Saving for retirement isn’t easy — especially when you’re juggling other financial priorities like growing an emergency fund or paying off debt.
I started my retirement journey 17 years ago when I was $300,000 in debt. My journey wasn’t quick, but fast forward almost two decades, and now I have enough saved to retire at 40.
The landscape has changed significantly since I made my first 401(k) contribution — and the retirement savings gap is even wider. It’s a problem most Americans are facing. A 2024 Principal retirement survey cites high monthly expenses (39%), paying off debt (34%) and insufficient income (34%) as the top reasons people aren’t contributing to their employer’s retirement plans.
As a money coach, I’ve seen how difficult it is for some of my clients to save for retirement while affording their other financial priorities. I’m sharing the tips I give my clients to help them prepare for their financial futures without getting overwhelmed.
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Saving enough to enjoy your retirement years is a challenge — particularly as housing and other essential costs continue to rise while wages fail to keep pace. Many of my students, ages 50 and over, have delayed their retirement plans because they simply can’t afford to live on their current savings. Others may have put off contributing to a retirement fund until their debt is paid off or their income increases.
In coaching thousands of people to reach their financial goals, the number one regret I hear is that they all wish they started sooner. There will likely never be a “perfect” time. However, there are steps you can take without depositing any money.
Open accounts now so they’re available when you’re ready.
Use features like “watch lists” to follow investments you’re interested in to learn their trends and nuances over time.
Pay down high-interest debt like credit cards to increase your cash flow. Once a debt is paid off, you can divert some of that money toward retirement savings while working on the next debt.
Follow money experts like those on the CNET Financial Expert Review Board for practical education and inspiration.
Talk to people you know who have successfully retired to remind yourself it’s possible.
The more you arm yourself with financial knowledge, the easier it will be to get started.
If you’re banking on Social Security benefits to carry you through retirement, I urge you to do research.
The government-funding program will likely be able to pay 100% of benefits for the next decade, but after that, retirees will get 83% of their benefits, according to the Social Security Administration’s 2024 annual report.
I learned firsthand that even now, Social Security benefits aren’t enough to cover monthly expenses. When my parents retired, they relied solely on these benefits. Once my father passed away, we learned that only a portion of his benefits would go toward taking care of my mother.
Even with full benefits, Social Security alone is rarely enough to cover medical expenses, and there’s even worry that the government-funded program will run out before millennials retire. My mom struggled with diabetes and a failing kidney, both of which required health care costs beyond what Social Security would cover.
To better plan, figure out how much you’re expected to collect from Social Security when you retire. The maximum monthly benefit for Social Security depends on the age you retire. For example, if you retire in 2025 at:
Age 62, your maximum benefit would be $2,831
Full retirement age, your maximum benefit would be $4,018
Age 70, your maximum benefit would be $5,108
The longer you wait to retire, the larger your benefit. If you need to retire earlier, your benefits will be less.
Regardless of age, the first place I recommend stashing your retirement funds is in a Roth IRA, or if your employer offers it, the Roth option in your 401(k). My biggest regret in my financial journey was not understanding the power of the Roth IRA sooner.
Since you contribute to a Roth IRA with post-tax dollars, when you withdraw funds in retirement, you won’t owe taxes on any of the money. More significantly (and what most people miss), you also won’t pay taxes on the growth you earn. That’s a huge benefit.
For 2025, you can contribute $7,000 total across all of your IRAs, whether traditional (pretax) or Roth (post-tax), and the limit goes up to $8,000 if you’re 50 or older. Contributing $7,000 a year may feel like a lot at first, but if you divide that by 365 days in a year, you would need to save $19.18 a day, or roughly $575 a month, to reach the IRS limit. The sooner you start, the more time your money will have to work for you, thanks to the power of compounding interest.
Let’s say you start with $0 today and invest $575 monthly to reach the $7,000 IRA maximum. If you continue at this pace for 10 years and earn a 10% interest rate of return, you will have an extra $111,562 to live off.
Roth IRAs do have income limits, though. For 2025, you’re phased out from contributing the full amount if you’re a single filer who makes more than $150,000 or a married, joint filer who makes more than $236,000 between you and your spouse. I recommend turning to a traditional IRA if you exceed the income limit to contribute to a Roth IRA.
Read more: Do You Have Retirement Money to Claim? This New Database Could Help You Find Old 401(k)s
Investing used to be much less transparent and a lot more complicated, even just a decade ago. We no longer have to settle for the expensive and confusing mutual funds that our parents and grandparents had to choose from. Instead, we can start saving for retirement within a few minutes, thanks to rapidly evolving digital tools and the accessibility of online banking and investment platforms.
I have a 401(k) through my company, and last year, I transferred my traditional and Roth IRAs from an antiquated financial services provider to Fidelity, which is more user-friendly and customizable and comes with education about each investment. Even if you’re not self-employed, check into your company’s investing platform to see what options are available to you. You may be able to take control of where you’re investing your money.
It’s been even more encouraging to see more environmental, social and governance metrics, aka ESG, options available for investors. For example, now you can choose retirement investments based on social or environmental factors such as a company’s carbon emissions, waste-management practices or commitment to employee diversity.
Our current high-rate climate can help you earn a little bit extra as you approach retirement. While a high-yield savings account should not be your primary retirement account, it can serve as a helpful supplement. Having at least one month’s worth of buffer savings in a HYSA can reduce your risk of pulling money out of your retirement fund when times get tough.
This buffer should include what it would cost to cover your housing, utilities, transportation, food and health costs so that you can start moving out of waiting for the next paycheck to pay your bills.
If your risk appetite is not quite robust enough to invest in the stock market, real estate or other alternative investing, certificates of deposit help me save a little more money while reducing the temptation to spend it immediately. CDs are a great entry point into investing for anyone anxious about losing money. They can help you diversify your overall assets, but you won’t earn as much over time as you would by investing in the stock market.
After you’ve maximized your contributions in tax-advantaged retirement accounts, if you’re ready to invest with a little bit more risk, consider investing with an online platform or robo-advisor to grow your money with index funds, exchange-traded funds and other investment types.
The biggest shift for me has been embracing that I have enough to retire.
When I started, I thought I had to hustle forever to make millions. But now, I know that financial freedom isn’t about hitting a number — it’s about clarity. As I worked toward retirement, I set clear values and built a budget that reflected them. Now, I’m scaling back on parts of my business I don’t enjoy as much intentionally and focusing more on heartfelt work and flexibility.
Retirement doesn’t have to mean you stop working altogether: it can mean you stop working because you have to. Now I get to work on what brings me joy, not just what pays the bills. I’m taking fewer meetings, making smarter choices with my time, and finally giving myself permission to rest. I’m also considering buying a small home to remove some of the rental cost over time, and we’re paying in cash.
The sooner you start your retirement savings journey, the faster your money grows. Even if you’re not ready to take the plunge and begin saving just yet, research different retirement accounts and brush up on different savings strategies to make prioritizing your future a little easier.
When you’re ready, plan to make regular contributions to stay on track and grow your retirement savings. That way, you’re in the habit of making contributions and can adjust your budget to accommodate your retirement savings, necessities and other financial goals.
