4 Things You Must Do When Your Retirement Savings Are at 0

Thoughtful stressed young female sitting at kitchen table with papers and laptop computer trying to work through pile of bills, frustrated by amount of domestic expenses while doing family budget.
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If your retirement savings is at zero, don’t be too hard on yourself. It’s never too late to kickstart your retirement fund, and there are plenty of ways to hustle and build a comfy nest egg for your golden years.

It might also be comforting to know you are not alone in your procrastination. According to the latest survey by GOBankingRates, a whopping 29% of Americans haven’t even begun their retirement savings journey. 

Whether you’re fresh out of college at 22 or have hit the mid-fifties milestone and realize you need to hustle, check out these survey results and expert tips to help you jumpstart your journey to a sizable retirement fund.

29% of Americans Are Starting From Scratch in the Retirement Savings Game 

If you’ve yet to begin saving for retirement, you’re in the company of many fellow Americans. 

The majority of Americans (29%) have no retirement savings, while 20% have saved $1,000 to $10,000. Only 11% have saved $10,0001 to $25,000, another 11% have $25,001 to $50,000, and the same percentage falls in the $50,001 to $100,000 range.

Those with more substantial savings include 7% with $100,001 to $250,000, and 6% with $250,000 to $500,000. A mere 2% have saved $500,001 to $750,000, and only 1% have exceeded $750,001. A tiny 2% enjoy savings surpassing $1 million for retirement. 

Age-Specific Insights

When examining age groups, younger Americans face the highest likelihood of having no retirement savings, with 41% of those aged 18 to 24 lacking such savings.

As age increases, the percentage of Americans with no retirement savings decreases but remains significant: 28% for those aged 25 to 34, 23% for those aged 35 to 44, and 27% for those aged 45 to 54.

Make Your Money Work Better for You

Surprisingly, even individuals in their 50s and 60s are without savings, with 32% of those 55 to 65 not having started saving, along with 25% of those 65 and over. 

Gender Disparities

In terms of gender, women are more likely to have not initiated retirement savings compared to men. The survey reveals that 30% of women have $0 saved for retirement, while only 26% of men have yet to start saving.

How To Start Your Retirement Journey from Zero 

Here are four ways to start saving now if your retirement savings are currently at $0.

Boost Your Income

Living paycheck to paycheck can feel suffocating and make saving for retirement seem impossible. However, it’s crucial to remember that you can change your financial trajectory by increasing your income. 

“If you are on a budget and have just enough to cover your basic needs, then you will need to increase your income before retirement can even be a goal,” said Jay Zigmont, Ph.D., Certified Financial Planner (CFP) and founder of Childfree Wealth.

“If you are living paycheck to paycheck, focus on increasing your income and paying off your debt rather than retirement. You need a sound foundation before you can plan for retirement.”

Whether it involves searching for a higher-paying job, starting a side hustle or taking on a second job, enhancing your income is a pivotal step toward creating room un your budget for retirement savings. 

Embrace Budgeting

Effective budgeting is a fundamental strategy for freeing up resources to allocate toward retirement savings. By scrutinizing your income and expenditures, you can identify areas where you can cut back on non-essential spending and redirect those funds toward your retirement nest egg. 

Make Your Money Work Better for You

“I recommend keeping a strict budget until deeply ingrained habits are formed,” said Terrell Stauffer, CFP and financial advisor at Wealth Enhancement Group. “At that point, savings become second nature. This won’t be easy, and it will require sacrifice. This step may require selling a prized asset (really a liability) — a boat, four-wheeler, car, etc. — to rid yourself of debt. Accumulated debt will only accelerate the savings problem.”

Harness the Power of a 401(k)

If you haven’t started saving for retirement, taking advantage of a 401(k) with employer matching is essential for accelerating your savings.

“Take advantage of employer matching by contributing at least the minimum percentage to obtain the entire match,” Stauffer said. “This is instantly a 100% return on your savings! Plus, this money will come out of your paycheck directly without you having a chance to spend it.

“How much is the amount you need to contribute to get the full match? Under 401(k) Safe Harbor Rules, a familiar matching formula means that you need to contribute 5% of the total.”

Automate Your Savings 

If you tend to be an impulsive spender and struggle with saving money, automating your retirement savings can be a game-changer. 

“Another way to increase savings is to create automatic ACH drafts from your checking account to your savings account after your paycheck hits your bank account,” Stauffer said. “Again, this protects you from immediately spending the money you get”

What If You’re In Your 40s and 50s?

Even if you find yourself in your 40s or 50s with no retirement savings to your name, it’s not too late to start building your financial future. While it may require extra effort and lifestyle adjustments, the journey to secure retirement remains possible. 

Make Your Money Work Better for You

“At this point in your life, if you don’t have any savings despite being healthy enough to work in your 20s and 30s, then it means you overconsume and will now need to under-consume,” Stauffer said. “Rid yourself of all unnecessary expenses. Sell the second home and other liabilities to pay off debt and invest the proceeds. You are moving into the peak of your career. If you aren’t passionate about what you do, quit and find a job where you would love to work 60 hours a week. The savings start now!”

Methodology: GOBankingRates surveyed 1,037 Americans aged 18 and older from across the country between September 5 and September 7, 2023, asking fifteen different questions: (1) How much money do you currently have saved for retirement?; (2) How much money do you think you’ll need in retirement?; (3) How much do you spend or expect to spend monthly during your retirement?; (4) If you aren’t yet retired, how much do you expect to get from Social Security during your retirement?; (5) How much of your retirement do you plan to fund with Social Security?; (6) At what age did you or do you plan to claim Social Security benefits?; (7) Did you or do you think you will have to move to afford your retirement?; (8) Which of the following proposed Social Security solutions do you think would work best to prevent the trust fund from being depleted?; (9) What sources of income will you have in retirement? (Select all that apply); (10) How confident are you that you will have saved enough to afford retirement?; (11) If you retired early, at what age did you retire?; (12) Are you counting on help from your family (financial, housing, long-term care, etc.) to afford retirement?; (13) Do you think retiring around age 65 is financially possible for most Americans?; (14) What worries you financially about retirement? (Select all that apply); and (15) If you got a stimulus check in the last two years, how much of the money did you save for retirement?. GOBankingRates used PureSpectrum’s survey platform to conduct the poll.

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