Whether you want to prepare for a comfortable retirement or build assets you can use when needed, investing early in adulthood can make it easier to reach long-term goals. When you invest earlier in your career, your money has more time to grow. Even small contributions can build over time and may lead to growth later in life.
Here are a few things to think about as you learn how to start investing in your 30s, including basic account types for those who may not have a large amount to begin with.
Identify Your Investment Goals
Social Security benefits can help supplement income after you leave the workforce, but they may not be enough on their own. Social Security supports more than 75 million individuals and pays an average monthly benefit of about $1,931, according to the Social Security Administration.1 With fewer companies offering pensions, workers are often responsible for funding most of their retirement savings.
Retirement is not the only reason to open an investment account. You may also want to save for a down payment on a home or set aside money for a child’s future college costs. Knowing your purpose can help you choose an investment option that fits your needs and build a mix of assets that matches your timeline.
Keep in mind that investments do not guarantee growth or protect the value of your principal. They can lose value over time. Past performance does not predict future results.
Decide How Much to Invest
Retirement can last decades, especially if you are in good health. That means you may need a larger account balance so your savings last as long as you do.
General Savings Guideline
As a general rule suggest that 20-somethings should aim to save 10% to 15% of your pre-tax income. Make sure to include employer matching contributions in that total. If you start later, you may need to increase that percentage to make up the difference.
A retirement calculator can help estimate a more personalized number based on your current savings and expected expenses.
Why Starting Early Matters
Because of compound growth, money invested earlier has more time to grow.
| When You Invest | Potential Impact |
|---|---|
| Early in your career | More time for growth and compounding |
| Later in your career | Less time for growth, may require higher contributions |
Even small contributions can make a difference. Investing something, even $1,000 or less, is generally more effective than waiting.
Planning for Short-Term Goals
If you're working toward more near-term investment goals, you may want to start with your target amount (adjusted for inflation) and figure out how much you'll need to set aside each month to reach that goal. A compound interest calculator can provide a simple way to gauge whether you're on track, estimating the effect of interest-bearing accounts as well as reinvested stock market returns.
Understand Your Investment Options
Choosing where to put your money depends on your investment goals and time horizon. Many accounts today have low or no minimum balance requirements, which can help you get started.
Here are some options to consider when learning how to invest.
401(k) Plans
If your employer offers a 401(k) or similar plan, it can be a strong way to begin saving for retirement. A traditional 401(k) allows your investments to grow on a tax-deferred basis. This means you do not pay taxes on earnings until you withdraw the money. Many employers also offer matching contributions, which can help grow your savings over time.
Individual Retirement Accounts
Unlike workplace plans, you can open an IRA on your own as long as you have earned income. IRAs often provide a wider range of investment choices than employer-sponsored plans.
There are two main types to consider:
- Traditional IRA: Contributions may be tax-deductible, and earnings grow tax-deferred until withdrawal, similar to a 401(k).
- Roth IRA: Contributions are made with after-tax dollars, but qualified withdrawals in retirement are tax-free.
A Roth IRA may be more appealing if you’re currently in a lower tax bracket and expect your tax rate to be higher in the future, since you pay taxes on contributions now rather than later.
Taxable Accounts
While 401(k)s and IRAs offer clear benefits for retirement savings, taking money out before age 59½ may result in a 10% early withdrawal penalty. If you expect to need access to your funds sooner, a taxable brokerage account may offer more flexibility. You invest with after-tax dollars and pay taxes on earnings, but you can withdraw funds at any time without early withdrawal penalties.
Pick An Investment Strategy
Although the U.S. stock market has generated average annual returns of about 10% over the past century, there have also been many years when its value declined.2 Because of this, stocks are often a better fit for investors who do not plan to use their money for several years, since the risk of a loss may be lower over time.
If you are several decades away from retirement, putting money into a retirement account with a stock-heavy mix may help you take advantage of the higher growth potential of stocks compared to bonds or savings accounts. You may also have enough time to recover from market downturns over a longer period.
For those who are closer to retirement or investing for shorter-term goals, choosing more stable options can help reduce the risk of losing your initial investment.
Opening An Investment Account
If your employer offers a 401(k), getting started is usually straightforward. Contact your human resources department and complete the required paperwork.
With an IRA, you have several options. Accounts are available through mutual fund companies, banks, and life insurance companies. Many providers allow you to start with a small amount, but it helps to check for minimum balance requirements or fees.
Common Account Options
| Account Type | Where To Open | Key Notes |
|---|---|---|
| 401(k) | Employer | Set up through HR |
| IRA (Traditional or Roth) | Mutual fund companies, banks, life insurance companies | Traditional may offer tax-deferred growth; Roth offers generally tax-free withdrawals |
| Taxable Brokerage Account | Brokerage firms, trading apps | Broad investment choices |
Today, there are more ways to invest in stocks, bonds, and mutual funds through taxable accounts. In addition to traditional brokerage firms, you can use mobile apps to buy and sell securities directly from your phone.
New investors should be cautious when trading individual stocks. Some apps are designed to make investing feel like a game, which can lead to riskier decisions.
Final Thoughts
If you'd like to speak with a knowledgeable professional about how to start investing in your 30s, contact a registered representative today. They can provide a personalized look at your financial situation and help you begin.
Sources
- Monthly Statistical Snapshot, March 2026. https://www.ssa.gov/policy/docs/quickfacts/stat_snapshot/.
- Historical Average Stock Market Returns for S&P 500 (5-year to 150-year averages). https://tradethatswing.com/average-historical-stock-market-returns-for-sp-500-5-year-up-to-150-year-averages/.
