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Think You Can’t Afford to Save for Retirement? These Tips Can Help Even Lower-Wage Workers Set Money Aside

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It’s not surprising to read that many seniors are approaching retirement with little or no savings set aside. In fact, just recently we presented a story here on the Blog describing how money woes are impacting Americans’ mental health. If you’re already retired, or within a few years of stopping regular work, you might think it’s too late for you to do anything about your lack of savings – but fortunately, that’s not entirely true.

In this recent NextAvenue article, freelance writer Rachel Leland gives us some tips on how even those making lower wages can still set aside some savings to provide a bit of a cushion in retirement. Some of these suggestions apply to those still earning a paycheck, while others can benefit just about anyone. As we read this article, it occurred to us that saving money is like exercising: doing something is better than doing nothing, and starting today is better than waiting until tomorrow.

Americans Struggle to Save for Retirement

The numbers show that working class Americans are struggling the most to aside savings for their eventual retirement. Leland writes, “Some 68 percent of respondents in a National Institute on Retirement Security study said the average worker cannot save enough on their own to have a secure retirement. According to the same study, 65 percent of current workers say it’s likely they will have to work past retirement age to have enough money to retire.”

It’s true that many companies offer programs to help with retirement savings, such as 401(k) plans and company-matching, but researchers at the Wharton School of the University of Pennsylvania have found that this isn’t always the case. In fact, “56 million private-sector workers lack access to retirement savings plans through their jobs,” Leland writes.

In other words, those seeking to save may have to do some homework to find good options.

Some State Programs Streamline Saving for Wage-Earners

There are state-sponsored solutions in the works in many locales. Leland explains, “To create new channels for retirement savings, eleven states (plus the City of Seattle) have launched automated savings programs and more states are joining them, such as North Carolina, which is considering a state-sponsored retirement savings account called Work & Save. In California, Connecticut, Illinois and Oregon, which have all implemented such programs and started regular paycheck withdrawals, average savings rates are about $140 a month per worker.”

The way it works in these state-sponsored programs is that employees who work for companies that do not offer retirement savings plans are automatically enrolled, but can opt out if they choose to. In some versions of the program, like California’s CalSavers, employees can choose their contribution rate and can even change their investments.

Leland offers the following as suggested strategies for setting aside regular savings for retirement, even if you’re struggling to do so.

Save More Money by Creating Less Waste

One place to start is the kitchen. Leland writes, “According to the U.S. Bureau of Labor Consumer Expenditure Survey in 2022, Americans spent an average of $438 on food per month, or roughly $5,250 a year. Meanwhile, U.S. households waste almost one-third of the food they buy, according to Penn State University researchers.”

She adds, “That means nearly $1,700 worth of food an average family buys each year ends up in the trash.”

Andrea Woroch, a consumer finance expert, recommends planning a week’s worth of meals and buying only what you plan to eat as a way to keep grocery costs—and waste—to a minimum. “It also helps to look for recipes that share ingredients so you won’t have to throw away, say, half a can of tomato paste,” Leland writes.

Woroch herself explains, “By planning out meals, cross-referencing your ingredient list with what you already have at home so you don’t double up, limiting how much fresh food you buy in bulk and avoiding impulse purchases, you could save almost $2,000 over the course of a year. Meanwhile, using rewards apps like Fetch will give you cash back for your grocery purchases that you can use to offset your future purchase needs and stash it away.”

A related idea: retirees can work out meal plans with their retired neighbors and plan grocery lists together. Buying food in larger packages is generally a money-saver.

If Saving is Overwhelming, Ask for Advice

The good news is that you don’t have to go it alone when it comes to savings. Seeking out expert advice can save you from costly mistakes.

Health care can top the list of budgetary expenses for retirees or older adults. Retirement consultant Marcia Mantell recommends setting up time with a local State Health Insurance Assistance Program counselor for a free-of-charge session. In this session you can discuss options reducing your health insurance premiums and other health care costs, like prescription drugs.

Leland writes, “You should also check to see if your city has an Aging Network location near you. The Older Americans Act of 1965 created the Aging Network, a national network of agencies that provide services for older adults including financial assistance, home repair, legal assistance and nutrition services.”

(Note: here’s a link to the Aging Network agency in King County, Washington, the home of AgingOptions and Life Point Law.)

Tapping into local resources is one of the best ways to minimize the drain on your finances that day-to-day expenses can be. This way, you’ll have more left over to put away for retirement.

Make Catch Up IRA Contributions if You Qualify

It’s also important to note that you can make up for lost time. If you haven’t been making regular contributions to your 401(k), catch-up contributions are your friend.

“According to the IRS, catch-up contributions are elective deferrals made by a participant aged 50 or older that exceeds a statutory limit, a plan-imposed limit, or the actual deferral percentage test limit for highly compensated employees,” Leland explains.

“Take advantage of catch-up provisions in employer-sponsored plans and IRAs if you’re over the age of 50,” says Donny Gamble, CEO of Retirement Investments. “You can contribute an extra $6,500 to your 401(k) each year or up to an $1,000 to an IRA in most cases.”

Start Small if You Must – but Start!

Leland agrees with our assertion from the intro: no matter where you are in this journey, the important thing is just to start!

Gamble recommends starting small. Open a retirement account and contribute only what you can, even if it’s just $50 or $100 per month. Every little bit counts, and these amounts add up over time. And occasionally you might be able to add a bit more. “Consider setting aside any windfalls, like bonuses or gifts, for the future rather than spending them immediately,” Gamble adds.

Leland concludes, “If you do happen to work for an employer that offers an employer-sponsored retirement plan, take advantage of it if you possibly can. Employer matching programs are a source of free money that stretch your contributions, and 401(k) plans can reduce your tax liability at the end of the year as well as your tax withholding each pay period.”

Breaking News: Rajiv’s New Book is Here!

We have big news! The long-awaited book by Rajiv Nagaich, called Your Retirement: Dream or Disaster, has been released and is now available to the public.  As a friend of AgingOptions, we know you’ll want to get your copy and spread the word.

You’ve heard Rajiv say it repeatedly: 70 percent of retirement plans will fail. If you know someone whose retirement turned into a nightmare when they were forced into a nursing home, went broke paying for care, or became a burden to their families – and you want to make sure it doesn’t happen to you – then this book is must-read.

Through stories, examples, and personal insights, Rajiv takes us along on his journey of expanding awareness about a problem that few are willing to talk about, yet it’s one that results in millions of Americans sleepwalking their way into their worst nightmares about aging. Rajiv lays bare the shortcomings of traditional retirement planning advice, exposes the biases many professionals have about what is best for older adults, and much more.

Rajiv then offers a solution: LifePlanning, his groundbreaking approach to retirement planning. Rajiv explains the essential planning steps and, most importantly, how to develop the framework for these elements to work in concert toward your most deeply held retirement goals.

Your retirement can be the exciting and fulfilling life you’ve always wanted it to be. Start by reading and sharing Rajiv’s important new book. And remember, Age On, everyone!

(originally reported at

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