Can I Really Save for Retirement if I Only Earn $30,000 a Year?

It may not be easy -- but it can be done.

In 2021, the average U.S. income was $97,962, per recent research from The Ascent. The median U.S. income that same year was $69,717.

But what if your annual income is nowhere close to these numbers? What if you're barely scraping by on a $30,000 annual salary?

If that's the case, you might be struggling to pay your rent, keep up with your auto loan payments, and cover the cost of food and utilities. So saving for retirement might seem like an utter joke.

But the reality is that you can save for retirement on a lower income, even though that's apt to be extremely challenging. Here's how.

Budget very carefully

If you're only earning $30,000 a year, then you're probably not spending hundreds of dollars a month on things like leisure and non-work apparel. But there may be a few things you spend money on regularly that you can cut back on.

Canceling one of two streaming services you subscribe to could put $15 a month back in your pocket. That's $180 a year that could go into your IRA account. And while that's not a ton of money, it's a lot better than saving nothing.

To figure out how to eke out savings, go through your credit card and bank statements from the past three to six months and try to identify areas in your budget where you can cut back. There may not be many opportunities, but all you need is at least one to start building some long-term savings.

Put the savings process on autopilot

Automating your savings might make it easier to stick to your goal of building a retirement nest egg -- even if that goal is to save, say, $500 or so a year. If you have access to a 401(k) plan through your job, you might, for example, sign up to contribute $50 a month from your salary. Once your paychecks are reduced by that sum, you might manage to learn to live on less.

You can also, in many cases, automate transfers over to an IRA. Doing so could similarly help you stay on track, because in that situation, you'll have money leaving your checking account at the start of each month, before you get a chance to start spending it.

Don't give up on retirement savings

Can you save $5,000 or $10,000 a year for retirement when your income is limited to $30,000? Probably not. But it may be possible to save something on that lower income, whether it's $300, $500, or a little bit more. And while socking away $25 or $50 a month for retirement may not seem like it'll amount to much, in time, it can.

Also recognize that while you may be earning $30,000 a year at present, ideally, your wages will go up over time, especially if you work on building more job skills and advancing in your career. Once that happens, you should have a prime opportunity to save even more for your future. But if you're able to get started now on a lower income, you'll give yourself a nice base to build upon.