Saving for Retirement on Low Income
Saving for retirement can be stressful to think about but it is important to get ahead while you can.
Not saving for retirement or rather, not saving enough, can be detrimental to your lifestyle in the future. Wouldn’t you want to be able to relax and not worry about your money when you’re older? Here are 5 ways to start saving even if you don’t earn a lot of money.
Start small, start early.
You know what they say, the early bird gets the worm, the same goes when saving for retirement. It’s always better to start saving as soon as possible even if it is as small as $10 a month. If you start young, those small deposits each month will add up fast. However, when you do start saving, it is important to avoid making common mistakes which can hinder how much you are able to put towards retirement.
Contribute to your 401 (k)
401 (k) plans allow you to put money that is “pre-tax,” towards your retirement which may help you in the long run since less tax- money will also be coming out of your paycheck. Even if you can only afford to contribute a small amount per pay period, it will still add up over time. Take advantage of matching contributions from your employer, if they offer it, this can go a long way towards increasing your savings for retirement.
Live on a budget
Budgeting is a big way to make sure you have some leftover money to put towards your retirement. Knowing what you are spending also means knowing what your saving, giving you the freedom to put money towards your retirement or other things. While budgeting, it is also important to avoid falling into common traps which can potentially make you spend more and even go over your budget. Going over budget may force you to dip into your retirement savings which can have a negative impact in the long run. Living on a budget may also help keep you from living paycheck-to-paycheck which in turn will also help allocate funds for your retirement.
Cut Costs Where You Can
Everyday lifestyle costs such as electric, cable, even high-interest credit cards can be cut down if you try hard enough. You can try things such as negotiating with your providers/ creditors or switching to another company. These small savings add up greatly over time and tricks such as this will give you money you wouldn’t have had before. Since this money wouldn’t have been included in your monthly budget, you can then automatically put it towards your savings for retirement.
Saving for retirement can be a stressful task, but taking small steps such as these can alleviate that stress and even boost your savings in the long run. Everything you save will add up quicker than you think. Have questions about more ways to save on low income? Know any more tips? We’d love to hear your stories and ideas! Share them in the comments below.