should be saving in college!)

Assuming the Average

The U.S. Bureau of Labor Statistics estimates the following wage rates for the average American, working 50 weeks a year:

  • 20 to 24 years old: $576 per week, $28,800 per year
  • 25 to 34 years old: $793 per week, $39,650 per year
  • 35 to 44 years old: $986 per week, $49,300 per year

Per the MarketWatch tweet, $98,600 in savings by age 35 would be considered acceptable. This is double the $49k the average American makes per year between the ages of 35-44.

The general rule of thumb for savings is 20% of your annual gains, but for the sake of this post, let’s assume 15%. Here is a simplified breakdown of fifteen years of savings at the average U.S. rate of income.

  • $28,800 * 15% = $4,320/yr * 5 years = $21,600 saved
  • $39,650 * 15% * = $5,947.50/yr * 10 years = $59,475 saved
  • Total = $81,075 saved

Assuming you put your money away in the bank and realize a 0% return on investment between the ages of 20-35, on average you’d see $81k in savings. Pretty close to our number of $98,600 right? How do we go about bridging that gap to hit double your income?

twice your income by 35

Investing Wisely

Using the Simple Savings Calculator, we can figure out the rate of return needed to hit $98,600.  Let’s figure out the average monthly deposit into an account that earns us interest. A 401k would be a perfect example.

  • $28,800 * 15% = $4,320
    • $4,320/12 = $360/month
  • $39,650 * 15% * = $5,947.50
    • $5,947.50/12 = $495/month

(360*(1/3)) + (495*(2/3)) = $450/month

This is our average monthly contribution to the account over 15 years. Plug that into our calculator, and voila!


As you can see in the chart to the right, we can make it over our golden number of $98,600 fairly easily with 15 years of saving properly. At a rate of return of only 2.75% per year, we would hit our goal! For reference, the average annual return on the S&P 500 is 9.0% a year.

We can find some very safe investment vehicles to make that 2.75%, which in all likelihood will probably make more than that.

The next time you hear someone complaining about how tough it is to save, think of this simple example. The problem with our generation today (in the context of this article) is a lack of fiscal discipline. This can result in almost no savings in their 20’s and 30’s.

Save your money starting in your early 20’s and you only need a modest 2.5% return on your savings to hit double your income by 35. This is at the average U.S. income; many of us will make quite a bit more. It all comes down to being wise with your paycheck!

That’s all for now, let me know what you think in the comments or on Twitter.

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All opinions expressed on this blog are solely those of Home at 30 and are in no way affiliated with any other organization or institution. The purpose of this blog is to give general education and information about investing, wealth, careers, and college; It is not intended to be professional advice.

Author: Joe Savoia

Joe is a 2014 graduate of Northeastern University and currently works in a field sales role for technology company Acquia. He has worked internationally as one of Acquia’s earliest Australia-based employees and helped in the early stages to develop that region. Today Joe is based out of Boston and lives in Somerville, MA. Joe’s primary interests vary widely, including everything from robotics/AI to finance, blockchain, and the rapidly evolving world of tech we live in.

Saving Twice Your Salary by 35 – Why It’s Not a Crazy Idea was last modified: June 11th, 2018 by Joe Savoia

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