Not Enough Money To Retire? 14 Strategies for Saving When You’re Starting Late

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Facing retirement without enough savings can be a scary reality for many.

As the dream of a relaxing and secure retirement seems to slip away, the question arises: what can you do now to turn things around when you don’t have enough money to retire?

In this article, we’ll explore practical steps and strategies to help you build a more stable financial future, even if you’re starting late.

Whether you’re just beginning to realize the urgency or have been struggling to save for years, these actionable tips will guide you toward a more secure retirement.

Read on to discover how you can take control of your financial future today.

14 Tips to Use When You Do Not Have Enough Money to Retire

Work Longer

The first thing you should consider when you do not have enough money to retire is to work longer.

It isn’t ideal, but it will provide you with an income.

And with this money, you can get your finances in order and ideally save a large percentage of it so you can retire.

I suggest you use a free retirement calculator to figure out how much longer you should work.

This will allow you to see where you are financially and what steps you need to take to achieve your goals.

For example, you might find that instead of retiring at 65, if you retire at 70, you will be in much better financial shape.

There are two important points I want to make about this idea.

First, if you hate your current job, see if you can get another job doing something you enjoy more.

This will make working for a few more years more enjoyable for you.

And who knows, you might enjoy it so much that you decide to work part-time for a few years beyond that!

Second, don’t get discouraged if your finances are in really bad shape and the calculator tells you to work until you are 85.

Instead of figuring out what you need for your ideal retirement, find out what you need to do for a decent retirement.

Sure, you might not be able to travel all around the world, but you can still do some traveling with a reduced budget.

The goal is to find a happy medium where you can stop working and survive financially.

Put Money into Your 401K

If your employer offers a 401k plan, you need to take advantage of this.

For most people, it is recommended to put in just enough to hit the employer match.

This guarantees you get the free money from your company.

But since you are behind in the game, you should aim to save more.

Try to contribute at least 10% of your paycheck into your 401k.

You might notice the slightly smaller paycheck, but you will quickly get used to it.

If you get a bonus, ask to see if you can put all of it into your 401k as well.

I know you might want to spend this money on something, but your retirement is a bigger priority right now.

Save in a Roth IRA

In addition to your 401k at work, you should fund a Roth IRA.

With the recent Secure 2.0 Act, you can now put larger catch-up contributions into your 401k and IRAs.

The benefit of having a Roth is that the money grows tax-free.

This means you pay zero taxes when you withdraw the money, unlike with a 401k, where you pay taxes on the gains.

Try to put away $100 a month into a Roth.

If you can’t hit this amount, put in less and work your way up.

To make it easier to contribute, set up an automatic investment plan.

This plan will take money from your checking account each month and invest it for you without you having to do anything.

It’s a great way to make sure you save.

Be Smart with Your Investments

Since you are behind on your savings, you might think you need large returns to grow your money.

Don’t fall for this idea.

While it is true that some investments can yield larger than average returns, they also come with larger than average declines.

You cannot afford to lose 50% or more of your money.

A better option is to stick with a traditional asset allocation of 60% stocks and 40% bonds.

The good news is there are many balanced funds out there with this allocation.

So, you only need to buy one investment, not five or six.

The more you can resist the urge to out-earn the market, the better off you will be.

Consider a Health Savings Account

If you have health insurance from your employer, you might have the option of a high-deductible health plan.

For many people, this is a great option.

First, the monthly premiums taken from your paycheck will be lower.

Second, you can save money in a health savings account to pay future medical bills.

Many employers even offer free money with this plan by putting money into your account.

The amount varies by employer but could be as high as $1,000 a year.

The downside to a high deductible plan is it shifts more of the cost burden onto you.

This means higher deductibles and out-of-pocket expenses.

But this doesn’t mean it will cost you more.

If the reduced premium is large enough and you are healthy, meaning you rarely see the doctor, this option could save you thousands.

If your employer offers this plan, they likely have a tool for you to compare this insurance to traditional insurance to help you see the best one for you.

Try to Secure a Raise

One important step in helping you to put money away for retirement is to earn more.

This is where a raise comes in.

But you can’t just rely on your annual 3% raise.

You need larger raises so you can save a lot more money.

How do you get bigger raises?

You have to stand out.

Are there any skills you use for work that you can improve?

For example, at a previous job I worked out, we used Excel.

I took some time to learn macros, which made me more efficient at my job.

Then, I taught the team how to use them, and we all got more done in less time.

This led to a nice raise for me.

The trick here is to find free resources to improve your skills.

This should be possible for most people thanks to YouTube and other free online courses.

Another tactic is to ask your manager what work they have to outsource and see if you can do it for them.

You are not only helping them get their work done, but they will also more easily notice your effort.

I have an article that walks you step-by-step to getting bigger raises, and it is a must-read.

Work a Side Hustle

If you can’t get a raise or you want to save more money, consider starting a side hustle.

There are many side hustle ideas out there that allow you to earn an income while having fun.

Do you enjoy riding a motorcycle? Look into ways to make money with your motorcycle.

Do you like to find deals? Look into reselling using the Amazon FBA program.

Don’t think you need to work a low paying retail job.

Many options pay well and are waiting for you to discover them.

And here is a trick I used: don’t budget any of the money you make with your side hustle.

Take 15% of it and put it aside to pay taxes, then take the rest and put it into a savings account or investment account.

When I was younger, I had a side hustle where I did this.

I was putting around $10,000 a year into savings.

In five short years, I had an extra $50,000 in savings.

If you can “ignore” this money and save it, it can significantly affect your finances.

Delay Social Security

While we all want the monthly Social Security check from the government, delaying this monthly income stream could be a smart move.

Each year you delay past your full retirement age, your benefits increase by about 8% until age 70.

This means you get a larger monthly check, providing greater financial security in your later years.

Additionally, delaying benefits can be beneficial if you expect to live longer, as it maximizes the total amount received over your lifetime.

Here is the Social Security website that allows you to see the impact on your benefits.

Reduce Expenses

You need to look at every way possible to reduce your expenses.

Can you lower your grocery bill by purchasing store brand items?

Maybe you can reduce your meat consumption and go meat free a couple days a week.

Can you scale back on how much you spend eating out?

Or perhaps you cancel your cable package and rely on alternatives to cable.

Trust me, there are all sorts of things you can do to save money.

But don’t stop with your monthly budget.

Look around for other ways to save.

Do you have things around your house you no longer use?

Consider selling them for cash.

The more money you can put away, the easier it will be to live when you are retired.

Pay Off Debt

If you have debt, you should make it a priority to pay it off.

The best method I’ve found is the debt snowball method.

It has you organize your debt from smallest balance to largest, paying the minimum monthly amount on all but the smallest.

For the smallest, you put all the money you can towards it, so you pay it off quickly.

Once it is paid off, you move to the next smallest balance and pay as much as you can towards that one.

Rinse and repeat.

Another idea is to pay off your mortgage before you retire.

I suggest this because your payment makes up a large portion of your monthly expenses.

If you’re paying $900 a month, that is $10,800 a year.

If you are mortgage free, you have over $10,000 “extra” a year to live off of because your monthly expenses are lower.

There are lots of ways to pay off your mortgage early, so I suggest you look into them.

Finally, consider consolidating debt into one loan if you have a lot of debt.

For some people, managing multiple credit card debts, an auto loan, and other financial obligations can become overwhelming.

By simplifying everything into one payment, you can attack your debt more easily.

Save, Then Save More

Another priority item when you do not have enough money to retire is to save money.

You can make this fun by using money saving challenges that gamify the process.

Or, you can create your own ways to save.

Maybe create a swear jar and put money into a jar every time you use a bad word.

I used a trick where I saved my savings.

When I would go grocery shopping, the bottom of the receipt would tell me how much I saved.

I would take this amount and transfer it from my checking account to my savings, so I would actually save the money and not spend it on something else.

Finally, for the money you do save, look at how to earn a decent return on your savings.

Don’t settle for your local bank paying you close to zero percent interest.

Use online banks that will help your money grow with higher interest rates.

One of my favorites is CIT Bank.

They consistently are at the top of the list for the highest interest with their savings accounts.

Put Aside Windfalls

If you get a sizable tax refund, a bonus, or other large amount of money, make it a point to save some of it.

In fact, you should save the majority of it.

When I was in debt and got my tax refund, I put 70% towards my debt, 20% to savings, and 10% for fun.

The 10% I could spend on whatever I wanted.

This allowed me to still enjoy the money without wasting all of it.

In your case, you want to put 60% towards savings, 30% towards any debt you have, and 10% for fun.

If you get a $1,500 refund, this breaks down to:

• $900 for savings
• $450 for debt
• $150 for fun

The exact breakdown will vary depending on your situation, but try to stick to 10% for fun and use the rest to get ahead financially.

Downsize

Some of your largest expenses are your house and your car.

While this might be extreme, consider downsizing to save some money.

Could you sell your house and move into a smaller one?

Maybe the cost of living in your area is high. Could you move 20 minutes away and live for less?

If that is too extreme, consider renting out part of your house or garage.

Another option is your car.

When you add in the cost, insurance, and upkeep, the money you pay could be a lot.

If you have a newer car, can you sell it for a reliable older model?

Or are you willing to try my method of never having a car payment again?

At the very least, you should shop around for auto insurance every couple of years to try to save.

Consider Working in Retirement

Finally, you can consider working in retirement.

This doesn’t mean you need to work a full-time job or start another career in your golden years.

You could find a part-time job doing something you enjoy.

Not only will you have a small income to live off of, but it will help you to stay active, which is great for your long term health.

If you don’t know where to start, I created a list of low-stress jobs for retirees that you should check out.

While this list isn’t exhaustive, it will get you thinking about what you might want to do if you are considering working in retirement.

Final Thoughts

There are some ways to help you boost your savings when you do not have enough money to retire.

I know some may sound extreme, and you don’t have to try all of them.

But you should try some.

Even if you can only save $50,000 for retirement, it is better than having nothing.

Sure, it might not be your dream retirement, but you will be thankful you have something saved.

It’s not too late, as long as you make an effort, starting now.