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How to Save 15% for Retirement Without Cramping Your Style

4 Minute Read

A recently published survey shows yet again how unprepared Americans are for retirement. According to the study by, more than one-third of adults are not saving anything for retirement. Even more alarming is the fact that more than 25% of pre-retirees (people ages 50–64) have no nest egg at all.

That sounds pretty hopeless, but it could be easier than you think to turn that trend on its ear. By investing $300 a month—about 7% of the average income—and keeping it up for just five years, you could retire with $260,000–435,000 in your nest egg in 30 years. That may not provide a four-star retirement, but at least it’s a start!

That means with a little planning and a more-than-average dose of motivation, nearly everyone can retire with at least enough money to cover their bills.


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Save Without the Sacrifice

Don’t get confused. We’re not saying you should invest $300 a month for the next five years and call it a day. To get the kind of retirement we all dream of, you need to consistently put away 15% of your income. But for right now, let’s just focus on that first $300. Where can you find $300 a month in your budget to get started on your nest egg?

Your first thought might be to slash your restaurant or entertainment budget or to get a second job. Obviously, if you’re overspending in those categories, cutting back is a wise choice. And extra income from a side job makes reaching any financial goal much easier.

But you may not have to completely sacrifice your time and your small luxuries. Here are a few painless but effective options you can consider to help you kick-start your retirement plan:

Roll In That Raise: Any time you get a bump in pay, it’s cause for celebration—not because you can buy more stuff, but because you can roll that money right into your retirement account! Employers project the average raise to be 3% this year—about $1,500 on the average $50,000 annual income. That works out to $125 a month! Getting a bonus? Shift that into your 401(k) or Roth IRA for an easy way to reach your goal without feeling the pinch in your paycheck.

No More Loans for Uncle Sam: The average income tax refund was $2,780 for the 2014 tax season. That’s a hefty sum to loan to Uncle Sam for a year. It just takes a few minutes to reduce your withholding amounts and start sending $230 more to your 401(k).

Rake In Cash With a Yard Sale: People spend more than $4.2 million at yard sales each week in the U.S. Get in on that action and sell some stuff! Put the profits toward retirement, where even $100 can turn into thousands of dollars in your nest egg.

Miscellaneous Moolah: Don’t forget about small expenses that can add up.

  • How about ditching your landline and just using your cell phone? You’ll have one less bill to pay and an average of $40 more a month to put toward retirement.
  • According to Consumer Reports, the average monthly cable bill will reach $123 per month this year. Switch to a streaming service for less than $10 a month, and you can easily add $100 to your monthly retirement investing.

Utilizing just a couple of these options has the potential to put you above your $300-a-month retirement investing goal—and those are just few of the possibilities. Get creative and see what else you can come up with. Keep in mind that this isn’t just a penny-pinching exercise. Every dollar you add to your monthly retirement investing means a more secure retirement for you!

Make Your Money Work for You

After all that work finding money to invest for retirement, the last thing you want to do is put it in a bad investment. A 401(k) with a matching contribution from your employer is a good place to start since it gives you an instant—and guaranteed—return on your money.

But don’t stop there. Add a Roth IRA for tax-free withdrawals in retirement and a wider selection of good growth stock mutual funds. Don’t follow in the footsteps of the majority of Americans who keep putting off their retirement savings. Find an investing pro in your area today!

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