What Should a 25-Year-Old Have Saved? A Realistic Path to $100K by 33

Ever wonder if you’re on track with your savings? A popular piece of financial advice suggests that by 33, you should have accumulated around $100,000. But what about those who are 25 right now? The answer: getting started immediately is your biggest advantage.

The Math Behind the $100K Goal

Let’s verify if this target is actually achievable. Assume you’re earning around $37,000 annually—roughly the median income for someone in their early twenties. If you consistently put away 20% of each paycheck, you’re looking at approximately $617 monthly before taxes even come out.

Here’s where compound growth enters the picture. Investing this amount at a steady 6% annual return (compounded monthly) yields roughly $102,236 after a decade. That’s hitting the $100,000 mark right on schedule.

But extend those investments another 10 years, and the pot swells to $287,122. Fast forward to age 63, and disciplined savers could accumulate over $1.2 million—a genuine path to retirement security.

How to Actually Save 20% of Your Paycheck

The real question isn’t whether the math works—it does. The challenge is execution. Kevin O’Leary, the Shark Tank investor, recently emphasized the simplicity of this approach: stop purchasing things you don’t actually need.

For a 25-year-old, this might mean:

• Living with family rather than renting independently
• Cutting discretionary spending on subscriptions and dining out
• Redirecting that freed-up cash into investment accounts

If your living situation and student loan obligations permit it, reaching $600+ monthly savings becomes realistic. Some people boost this even further by adding a side income stream—an extra $1,000 monthly accelerates the timeline significantly.

Better Investment Vehicles to Consider

You don’t need to limit yourself to stock market investing. A 401(k) retirement account typically delivers between 5% and 8% annually. The real win? Many employers match contributions, meaning you only need to invest roughly $300 per month to surpass the $100,000 target within ten years.

Additionally, the historical stock market average hovers around 10% annually, making a 6-7% target conservative and achievable through regular index funds or ETFs.

As Your Income Grows, Savings Multiply

Here’s the compounding benefit nobody discusses: your salary will increase. A 25-year-old earning the median won’t stay at that level forever. If you maintain the 20% savings rate as promotions arrive and raises accumulate, your monthly contributions will grow correspondingly.

Someone earning $50,000 within five years contributes $833 monthly instead of $617. Suddenly, reaching six figures happens faster—potentially by age 30 instead of 33.

The Bottom Line

Whether you’re 25 or just starting your career, the principle remains identical: start now, save consistently, and let time work in your favor. The difference between someone who begins at 25 versus 35 is staggering—compounding truly is the eighth wonder of the world.