How To Turn Your $50K Salary Into a $1M Retirement Fund
Written by
Caitlyn Moorhead
Edited by
Gary Dudak
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Ask Americans why they don’t have money set aside for their future, and many will answer that saving for retirement isn’t a priority for them. In fact, it’s estimated that many have $10,000 or less saved for retirement, which is far from the $1 million many financial planners would recommend you have in your nest egg before you stop working.
There could be plenty of reasons why saving for retirement isn’t key for them, but a big one might be that many people are prioritizing other expenses — especially if they need to stretch a small paycheck. Another big factor is economic uncertainty, and with the current volatile market, looming tariffs and the general spike in cost of living, saving over spending is easier said than done.
So, how do you manage to get by and save for retirement without a big paycheck? If you earn $50,000 or less a year, find out how to retire with $1 million with these nine tips.
Make a Commitment To Start Saving For Retirement
If saving for retirement isn’t a priority for you, consider this: If you’re struggling to get by now on a small paycheck, how will you get by in retirement without savings and no paycheck? You don’t want to retire broke and live on Social Security benefits alone.
Not to say that it isn’t challenging to build up a nest egg big enough to feel financially secure, but one thing is for sure, you’ll never get to that point if you don’t try. This takes commitment to your savings and investment strategies.
To ensure you follow through on your commitment to saving, let your family or friends know about your financial goals, so they can hold you accountable. Start saving as soon as possible as the sooner you start saving, the less you’ll have to set aside each month to save $1 million for retirement — which is good news if your income is low.
If you start saving at age 20, you could set aside less than $300 a month and have $1 million by age 65, assuming a 7% annual return. By starting at this younger age, you’d need to save half as much each month as you would have to if you waited until 30 and about one-fourth as much if you waited until 40 to start building a $1 million nest egg.
Know Your Number
You might be asking yourself, “How much do I need to retire? Do I really need to save $1 million?” The answer will vary from person to person. Though having that much saved for your golden years would be great, it’s not a one-size-fits-all financial situation. Many people can live comfortably with a much smaller figure and some careful planning.
So, the first thing you need to do is calculate how much you need to have to retire and how much you should save each month to reach that goal. There are plenty of free online retirement calculators — such as those at Fidelity, Schwab and Vanguard — that can help.
Once you know how much you need to set aside each month to reach your savings goal, you can create a plan to make it happen. That way, whatever you have padding your bank account with will be in addition to your Social Security benefits.
Edit Your Budget and Save Consistently
If you’re making less than $50,000 a year, you might be wondering how you can find room in your budget to save several hundred dollars a month. First, you can switch your mindset to wanting your financial freedom as much as you want that daily coffee. For example, if you spend an average of $12 a week on coffee or tea, that’s $624 a year.
By cutting unnecessary or unused expenses such as streaming services, gym memberships or cable packages, you might be surprised just how much room in your budget you really have. Sure, staying in one night and making food at home won’t put a million dollars in your savings, but making a million decisions just like this could.
One way to ensure that you invest and save consistently is by setting up an automatic transfer from your bank to your investing account. This keeps your money earning for you instead of working against you.
If your employer offers a workplace retirement plan such as a 401(k), you can have contributions automatically deducted from your paycheck. If you were automatically enrolled in your employer’s plan, check your contribution amount to make sure you’re saving enough each month to reach your savings goal (experts recommend 10%).
If you don’t have access to a workplace retirement plan, you can save for retirement on your own by setting up automatic transfers from your checking account to an individual retirement account, such as a Roth IRA or a solo 401(k) if you’re self-employed.
Take Advantage of Matching Contributions From Your Employer
A great way to boost your retirement savings is to find out if your employer will match your contributions to your workplace retirement account. But, typically, you have to save a certain percentage of your income to get the full match.
Many Americans miss out on this free money because they don’t contribute enough to their retirement plan to get their employer’s full matching contribution.
Save Your Tax Refund
If you get a big tax refund, you should put that money into retirement savings. The average refund for the 2025 filing season was $3,116, according to the IRS. If you earn $50,000 a year, stashing a refund of that size would be equivalent to saving about 6% of your income.
Or, you could adjust your tax withholding by filling out a new Form W-4 to put more money back into your paycheck each month rather than getting a big refund each spring. Then, use that extra money in your paycheck to boost your automatic contribution to your 401(k) or workplace retirement account.
Get a Side Gig To Boost Savings
Another way to come up with more cash to retire with $1 million is to get a side gig to boost your income. Many financial advisors recommend finding a second job and stashing those earnings into a retirement or investment account.
You could open a Roth IRA and contribute up to $7,000 a year to help save efficiently for your future. The big benefit of this account is that you can withdraw money tax-free in retirement. Withdrawals in retirement from a 401(k) or traditional IRA are taxed as regular income.
Choose Investments That Offer Growth
To increase your chances of having $1 million in retirement, you need to invest your savings in assets that will grow. Not that a savings account isn’t a good idea, it’s just you’ll need more than that to get rich. Consider participating heavily or totally in the stock market, ignore and focus on the fact that stocks have historically proved to be a better-performing asset class over bonds and cash, if you play the long game.
That doesn’t necessarily mean it’s up to you to pick the right stocks, though. See if your 401(k) or workplace retirement plan offers index funds, which track the performance of a broad stock market index such as the S&P 500. You can also look into putting money in safe, high-return investments to start your investment journey.
Opt For Alternative Investments
If you make less than $50,000 a year, there’s only so much you can afford to set aside in savings each month. So rather than save your way to $1 million, build your net worth through investing in real estate or starting a business. Simply put, think outside the financial box.
Don’t assume your lower income limits your ability to pursue either of these alternative assets. You don’t necessarily have to have money to start a business. You just need an idea, and you have to be willing to put in the hard work to make it happen.
Don’t Tap Retirement Savings Before You Retire
You can cash out a 401(k) when changing jobs, but that will seriously hurt your chances of saving $1 million for retirement; in fact, it can be downright destructive to your retirement security.
Not only will you have to pay state and federal income taxes, but you will also have to pay a 10% early withdrawal penalty on the money you withdraw. Plus, most people don’t go back and replace what is withdrawn. So, they miss out on investment earnings.
To avoid having to tap retirement savings — whether it’s to get you through a period of unemployment or to pay for emergencies — experts recommend that you build an emergency fund. Set aside cash in a savings account each month so you can access if you’re hit with an unexpected expense. A good amount to start with is at least three to six months’ worth of expenses in the fund.
Cameron Huddleston contributed to the reporting for this article.
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