Avoid These Common Mistakes When Saving for Retirement as a Low-Income Earner

Avoid These Common Mistakes When Saving for Retirement as a Low-Income Earner

Only 1 in 10 low-income households have money in a retirement account, a significant decrease from 2007. Find out how to save, even if you don't earn a lot of money. Image source: Getty Images

Situation Overview

If you don't earn a lot of money, it can be hard to keep on top of your bills, never mind save for retirement. Sadly, that's the situation a lot of Americans find themselves in. Sky-high living costs have made it harder than ever for earners at the lower end of the scale to save for their old age. The number of low-income households who manage to invest is shrinking. Back in 2007, about 1 in 5 low-income households had money in a retirement account. Fast forward to 2019 and that figure had halved, according to research from the Government Accountability Office. Just 1 in 10 low-income households had retirement savings in 2019.

Tips to Improve Savings

• Start making small contributions to a retirement account to benefit from compound interest.
• Do not overlook tax credits and tax breaks that could boost your retirement savings.
• Embrace long-term investment strategies and avoid short-term decision-making.

Conclusion: If you are a low-income earner looking to secure your financial future, adopting smart savings strategies and avoding common mistakes will help you build a substantial retirement fund over time.