Saving for retirement isn't easy, especially during tough economic times. With a recession potentially on the horizon, many workers are focused on simply making ends meet.

It's easier than you might think, though, to grow your retirement savings. Even if you can't afford to save much, it's possible to build a robust nest egg with little to no effort. Here's how.

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Take advantage of compound earnings

One of the most effective ways to grow your savings is to invest your money, rather than simply saving it. Even the best savings accounts only have interest rates of 1% to 2%, while the S&P 500 has historically averaged returns of around 10% per year.

Even if you only invest a small amount, those earnings will compound over time -- meaning your savings will grow exponentially with very little effort on your part.

For example, say you have $1,000 to invest right now, and your investments are earning a 10% average annual rate of return. Assuming you make no additional contributions, you'd have around $10,800 after 25 years. In other words, your savings will have grown by more than 10 times without you having to lift a finger.

If you're able to invest a little each month, you could earn substantially more. Say, for instance, you invest the initial $1,000, but you also invest an additional $100 per month. Assuming you're still earning an average 10% annual rate of return, here's how much you could accumulate over time:

Number of Years Total Savings
10 $21,700
20 $75,500
30 $214,800
40 $576,400

Data source: Calculations by author via

You don't need to invest thousands of dollars per month to build a robust retirement fund. Small investments add up over time, and by sticking to your strategy and investing consistently, you'll be well on your way to creating a healthy nest egg.

Maximize your savings

Investing a little each month will go a long way, but to earn as much as possible in the stock market, there are a few things to keep in mind. 

  • Keep a long-term outlook: Building wealth in the stock market takes time, and it's nearly impossible to make a lot of money overnight. The more time you give your money to grow, the faster it will accumulate.
  • Try to ignore short-term volatility: It can be difficult to invest when the market is volatile and the economy is sinking, but, again, investing is playing the long game. The stock market has recovered from countless downturns, and it will bounce back from this one, too. Try your best to ignore daily market fluctuations and stay focused on the future.
  • Avoid withdrawing your money: It can be tempting to view your retirement fund as a big savings account, but every time you tap your investments, you're making it harder for your money to grow -- and possibly incurring penalty fees and taxes. When you invest, aim to leave your money in the stock market for at least several years, if not decades.

Saving for retirement is tough, especially in the current economic climate. But small efforts can go a long way. By investing just a little each month, it can add up to more than you might think.