How To Save For Retirement With No Extra Money

save for retirement

How can I save for retirement if I’m not making any extra money? We’re screaming toward the future at a million miles a minute. Pretty soon, you’ll be facing retirement before you know it, and possibly without enough cash when you need it most….

It’s nailed into our heads we have to work our asses off just so we can stop and do nothing for a good 30 years of our life.  And who’s responsible for paying for you once you drop out of the workforce?  Yeah, that’s you. 

Oh, and if you believe the trends, there most likely won’t be much in that Social Security fund when you get there. Perhaps you’re already there or you’re already thinking about the end of the line. It’s time for you to figure out how to make ends meet for a long, long time.

How do you save for retirement when you’re broke? 

The simplest answer is: The same way you save for normal stuff when you’re broke!  

There are a few differences, because retirement lasts longer, but you can still shunt away cash into your savings accounts and other investment vehicles.

How Much Do You Need To Save For Retirement?

Before you start saving for retirement, it really helps to have a goal in mind.  You want to look at many factors in your retirement planning.

  • When do you want to retire?
  • How much cash do you want to live on when you retire?
  • How long do you expect to be using those savings?

That third one’s a doozy, as you’re asking yourself how long you’re going to live.  In the US, the expected lifespan is 79.8 years.  Round that up to 80 just for the sake of making the numbers round.

If you traditionally think of retirement as happening at 65, that means your money needs to be there for around 15 years.  The numbers are all yours, of course.  Some people don’t expect to retire at all or prefer to keep working, and some folks want to start their retirement lifestyle early.

How Much Do You Have Now?

With the answers to the questions above and some basic math, you’ve probably got a healthy idea of how much you’re going to need for retirement for each year.  The next question is an assessment of where you are now.

  • Look at what you make in your current job,
  • Add up the savings you’ve got,
  • Include assets you have, 
  • Investments which you have already made,  
  • Examine your debts, too. 

You want to get a thorough picture of your financial standing.

Knowing where you stand will help you figure out where you can go.  After getting an understanding of where you are, it’s time to go on to the next question.

What Can You Do Right Now?

Take a few moments to think about this.  Planning for retirement is a little harder than planning for a new car, since it encompasses many more years, but you can do it. Here’s some ideas to kickstart your mind.

Increase your retirement fund contribution – If you’re still at a regular job, one of the best things which you can do is increase your retirement contribution.  While the hope is you can get more by the end, you are usually assured of getting all of your money you did put in back when you retire. Increasing your contribution through your employer takes only a quick trip to HR.

Turn down the air conditioning/heating – Now I don’t mean to make yourself uncomfortable , but whether it’s hot or cold, a day of air conditioning in the house adds between $10-20 to your power bill in some areas. Sock that away in an retirement account. Over time, that money can be significant.

Research money market accounts – Money market accounts are low yield accounts which are quite handy to have.  While it’s only slightly inconvenient to withdraw from the money market accounts, they do keep cash out of your hands long enough so it can grow. Put the money you’re setting aside into this while you’re researching investment options.

Investigate refinancing – One of the biggest boons that we received was through a tip from our mortgage broker: think about an FHA refinancing loan.  This option was perfect because it immediately cut $100 per month off of the mortgage without adding too much on to the back end.

Find out what social security will give you – You might have been contributing to Social Security for a long time, and knowing your monthly stipend when you retire will give you an idea of how much more that you need to save. Just visit ssa.gov and you can get a statement.

What Can You Do Today For Retirement?

What can you do today to help save for your retirement account?  You’re more likely to be spending money out of the house than in it. Guard yourself. While you’re out of the house and thinking about grabbing that hamburger or that drink on the way home, ask yourself whether that’s more important than your retirement. Read up on how to control impulse spending. Simply stepping back and thinking about large impulse spending can help you rethink them and realize it’s not necessary.

Is THIS thing I want more important than my retirement?

If you answer yes, then so be it.  If you answer no, then put the money aside into a savings account, a jar, or your piggy bank.  Pause before every purchase that you make, including those made during the course of paying bills, and you’ll gradually accrue retirement funds.

How Can I Make More?

How can you make more money?  There are plenty of ways that you can make more money to put away for retirement. 

There are two basic ways to make more money:

  • Get a raise from what you’re currently doing
  • Create a brand new income stream

Both ways are definitely feasible, depending on your skills and the time that you want to leverage to make it happen.  There are ways to create passive income just as there are ways to create active income, and the choice is yours as to which one you’ll pursue.

So when you start to save for retirement, it isn’t just about the 401K or the retirement funds you’ve got set up.  Yes these will work but you have to be in the long term mindset and for some this is hard. What I want you to take away from this article is saving for retirement is a collection of things, mindset, additional income opportunistic, saving, and investing correctly. Out of all of those, it’s mindset you have to master. Because when you put your mind to it, all the other things are tools and products that will always be available to you. It’s up to you to pull the trigger, write out a plan and stick to it…And you will get rewarded.

Thanks for reading this far, I hope you got some great value, as always I welcome your comments below and please share on social media with your friends and family.

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