How to Save for Retirement—No Matter Your Current Finances

Let's get this straight: You deserve the retirement of your dreams, but real life tends to blur that idyllic retirement picture in your mind. (Mine is beachside.) Roadblocks include the gender pay gap—where women earn, on average, 82 cents for every dollar earned by men—and the high cost of caregiving, whether it's for children or parents.

Rest assured, there's still time to act, whether you start saving for retirement at 25, 35, or 55. Whatever your retirement goals—maintaining your current lifestyle, upgrading, or making a dramatic move—we'll help you find the right path forward. Our experts guide you one step (and life stage) at a time.

If You Haven't Started Saving

You're not alone. According to a United States Census report, about 50 percent of women between the ages of 55 and 66 have no personal retirement savings. One key is to start as early as possible to take advantage of compound interest. If you invest $100 a month beginning at age 25—according to Gina Zakaria, founder of Saving Whiz, a financial education platform—you could have almost twice as much in your account by the time you retire compared to someone who started at age 35.

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See if your employer offers a 401(k) and matches employee contributions, which means your company adds matching funds up to a certain percentage of your salary. "Many people don't think about employer matching as part of their compensation, and they end up leaving a lot of money on the table," Zakaria says. "That's like saying, 'Instead of paying me $20 an hour, it's OK to pay me $17.'" Try to contribute at least enough to earn the full employer match.

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If you're a gig worker, entrepreneur, or independent contractor and don't have a company-sponsored retirement plan, certified financial planner Sarah Catherine Gutierrez—author of But First, Save 10: The One Simple Money Move That Will Change Your Life—recommends opening an IRA or Roth IRA. "If you make less than $60,000 annually, aim to save 10 percent in your retirement account," she says. "If you make more, consider a Simplified Employee Pension plan or a one-participant 401(k) plan, sometimes called a solo 401(k)." In any of these scenarios, the key is automation—embrace that set-it-and-forget-it mentality.

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Saving for retirement is a gift to your future self, but for present-day peace of mind, Gutierrez suggests you build an emergency fund: Aim to stash three to six months' worth of expenses in a high-yield savings account.

If You're Mid-Career and Your Spending Has Gone Off Track

You might be earning more money, but saving often takes a backseat when you're busy with expensive life events, like raising children, but stay with it. "Saving for retirement should be a higher priority than saving for your kids' college fund," Zakaria says. "Your child can apply for grants and scholarships, but you can't apply for those in retirement."

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Audit your current expenses, which may look quite different than they did several years ago. If your food-delivery spending has skyrocketed, for example, Zakaria recommends making a "dupe takeout" dinner, in which you recreate one of your favorite restaurant meals at home. "The difference can go right into savings," she says.

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List all your current and future priorities, and then create a high-yield savings account for each goal, advises certified financial planner Barbara Ginty, host of the podcast Future Rich. Give each account a nickname (like "house down payment") and automate contributions. Make sure each priority is worthy and that retirement is among your top commitments.

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Use pay raises wisely. If you nab a cost-of-living raise of 3 percent, Ginty recommends putting half of that raise into your retirement account to grow your nest egg.

If You're Over 50 and Need to Ramp Up Savings

"You have between 10 and 20 years to secure your future if it hasn't been a priority up to this point," Ginty says. "You're in the home stretch for retirement, and it is really important to be laser-focused,"

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Decide how much money you'll need to retire, and then work back from that number to determine how to save enough to get there, Ginty recommends. Consider hiring a pro to help you figure out that target amount and strategize. You might decide to sell an asset or increase your contributions, or you might want to work a bit longer, which could net you higher monthly Social Security payments down the road. Delaying your Social Security benefits until after retirement age can increase your payout by up to 8 percent per year, depending on your age at enrollment.

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After you turn 50, take advantage of annual catch-up contributions, which is the fastest way to boost your retirement account and reduce your taxable income. For example: In 2023, you could invest an extra $7,500 in your 401(k) account.

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If you're just starting to save for retirement, Gutierrez advises socking away 30 to 40 percent of your paycheck. That may trigger a major change, like moving into a smaller house or driving a cheaper car. You could even talk to your boss about working remote, which could allow you to move somewhere with a lower cost of living. If you feel held hostage by the routinized perks of your lifestyle— manicures, grocery delivery, and a weekly cleaning service—flip the script and say, "Retirement is the priority, and everything is measured against that right now."

If You've Recently Been Downsized at Work and Became Semi-Retired

This unfortunate reality can come as a shock and disrupt carefully laid plans, but keep your hands off that 401(k)! Your retirement plan is your most valuable investment, Ginty says, often worth more than your home.

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Review your credit and debit card statements, as well as your insurance policies, for opportunities to reduce or negotiate payments. "A lot of auto insurance companies give a 15 percent reduction if you do a safe-driver program," Gutierrez says. Consider the price of health insurance in relation to your current needs. It may cost less if you switch from COBRA coverage to a high-deductible insurance plan through your state marketplace. Run your new budget numbers to determine if you can still cover your annual cost of living.

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Start a paying side project to keep working in retirement. Think broadly about your experience and "imagine the wisdom you have gained from an entire career," Gutierrez says. Consider using your expertise—be it human resources or tech—to become a coach or consultant.

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Ensure your big-picture financial plans are still on track, whether that's paying off your mortgage by a certain age or full-time retirement in a few years. A layoff might trigger you to dip into your emergency fund, but leave your retirement account alone, and maintain that habit of saving for retirement.