How to Save for Retirement When You Make Under $50,000


One of the most common misconceptions about life is that you cannot possibly save for retirement when you don’t make that much money to begin with. It’s not easy to live on a small income, but many people do it. There are those of us who cannot imagine saving for retirement and living on less than $50,000 per year, and there are those who have no problem doing either (at the same time, too). Basically, it all depends on our life choices, our personal circumstances and our ability to live life in a way that’s both affordable and creative.

Could I live on less than $50,000 per year? The simple answer for me is no; I cannot. I have four kids, a husband and we have a certain lifestyle we enjoy. I don’t know how people live on any 5-figure salary, but I also know that we are all different. I suppose that if I had no choice I would make it work, but I like certain things and I’m not willing to sacrifice the kind of lifestyle we live. The point, however, is that once we all take a moment to get over ourselves, we can see that there is a way to save for retirement even when your income is not substantial. For instance, if you want to retire in senior independent living residences such as The Chelsea at Warren independent living or The Chelsea at Bald Eagle, you want to have money that will be able to fund your lifestyle there while still enjoying. Visit sites like or to get an idea.

Let me tell you a few secrets from the people who work hard, get paid very little and still manage to save for retirement. If they can do it, there is no reason you can’t.

Remember that every little bit helps

When you stop and take a moment to remember that every single dollar you put into a retirement account is helpful, it makes saving on a small budget that much simpler. Even if you can only afford to put away $100 per month, it’s $100 per month you did not have in retirement savings before. Let’s say you are 24 and you want to retire at 65. Even if you never contribute more than $100 per month to your retirement account (you need to, okay?), you would still have $49,200 in that account that you didn’t have otherwise. Of course, your account will earn more money over the years, so that’s just base.

Take advantage of employer match

Does your employer match whatever you contribute to your retirement account? If they do a 50% match, you have a lot of free money coming your way. Let’s use the same math we did above. If you contribute $100 per month to your retirement for the next 41 years (from age 24 to 65) and they match it by adding an additional $50 per month to your account, you’re getting $24,600 in free money from them for the next 41 years of your life. That is not something to laugh about, to be quite honest with you. Every little bit helps. If you can max out their contributions, go for it. You can put away as much as you can, but see if you can find a way to add more to your retirement over the years.

Take advantage of tax breaks

There are certain types of retirement accounts that work well for anyone who has money to put away. For instance, if you contribute to an IRA, you put off paying taxes on that money. That is serious savings throughout the year that can be added to your retirement account when the tax bill is due and much less than you thought it might be otherwise. These little things are often the ones that make the biggest differences in your financial life, and it’s going to be something that you appreciate in the future.

Find A Way

Here’s the simple truth that many working class citizens don’t want to hear; when you don’t make much money, you can’t afford to spend it frivolously. We aren’t saying you can’t go to Starbucks and treat yourself to the beloved Pumpkin Spice Latte, but we are saying you should not do it every single day. Instead of spending $6 every day, do it once per week and put that other $24 into your retirement account each week.

The simple fact is that you can afford to save for retirement if you have things like a coffee budget and a cable television budget when neither are essential and both are expenses you can easily get rid of without sacrificing the quality of your life as a whole.

Saving for retirement on a small budget might not be easy, but it’s also not impossible. You can it if you take the time to really get to work and make sure that you can add something. Take those income tax returns you get, those unexpected windfalls and whatever else you need to make your retirement account grow and add to it when you can. Every little bit helps.

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