Updated: Aug 15, 2025

It can feel impossible to think about retirement when you’re focused on rent, groceries, and gas—but saving something, even just a little, can make a big difference. Learn how to start building a more secure future no matter where your finances stand today.

Why Retirement Savings Matter

Retirement may seem far off, but the sooner you start preparing, the more options you’ll have later. Social Security will likely be a part of your retirement income, but for most people, it’s not enough to live on by itself. That’s why saving on your own—bit by bit—can help cover the gap.

Saving for retirement isn’t about stashing away huge amounts of money. It’s about building a habit of saving consistently over time. The earlier you start, the more your money can grow thanks to compound interest, which means you earn interest on both the money you save and the interest it earns along the way.

Even if you can’t put much away right now, it’s better to save $5 a week than nothing at all. Over time, those small steps can turn into meaningful progress.

Start with a Small, Consistent Contribution

If money is tight, focus on starting small. Choose a number that doesn’t hurt your budget—$5, $10, or $25 a month—and treat it like any other bill. Automating your savings can help make it stick. If your paycheck goes to a bank account, consider setting up an automatic transfer to a savings or retirement account on payday.

The key is to be consistent. If you wait until you have “extra” money to save, it may never happen. By setting up a regular contribution, even a small one, you’re building a habit that will serve you for the long run.

As your income grows or your expenses go down, you can slowly increase the amount you’re saving.

Use Employer-Sponsored Retirement Plans

If your job offers a 401(k), 403(b), or similar retirement plan, that’s a great place to start. These plans let you contribute money directly from your paycheck, often before taxes are taken out. That lowers your taxable income and lets your money grow tax-deferred.

Some employers also offer a match—meaning they’ll put in extra money if you contribute. For example, if they offer a 100% match up to 3% of your pay, and you earn $30,000 a year, contributing just $900 would get you another $900 from your employer. That’s free money—and it adds up fast.

Even if you can’t afford to contribute much, putting in enough to get the full match is one of the smartest financial moves you can make.

Explore Individual Retirement Accounts (IRAs)

If you don’t have access to a workplace plan, or want to save more on your own, consider opening an IRA. There are two main types:

Traditional IRA – Contributions may be tax-deductible, and your money grows tax-deferred. You pay taxes when you withdraw the money in retirement.

Roth IRA – You contribute after-tax dollars, but qualified withdrawals are tax-free. This is a good option if you expect your income—and your tax rate—to go up over time.

You can open an IRA through a bank, credit union, or online brokerage. Many places have no account minimums and offer easy tools for beginners. Providers like Fidelity, Vanguard, and Charles Schwab are popular for their low fees and solid customer support.

For 2024, you can contribute up to $6,500 per year to an IRA (or $7,500 if you’re over 50). But remember, you can start with much less—every little bit counts.

Consider a MyRA or Auto-IRA Alternative

If you’re not ready for a traditional IRA, some states offer retirement savings plans for workers without access to one through their job. These are often called auto-IRAs, and they work a lot like Roth IRAs but with easier enrollment and lower risk investments.

Programs exist in states like California (CalSavers), Oregon (OregonSaves), and Illinois (Secure Choice). You can opt in through your employer or sign up on your own if you’re self-employed.

These programs have low minimum contributions and are designed to be simple, low-risk options for people just getting started.

Make Use of the Saver’s Credit

If your income is on the lower side, the federal Saver’s Credit can help you get money back on your taxes just for contributing to retirement. You may qualify for a credit of up to $1,000 (or $2,000 if married filing jointly) if you contribute to a 401(k), IRA, or similar plan.

The credit is available for individuals with income below $36,500 (or $73,000 for married couples). To claim it, just make sure you file your taxes and include Form 8880.

This credit is one of the best incentives for low- and moderate-income savers—it puts actual money back in your pocket while helping you save for the future.

Reduce Fees and Keep It Simple

When money is tight, you want every dollar you save to work hard for you. That’s why it’s important to choose low-fee investment options for your retirement savings.

Many retirement plans and IRAs offer “target date” funds, which automatically adjust over time based on your age. These are a simple, low-maintenance way to invest without needing to pick individual stocks.

Look for index funds or ETFs with expense ratios below 0.50%—or even better, below 0.10%. The less you pay in fees, the more you keep over time.

If you’re not sure where to start, talk to a representative at your bank or a certified financial counselor at a nonprofit like NFCC.org. They can help explain your options without pressuring you to buy anything.

Use Windfalls Wisely

When you get a tax refund, stimulus check, or even birthday money, consider putting part of it into your retirement savings. You don’t have to put in the whole amount—just commit to saving a portion before spending the rest.

This “one-time” saving strategy can help boost your account without affecting your regular budget. Over time, these little boosts can make a big difference.

You can also use found money like rebates, cashback rewards, or loose change savings apps to quietly grow your retirement fund in the background.

Know It’s Okay to Start Late

If you haven’t saved much yet—or anything at all—it’s never too late to start. Even if you begin in your 40s or 50s, consistent saving and smart planning can still give you more options later on.

People over 50 can make “catch-up” contributions to retirement accounts, letting them save extra each year. For IRAs, the catch-up amount is $1,000. For 401(k)s, it’s $7,500.

Starting late may mean saving more aggressively, working longer, or adjusting your retirement timeline—but it’s still worth doing. A little effort now can reduce your reliance on Social Security and help you maintain more independence later.

Avoid Dipping into Retirement Too Early

It can be tempting to cash out a 401(k) or IRA when money is tight, but doing so usually comes with penalties and taxes. You’ll also lose the chance for that money to grow over time.

If you’re struggling, look into other options first—like hardship assistance, community resources, or temporary side gigs. Retirement money should be a last resort, not the first place you turn during a financial crunch.

Final Thoughts

Saving for retirement doesn’t require a big paycheck or a perfect budget. With small, steady contributions, smart use of available tools, and a commitment to starting where you are, you can build a more secure future over time. Whether you’re saving $5 or $50 a month, it all adds up—and the sooner you start, the more freedom you’ll have later on.