‘I just feel like I’m behind’: I’m 29 years old. I have $4,000 in the bank and a $20,000 emergency fund. Am I doing OK financially?

At the moment, I’ve invested $500. My biggest concern is that I’m super behind in my retirement or just feel like I’m not doing good enough. I read how so many people have saved so much, and it’s caused me to place a chunk of my paycheck toward my Roth IRA, a hundred in my robo-advising account. I have yet to add any more money in my emergency fund — let alone my savings accounts — as I have around $100 left after paying bills and utilities, given that I force myself to live paycheck to paycheck.

I just feel like I’m always not saving enough and now that the holidays are approaching, I’m gonna attempt to pinch some cash for gifts. My mom just asked for financial assistance regarding dental work, and honestly I feel like the $3,000 I have in my savings is all I can offer.

I don’t think I’ve ever set money aside for small goals so I just focus on retirement and do my best to catch up. My savings and emergency funds haven’t been funded lately as I focus solely on retirement. Is this normal or should I just move my $20,000 emergency fund to a high-yield savings account and just let it be? Am I doing well financially?

What would you recommend that I do? Do I really need to speak with a financial planner like everyone else does, even though I don’t think I can afford one? I just feel like I’m behind or missing something, and your insight would be so much appreciated.

A 29-Year-Old Saver

You can email The Moneyist with any financial and ethical questions related to coronavirus at [email protected], and follow Quentin Fottrell on Twitter.

Dear Saver,

Retirement experts have a whole laundry list of goals for people as they reach age milestones in life. That can prove too much for many — in fact, a lot of — people. Unfortunately, those expectations become millstones for people who are struggling to make ends meet, pay bills and credit-card debts and put money aside for both a rainy day and retirement. 

That goes for you, me, and millions of other Americans. You’re not alone. You’ve come a long way, and you’ve done it singlehandedly. What’s more, most people have not come anywhere close to reaching their peak earning potential at 29, although it’s hard to put what we have at 29, 39 and 49, etc., into perspective when one is living it day after day. 

In your 20s, contribute to a retirement account, pay down student debt, make sure you have an emergency fund of three to six months of expenses, and track your monthly expenditures and get used to seeing where your money is going so you can plug any holes in your budget. You are doing all of that, and more.

We all start somewhere, and where you are at the moment is a damn good start. People in their 20s and 30s are paying off student debt — the nation currently owes north of $1.6 trillion in student loans — living frugally as you are and saving for a home and, we hope, not planning to put all their hard-earned money toward a $20,000 wedding. It feels like, and often is, a time of running just to stand still.

As we hit our 30s and 40s, it gets trickier. The goalposts are raised, and it can create paralysis for many people who feel like they’re falling behind and it’s hopeless. By the age of 35, Boston-based investment firm Fidelity Investments says you should have saved twice your salary. But we don’t live our lives on spreadsheets. We live in the real world.

The trick is to maintain a balancing act between living in the moment and knowing that there will come a time when you will want to retire and have enough money to live on. Looking over your shoulder at what other people have achieved can create financial paralysis and make some people give up. But each modest achievement is a mountain one has climbed.

To answer your question: Yes, you’re OK. Yes, you’ve got the right idea by saving and living below your means. Remember, more than half of Americans don’t even have three months’ worth of expenses in a fund. And, yes, it’s a good idea to put some of your emergency funds into a high-yield savings account, one where there is no penalty if you choose to withdraw it, or a CD or money-market account.

Think about investing some of your savings in the stock market, which has had a turbulent time during the pandemic. The rate of return will be better than putting it in the bank, but you will need a higher risk tolerance. Retail investors have turned to the stock market during the pandemic, contributing about $1 billion of inflows a day in October, according to Morgan Stanley. 

Even in a high-yield savings account the returns are not great, especially given rising inflation. The national average interest on a savings account is approximately 0.06%. The annual percentage yield (APY) — which takes the compounding of interest into account — for high-yield savings accounts obviously vary, as does the amount of money needed to open one. 

Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management, wrote in a recent report that “FOMO” has driven that, while another theory suggests “risks around supply-chain disruptions and inflation have been discounted and, with ample cash still on the sidelines, the odds tilt to the upside.”

On MarketWatch, Harriet Edleson suggests these questions when opening such an account: “Is the rate an introductory offer? What is the minimum balance required? What is the APY? How is the interest compounded? Is check writing included? What fees, if any, are associated with the account, such as for using an ATM? How do you put money into the account, and how do you withdraw it? Is the account insured?”

A 401(k) with an employer match would be ideal, and it’s worth asking when you move jobs whether that company offers one. Still, Roth accounts are suitable for people such as yourself starting out in their careers, when their salaries — and tax brackets — are relatively low. You are investing after-tax dollars, but you withdraw it tax-free in retirement.

Some of the responses to your question on the Moneyist Facebook Page are encouraging: “You are doing great for your age! I recommend not letting family or friends know just what you have in savings, investments, retirement accounts,” one woman wrote. Another added: “I’m guessing you are head and shoulders above most people in your age group.”

Some, but not all, retirement reports are becoming more nuanced, tackling issues like COVID-19 and a vast array of eclectic circumstances. What you are building up now are your financial muscles: consistency. Keep doing what you’re doing. The money you have put into your retirement account will grow, and the interest on that money will also grow.

One final thought: You say you have enough to help your mother. I understand why you felt compelled to help in this case. Please do be mindful about taking money out of your savings to help family members and telling people how much money you have. There are many options to pay for dental care, and you your savings could become depleted fast if you set a pattern of doing that.

Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

The Moneyist regrets he cannot reply to questions individually.

More from Quentin Fottrell:

• My married sister is helping herself to our parents’ most treasured possessions. How do I stop her from plundering their home?
• My mom had my grandfather sign a trust leaving millions of dollars to two grandkids, shunning everyone else
• My brother’s soon-to-be ex-wife is embezzling money from their business. How do we find hidden accounts?
• ‘Grandma recently passed away, leaving behind a 7-figure estate. Needless to say, things are getting messy’