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Financial Planning in Your 30s

Your 30s are often a decade of great achievement, acquisition, and personal growth. But it also can be a decade of competing priorities, like paying down a mortgage while saving for retirement and your kids’ college education. Here are a few tips to keep your plan on track:

  • Focus on saving. If you’re just now getting started on saving for retirement, you should aim to put away 15% to 20% of your pre-tax income (but if you’ve been saving 10% to 15% for retirement since your 20s, keep that up). It can be tough to set aside that much money for retirement, especially when you’re juggling other financial obligations. One way to lessen the hit on your current income is to contribute to a tax-deferred account, such as a 401(k) or traditional individual retirement account (IRA). These type of accounts can reduce your annual tax bill by setting aside money that won’t be taxed until you withdraw it in retirement. Many companies also match a certain portion of their employees’ contributions to 401(k) accounts. The IRS limits how much you can contribute each year in pre-tax dollars to a 401(k)—for  the 2018 tax year, the limit was $18,500 for workers under 50—but your employer’s matching contributions don’t count toward that limit.
  • Look beyond your 401(k). You may qualify for additional tax deductions on retirement savings even if you have maxed out your 401(k) contribution for the year. The IRS may allow you to contribute pre-tax money to a traditional IRA even if you have a workplace retirement plan, depending on your income level.¹ A Roth IRA may also be another option. While you won’t get a tax break in the year you make contributions to a Roth account, qualified distributions in retirement are tax-free.² For the 2018 tax year, the general contribution limit for both traditional and Roth IRAs is $5,500—or $6,500 if you’re age 50 and older.
  • Start saving early for your kids’ college. By the time babies born in 2018 pack their bags for college, four years of published tuition and fees are projected to be roughly $223,000 at a public university (in-state resident), and $438,000 at a private college.3 The earlier you begin saving, the better. If you begin investing $300 per month as soon as your child is born, assuming a 6% rate of return, you would have about $116,000 by the time he or she reaches age 18. If you postpone saving until your child is 10 years old, the final amount will be roughly $37,000.
  • Prioritize retirement savings. If you must choose between saving for college and saving for retirement, choose retirement. Your child will likely have more than one way to pay for college—including scholarships, loans, and grants—but you can’t make up lost retirement savings.  College costs can be daunting, but don't let them throw you for a loop. Relatively few students pay the full "sticker price."
  • Remember, college is still a great investment. Over a lifetime, the gap in earnings potential between a h.s. diploma and a 4-year degree can approach a million dollars.


1 For the 2018 tax year, the IRS allows workers under 50 with a modified adjusted gross income of less than $63,000 to deduct up to $5,500 in tax-deferred earnings to a traditional IRA even if they also have a workplace retirement plan. However, this deduction phases out at income levels between $63,000 and $73,000 for individuals and $101,000 to $121,000 for couples.

2 For the 2018 tax year, Roth IRA contribution eligibility phases out for individuals earning between $120,000 and $135,000, and couples earning between $189,000 and $199,000.

3 calculator.

What You Can Do Next

There may be a lot of competing priorities on your plate but try not to let them overwhelm you—plan accordingly.   

  • Consider Schwab Intelligent Portfolios®, it allows you to build separate portfolios for different savings goals—like college tuition, or retirement—based on your risk tolerance and time horizon for each goal.
  • If you prefer more personalized guidance, consider Schwab Intelligent Portfolios Premium™. A CERTIFIED FINANCIAL PLANNERTM professional can help you fine-tune your financial plan.
  • Call us at 800-355-2162 or visit your local branch to discuss all your options.

Important Disclosures

The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.

All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.

Examples provided are for illustrative purposes only and not intended to be reflective of results you can expect to achieve.

Accounts must have a minimum balance of $5,000 in order to be rebalanced.

Investing involves risks including possible loss of principal.

This information is not intended to be a substitute for specific individualized tax, legal, or investment planning advice. Where specific advice is necessary or appropriate, Charles Schwab & Co., Inc. (“Schwab”) recommends consultation with a qualified tax advisor, CPA, financial planner or investment manager.

Please read the Schwab Intelligent Portfolios Solutions™ disclosure brochures for important information, pricing, and disclosures related to the Schwab Intelligent Portfolios and Schwab Intelligent Portfolios Premium programs.  

Schwab Intelligent Portfolios® and Schwab Intelligent Portfolios Premium™ are made available through Charles Schwab & Co. Inc. (“Schwab”), a dually registered investment advisor and broker dealer. 

Portfolio management services are provided by Charles Schwab Investment Advisory, Inc. ("CSIA"). Schwab and CSIA are subsidiaries of The Charles Schwab Corporation.

Diversification and rebalancing strategies do not ensure a profit and do not protect against losses in declining markets.


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