Straight Talk About Retirement Savings—What To Do When You’re Behind

Jen Williamson Updated on May 8, 2019

When the conversation turns to saving for retirement, do you suddenly clam up?

It can be embarrassing to admit that you’re in your 30s and you aren't on track with your retirement savings. But here's the good news: if you have even a little in your retirement account, you're actually ahead of a lot of people. Approximately half of Americans don’t have any retirement savings at all.

Experts say that you should have at least a year’s worth of savings in your retirement account by the time you hit 30. But let’s be real. Between student loans, a tough job market, and all the other expenses we get hit with, how is that even possible?

The thing is, it is possible. But time is of the essence. You have to start now.

Here are a few things you can do to catch up.

Take advantage of your company’s match

Some employers will match your 401(k) retirement savings up to a certain percentage—like 3% or 6% of your paycheck. Whatever that number is, sign up to get the full amount. Do it yesterday.

That money is basically free. If you’re not getting the full match, you’re leaving it on the table.

Take a look at your spending

Do a full audit of what you spend. We know ... it's the least-fun financial advice out there, but it can be very illuminating. 

First, write down the large, unmovable monthly expenses—non-negotiable things like rent, food, utilities, and your student loan payment. Get a sense of what you spend on the bare-minimum expenses.

Then, figure out what you spend in a typical month on discretionary costs—things like going out with friends, eating at restaurants, entertainment and shopping. Stuff you don’t need, but want to do or have. 

Is there anything really obvious that you're spending too much money on, that it would be easy to cut back on? Something like a daily trip to the Starbucks that costs you $150 a month?

See if there’s any wiggle room to cut back on your discretionary spending and carve out a little more for your retirement. Could you afford to put in $100 more a month than you do now? How about $200?

See Also: The 30/30/30 Plan: How to Save $30k by Age 30 on a $30,000 Salary 

Take a closer look at your big expenses

Sure, you could cut out your daily latte habit to save for retirement—but you’ll free up far more cash if you reduce your larger expenses. Stuff like rent, car payments, or your student loan.

Is there a big change you could make in your life right now that would save some serious cash? Something like taking on a roommate or moving to a cheaper place? Nobody wants to make these changes—but if you do, you could save a lot. 

It doesn’t have to be this hard, though. We’ll even toss you a softball—a big change you could make right now that isn’t that painful.

Refinance your student loan

We’re giving this its own subhead because it’s that effective.

If you have a lot of student loan debt and good credit, you could score a significantly lower interest rate by refinancing. This is true of both federal and private student loans.

According to our own data, people who refinance save around $259 a month, or $19,231 over the life of the loan. That’s a lot of money you could be socking away for retirement.

You can make your refinancing and retirement goals work hand-in-hand. Refinance, see how much you save every month, and set your account to automatically put the difference in your retirement account.

Find out how much you could save by refinancing now.

Imagine Life Without a Student Loan Payment... Start Saving Now!

Set your retirement account to deduct automatically

If you don’t already have  a retirement account through an employer, now's the time to open one.

There are many types of retirement accounts. If you have one through an employer, chances are it’s a 401(k).

Other types of accounts include IRAs, in which your contributions are tax-deductible but you pay taxes on the account once you start withdrawing; and Roth IRAs, in which you pay the taxes upfront but your withdrawals aren’t taxed later.

Whichever account you choose, set it up to deduct automatically from your savings. That way you can’t decide to stiff your retirement account whenever you’re feeling broke. 

If you go ahead and refinance your student loan, you could even take the amount you saved and set your retirement account to deduct the difference from your checking account. That way you don't feel the pinch--you're used to paying that much to your student loans anyway—but now it will be you getting paid, not your lender.

If you're in your 30s, you still have about three decades to save for retirement. Hope is not lost. Take a look at your savings, find some ways to cut spending, and set your retirement account to deduct automatically—and you should be able to build up a decent amount of savings over time.

Get more financial advice about your financial future

See also: The 30/30/30 Plan: How to Save $30K by Age 30 on a Salary of $30K

About the Author
Jen Williamson

Jen Williamson is a freelance writer living in Brooklyn. She has written for a variety of industries, including software, education, business, and personal finance. Prior to that, she worked at an adult literacy nonprofit in Philadelphia, where she coached nontraditional students in passing the GED test and applying for college. When she isn’t writing or reading—which is rare—she can usually be found planning her next travel adventure, training for a marathon, or sneaking in somewhere she’s not supposed to be. Read more by Jen Williamson

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I reduced my student loan payment by $152 per month, by refinancing thru Nitro:

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