An estimated 21% of Americans have no retirement savings at all, according to a 2018 study by Northwestern Mutual. But while it's one thing to be in your 20s, 30s, 40s, or even 50s without savings, it's another thing to reach your 60s without so much as a dollar in your IRA or 401(k). If that's your predicament, you might assume that you'll be destined for a life of poverty in retirement. But rather than resign yourself to that fate, here are three things you can do instead.
1. Cut major expenses in your budget
You'll often hear that skipping your daily latte will free up enough cash to help you retire comfortably. Unfortunately, it won't -- especially if you've reached the end stage of your career with no money set aside for the future.
So rather than making up for lost time with small changes in your budget, think big. Downsize to a smaller living space that's cheaper to heat, cool, and maintain. Get rid of a vehicle and use public transportation to commute. Cut back on pretty much all restaurant meals, except for the occasional birthday celebration; restaurants' notoriously high markups make it much more cost-effective to cook at home.
If you can make enough substantial changes that you're sitting on an extra $1,000 a month, and you invest that money at an average annual 7% return over seven years, you'll wind up with about $104,000. Granted, that's not a huge sum going into retirement, but it's better than nothing.
2. Extend your career
Not having any money stashed away for retirement means setting yourself up to struggle financially as a senior. Once you've figured out how to free up cash for savings, prepare to work a few years longer than anticipated.
Doing so will achieve a couple of goals. First, it will give you more of an opportunity to contribute to your nest egg. In the above example, we saw that saving $1,000 a month for seven years at a 7% return would result in $104,000, but if you save that same $1,000 a month for 10 years, you'll end up with $166,000. Second, working a few more years allows you to leave your savings untouched longer, thereby stretching that money.
Working longer might also help boost your Social Security benefits. For each year you delay benefits past your full retirement age, you'll boost them by 8% up until you turn 70. This means that if you're looking at a $1,400 monthly benefit at a full retirement age of 67, waiting until 70 will produce a $1,736 payment each month instead -- for life.
3. Get a side hustle
Side hustles aren't just for younger folks looking for some spending money; they are very handy in helping you catch up on retirement savings. In fact, of the millions of Americans who work a second gig, 14% do so for the express purpose of building a nest egg, one study says.
Your side hustle can be anything from selling baked goods at farmers' markets, to tutoring in a subject you know well, to starting your own copywriting business. It especially pays to get yourself a second gig if you're approaching retirement with little or no savings; chances are, you'll need to work part-time as a senior to keep up with your bills. This way, you'll have a job already lined up.
Entering your 60s with no retirement savings is hardly ideal. But all is not lost. If you make some serious lifestyle adjustments, work longer, and get a second gig to drum up extra cash, there's a good chance you'll end up with just enough to salvage your retirement.