Saving for retirement is crucial. Without a healthy nest egg, you'll risk a host of financial struggles during retirement. And if you're planning to live on Social Security by itself, you'd better rethink that idea. Those benefits will only replace about 40% of your income if you're an average earner, and most seniors need about double that sum to maintain a decent lifestyle.

Unfortunately, new data from the Economic Policy Institute (EPI) reveals that an uncomfortably large number of Americans are lacking in retirement savings. Among households headed by someone between the ages of 32 and 61, nearly half have no money in retirement savings whatsoever.

Now to be fair, though the EPI report was recently published, its data dates back to 2016, so it could be that that percentage is a little off. Another thing worth noting is that some families without retirement savings may have other assets that can serve as a cash source down the line -- valuable artwork, jewelry, or a paid-off home, to name a few.

Older man and woman holding small pieces of paper while other papers are on a table in front of them


But even with these caveats, it's hard to ignore the fact that almost 50% of Americans risk spending their golden years living in poverty. If you'd rather not be one of them, consider this your wake-up call to start focusing on your savings immediately.

Building your nest egg

The average senior on Social Security today collects roughly $18,000 a year. If you don't have a pension or valuable assets like the ones previously mentioned, and you also don't have savings in a retirement plan by the time your career ends, you're apt to have trouble paying the bills.

That's why you must do better if your retirement savings balance is at or barely above $0. For one thing, set up a budget and limit your non-essential spending. Dining out a few less times each month could free up $100 for your IRA or 401(k). Next, stop paying for services you can live without, like your gym membership, subscription boxes, or streaming services. Cut those out, and you may have another $100 a month on your hands.

Finally, look at getting a second job to boost your income, thereby giving you more money for savings purposes. If you're willing to freelance for a few hours a week, you might end up with another $200 by month's end. All told, that's $400 a month you can put into savings while making reasonable lifestyle changes. And here's what that monthly $400 contribution could grow into, depending on how long you have between now and retirement:

Savings Window for $400 Monthly Retirement Plan Contribution

Ending Savings Balance (Assumes a 7% Average Annual Return)

35 years


30 years


25 years


20 years


15 years



The 7% return used in our table, by the way, is actually a few percentage points below the stock market's average. If you invest your IRA or 401(k) heavily in stocks (which you should do if you're looking at any of the savings windows above), you're likely to do that well or better.

Saving for retirement isn't easy, especially when your income is limited and you're grappling with near-term bills. But if you don't make an effort to sock money away for your golden years, you'll risk being cash-strapped throughout them. And after a lifetime of hard work, you deserve much better.