You Don’t Have a Retirement Savings Plan: Why That’s Risky and How to Start One Today

If you’ve made it this far in life without a retirement savings plan, you’re not alone—and you’re certainly not doomed. Whether you’re in your 20s, 40s, or even approaching retirement age, the important thing is not how late you start saving—it’s that you start at all.

According to recent surveys, nearly 40% of working-age Americans have little to no retirement savings. Many live paycheck to paycheck, prioritize daily expenses, or simply feel overwhelmed by the complexity of financial planning. But here’s the reality: Social Security alone is not enough to fund a comfortable retirement. Without a plan, you risk outliving your money, depending on others, or being forced to work longer than you’d like.

The good news? It’s never too late to take control of your financial future. This guide will walk you through why saving matters, the types of retirement accounts available, how to start—even with limited income—and tips to stay consistent as you build toward retirement security.

Step 1: Understand Why Retirement Savings Matter

It may feel like retirement is too far off to worry about now—or too close to catch up. But without a dedicated retirement plan, you may face:

• Limited income once you stop working
• Difficulty covering healthcare or long-term care expenses
• Inability to travel, relocate, or live comfortably
• Dependence on family or public assistance

While Social Security can help, the average monthly benefit is just over $1,800 (as of 2024)—not enough for most to live on independently.

Even modest savings, invested wisely, can grow significantly over time thanks to compound interest. For example, saving just $200/month starting at age 35 could result in over $200,000 by age 65 (assuming a 6% average annual return).

Step 2: Know Your Retirement Savings Options

There are several tax-advantaged accounts designed specifically to help you save for retirement:

1. 401(k)

• Offered by many employers
• Funded through payroll deductions
• May include employer matching (free money!)
• Contributions are tax-deferred (you pay taxes later)
• Higher contribution limits than IRAs

2. Traditional IRA (Individual Retirement Account)

• Open to anyone with earned income
• Contributions may be tax-deductible depending on income
• Taxes paid when you withdraw in retirement

3. Roth IRA

• Contributions are made with after-tax dollars
• Qualified withdrawals in retirement are tax-free
• Income limits apply for eligibility

4. SEP IRA / Solo 401(k)

• Designed for self-employed individuals or small business owners
• Higher contribution limits than traditional IRAs

5. Automatic IRA (state-run programs)

• Offered in some states to workers without access to an employer plan
• Contributions made via payroll deduction
• Easy to set up and manage

Even if your employer doesn’t offer a retirement plan, you can still open an IRA at a bank or brokerage firm.

Step 3: Start Where You Are—Any Amount Helps

One of the biggest myths about retirement savings is that you need a lot of money to begin. In reality, starting with small, consistent contributions is far better than doing nothing.

• Set a goal to save just $50 or $100/month
• Automate your contributions so you don’t have to think about it
• Increase your contributions as your income grows
• Use tax refunds, bonuses, or “found money” to boost your account

The key is to build the habit, then let time and compound growth do the heavy lifting.

Step 4: Take Advantage of Employer Plans (and Matches)

If your employer offers a 401(k) or 403(b) plan, enroll—even if you start small. At the very least, contribute enough to receive the employer match, if offered.

For example:

• If your employer matches 100% of the first 3% of your salary, and you earn $50,000/year, that’s $1,500/year of free money
• Over 30 years, with modest returns, that match alone could be worth over $100,000

Employer plans often include automatic enrollment, built-in investment options, and professional support, making them one of the easiest ways to start saving.

Step 5: Set Goals and Calculate How Much You’ll Need

Retirement planning can feel vague until you attach numbers to it. Start by estimating how much you’ll need to live on in retirement:

• Consider housing, food, healthcare, transportation, travel, and hobbies
• Use online calculators to project how much you need to save based on age and income
• A common rule of thumb is to aim for 70–80% of your pre-retirement income annually

Then, work backward to set savings goals. Even if you can’t hit the ideal number, saving something is always better than nothing.

Step 6: Watch for Fees and Risk

Not all retirement accounts are equal. Pay attention to:

• Account fees: Choose low-cost providers when possible (look for index funds and ETFs with low expense ratios)
• Investment options: Diversify to spread risk—most plans include target-date funds that adjust based on your retirement age
• Risk tolerance: Don’t invest too conservatively too early, or too aggressively too close to retirement

Consider speaking with a financial advisor if you’re unsure where to start or how to balance your investments.

Step 7: Monitor and Adjust Over Time

Saving for retirement isn’t a “set it and forget it” process. As your career, family situation, or health changes, so should your retirement strategy.

Regularly review your plan to:

• Increase contributions when possible
• Adjust your asset allocation based on your age and risk level
• Confirm your beneficiary information is up to date
• Make catch-up contributions if you’re over 50 (IRS allows extra savings)

Set a calendar reminder to check in at least once or twice a year.

Step 8: Don’t Let Fear or Shame Stop You

If you feel behind on retirement savings, you’re not alone—and it’s not too late.

Starting today means you’re already doing better than someone who waits another year. Every dollar you save now is one less dollar you’ll have to worry about later.

Remember:

• You’re not “too late” to make a difference
• You don’t need to be a finance expert to get started
• Every step forward builds confidence and momentum

Final Thoughts

Not having a retirement savings plan is common—but that doesn’t make it safe. The earlier you take action, the more freedom, dignity, and security you’ll have later in life.

Don’t wait for a perfect plan, higher income, or a windfall. Start today, with what you have. Even modest, consistent savings can grow into the foundation of a more secure and fulfilling retirement.

Because your future deserves more than uncertainty—it deserves a plan.

Don’t Be Afraid To Get Help

If you’re facing legal questions, safety concerns, or emotional turmoil due to any of the situations described above—especially domestic abuse—don’t try to handle it alone. Professional guidance can make all the difference in ensuring your rights are protected and your next steps are clear. Whether you need legal advice, help with documentation, or assistance navigating local resources, speaking to an expert can bring peace of mind. Click here to get connected with professional support tailored to your situation.