How to Start Saving for Retirement on Any Budget

This illustrations shows profiles of various people of different ages and ethnicities.
Getty Images
Some of the links in this post are from our sponsors. We provide you with accurate, reliable information. Learn more about how we make money and select our advertising partners.

For a lot of us, retirement is a best-case scenario. Let’s face it, you won’t be able to work forever, and hopefully you’ll keep living long after your last workday.

But what will that really look like? Can you afford that? If you’re like most Americans, you suspect you’re not saving enough for retirement.

No matter how much — or how little — you make, it’s never too late to boost your savings. But you shouldn’t put it off any longer. 

Here are six steps you can take to make your retirement sweeter — no matter your budget:

1. Get All the Free Money You Can

If your employer offers a retirement plan like a 401(k), what are you waiting for? You definitely want to take full advantage of your employer’s matching contribution to your 401(k) plan. 

A 401(k) is a retirement account that’s sponsored by your employer. It’s tax-deferred. That means you invest part of your paycheck before you’ve paid taxes on it and then pay taxes when you withdraw money in retirement. What makes it especially attractive is that many employers will match your contributions — in whole or in part  — up to a certain percentage of your earnings.

“Take advantage of your full company match,” Jeff Dixson told us. He’s a financial adviser in Vancouver, Washington, who hosts a radio show called the Retirement Coach. “If they match 3%, contribute 3%. If they match 6%, try to get to 6%. That’s free money. There’s nowhere else you’re going to get free money.”

2. Invest in Real Estate — You Only Need $500 

In addition to your 401(k), letting your money work for you through investments is a great way to set yourself up for retirement. One of the most lucrative places to invest is in real estate — it’s a strategy tons of wealthy people use. OK, so maybe you’re not uber-wealthy, but that doesn’t mean you can’t prepare for retirement like the 1% does.

A company called DiversyFund will invest your money in commercial real estate — specifically, in apartment complexes that it owns — and you only need $500.

Real estate can potentially earn you more money than the stock market. Over the long term, investing in the stock market will earn you an average annual return of 7%, adjusted for inflation, according to a number of studies. Diversyfund can’t guarantee how its investments will perform in the future — no one can — but historically, it has earned an annual return of 17% to 18%.

So you don’t need a fortune to invest in real estate. All you need to get started is $500, and you can start investing for retirement like the wealthy do.

3. Start Small by Investing Your Digital Change

Maybe you’re just getting started saving for retirement and you don’t have a ton of money to invest. That’s OK — you don’t have to go big right away. Get in the habit of socking away a little money. Everything helps. In fact, that leftover change from your morning coffee and evening grocery hauls could turn into more than $1,000 before you know it.

That’s what happened when Penny Hoarder reader Jeremy Kolodziej opened an investment account with Acorns. The app’s round-up feature bumps each of your purchases up to the nearest dollar and puts the spare change into the stock market, which helped him mindlessly save $1,076 in about 20 months. 

“It’s a virtual coin jar,” he says. “You don’t even think about it.” 

Plus, Acorns invested the money for him, allowing him to grow his savings — without studying stock prices or managing trades. It’s a great way to dip your toes in the investing world and start saving for retirement, even if you don’t have a ton of money to work with.

The app is $1 a month for balances under $1 million, and you’ll get a $5 bonus when you sign up.

4. Launch Your Investing Portfolio with $5

Maybe you’re ready to invest a little more proactively. There’s a great way to do that without needing thousands of dollars. In fact, you can get started with just $5 with with an app called Stash.

Stash lets you choose from hundreds of stocks and funds to build your own investment portfolio, but they make it simple by breaking them down into categories based on your personal goals. 

It takes just two minutes to download the app and sign up, and then it costs $1 per month for balances under $5,000.

And if you sign up now, you’ll get a $5 sign-up bonus. Like any investing, the earlier you get started, the more you can earn. 

5. Get the Most out of Your 401(k)

So we’ve established that you have a 401(k) — kudos for that, but is it doing what you need it to?

If you’re like most people, you have no idea whether your 401(k) is on pace for your retirement or just sputtering along.

Chances are, your 401(k) could be doing a lot better. Take control with help from Blooom, an SEC-registered investment advisory firm that can optimize and monitor your 401(k) for you and keep it speeding toward retirement.

It just takes a few minutes to get a free 401(k) analysis that will show you whether your investments are allocated properly and whether you’re losing money paying hidden investment fees. It’ll even tell you just how much more money your account could earn by the time you want to retire. 

After that, if you sign up, it’s just $10 per month to have Blooom monitor and maximize your 401(k). Bonus: Penny Hoarders get a special rate of $99 per year with the code REEETIRE.

Think of Blooom like a mechanic constantly fine-tuning your car’s engine so it gives you the best possible performance and gas mileage. Except it’s your 401(k) — and your future.

6. Catch Up After 50

It’s never too late to play a little catch-up.

If you’re age 50 or over at the end of this calendar year, you can make annual catch-up contributions to your 401(k) account, bypassing the legal maximums.

In 2018, the federal government raised the personal 401(k) contribution max from $18,000 to $18,500 annually. People in their 50s and 60s can contribute an extra $6,000 per year — if they’re able to.

The bottom line: It’s never too late to start thinking about retirement, and it’s never too early to start thinking about retirement — no matter what your budget looks like.

Mike Brassfield ([email protected]) is a senior writer at The Penny Hoarder. He does not have enough saved for retirement.