Clever investing strategies by income level: $30K, $65K, $105K+ (because saving alone won't build serious wealth)

At this level of earning power, you have some breathing room to think long-term. If you’ve managed to set aside an emergency fund, you can now start diverting your savings to a long-term retirement plan. At this income level, even minimal savings can compound into genuine wealth over time.

For instance, if you save just 5% of your salary, or $271 a month, and invest it in a low-cost index fund that tracks the S&P 500, you could become a millionaire in 37 years — assuming historic annual average returns of 10% repeat themselves. In other words, if you start saving at 25, you could have a seven-figure portfolio by the time you reach 62.

This strategy could be supercharged if your employer offers a 401(k) match. Nearly 98% of companies with a 401(k) plan option also offer matching benefits, according to the Plan Sponsor Council of America. (3) And, on average, the match is between 4% and 6%, according to the U.S. Bureau of Labor Statistics.

Assuming you save 5% in your 401(k) plan and your employer matches 5% on top, you could reach millionaire status in 30 years, assuming the same 10% annual return from the S&P 500.

However, this calculation assumes your earning potential doesn’t change over three decades, which is unrealistic. Most employees see their salaries grow with experience.

It also ignores inflation. Having $1 million in retirement savings in 30-plus years isn’t the same as having $1 million to retire on today.

$105,000 or more

The six-figure club isn’t as exclusive as it used to be. As of 2024, roughly 18% of adults earn over $100,000 a year, according to a YouGov poll. (4)

A six-figure income is even more common on a household basis. Nearly 42% of all U.S. households earn over $100,000 a year, according to IBIS World. (5)

Earning $105,000 or more a year theoretically puts you in a very comfortable position. Saving just 5% of your income and investing it in a low-cost index fund could get you to millionaire status in 32 years, and that’s without accounting for matching contributions from an employer.

However, your biggest challenge at this income level isn’t retirement, but lifestyle inflation and taxes. Nearly 43% of individuals who earn more than $100,000 say they are barely coping or struggling financially, according to YouGov.

Put simply, you can outspend any salary, no matter how attractive, with bad spending habits and a lack of tax planning. At this stage, your top priority should be hiring a professional financial advisor to help you navigate savings and investments strategically.

With a customized investment strategy tailored to your income level, you can reach your financial goals faster than most of your peers.