Starting to save for retirement isn’t always easy. As a millennial money coach, I’ve juggled paying off $300,000 in debt while investing. And even though I now have enough to retire early, the landscape has changed significantly since I made my first 401(k) contribution nearly 17 years ago — and shortfall in pension savings it is even wider.

In 2022, about 41 percent of American adults stopped contributing to a retirement fund because of the rising cost of living, according to a 2023 US News Poll. Even more worrying is that almost a third have withdrawn from their retirement savings in 2022 to stay afloat.

If you feel overwhelmed or burdened by other debts or financial goals, you are not alone. Saving for retirement it is hard, but with a proactive money plan, continued education, and the right emotional support, you can take small steps today to help build toward a respectable future in your golden years.

Take steps to prepare now, even if you’re not ready to save

Saving enough to enjoy your retirement years is certainly a challenge — especially as housing and other essential costs continue to rise while wages don’t keep up. Many of my students age 50 and older have put off their retirement plans because they simply cannot afford to live off their current savings. Others may have put off contributing to a pension fund until debt is paid off or their income increases.

In coaching thousands of people to achieve their financial goals, the #1 regret I hear is that they all wish they had started sooner. There will probably never be a “perfect” moment. But there are ways to prepare to save more for retirement without putting money down. Here’s how I recommend getting started:

• Open accounts now so they’re available when you’re ready.
• Use features like “watchlists” to follow the investments you’re interested in to learn their trends and nuances over time.
• Pay high-interest debt, such as credit cards to increase your cash flow. Once one debt is paid off, you can redirect some of that money to retirement savings while you work on your next debt.
• Follow money experts like the ones on CNET Financial Expert Review Board for practical education and inspiration.
• Talk to people you know who have successfully retired to remind you that it is possible.

The more financial knowledge you arm yourself with, the easier it will be to get started.

Social Security can help, but it’s rarely enough

If you’re counting on Social Security benefits to see you through to retirement, I urge you to do some research. I learned first hand that Social security benefits they often don’t extend far enough. When my parents retired, they relied solely on these benefits to get by. But once my father died, I found out that only a portion of his benefits would go towards my mother’s care. And even with full benefits, Social Security is rarely enough to cover medical expenses. My mother battled diabetes and kidney failure, both of which were necessary health care costs beyond what social security would cover.

To better plan, find out how much you’re expected to collect from Social Security when you retire. The the maximum monthly social security benefit it depends on the age at which you retire. For example, if you retire in 2024 at:

• age 62, your maximum benefit would be $2,710
• full retirement age, your maximum benefit would be $3,822
• age 70, your maximum benefit would be $4,873

The longer you wait to retire, the greater your benefit. However, if you need to retire early

Take advantage of Roth IRAs

Regardless of age, the first place I recommend stashing away your retirement funds is in a Roth IRA or, if your employer offers one, the Roth option in your 401(k). About 88 percent of 401(k) plans offered a Roth account in 2021, nearly twice as many as 10 years ago, according to Plan Sponsor Council of America.

Because you contribute to a Roth IRA with after-tax dollars, when you withdraw funds from a Roth IRAs in retirement, you won’t owe taxes on any of the money. But more significantly (and what most people miss), you won’t pay taxes on the growth earned from your initial contributions either.

If you contribute $5,000 to a traditional IRA or 401(k) and it grows to $25,000, you’ll pay taxes on the entire $25,000 when you withdraw. But if you contribute to a Roth 401(k), you won’t pay taxes on the extra $20,000. This is a huge benefit.

For 2024, you can contribute $7,000 total in all of your IRAs, whether traditional (pre-tax) or Roth (after-tax), and the limit goes up to $8,000 if you’re 50 or older. Contributing $7,000 a year may be a lot at first, but if you divide that by 365 days in a year, you’d need to save $19.18 a day, or about $575 a month, to reach the IRS limit . The earlier you start, the more time your money will have to work for you, thanks to power compound interest.

For example, let’s say you start with $0 today and invest $575 monthly to reach the maximum IRA of $7,000. If you continue at this rate for 10 years and get a 10% interest rate, you’ll have an extra $111,562 to live on in the future.

However, Roth IRAs have income limits. For 2024, don’t phase in the total amount if you earn more than $146,000 if you file single or $230,000 if you’re married filing jointly. I recommend turning to a traditional IRA if you exceed the income limit to contribute to a Roth IRA. My biggest regret in my own financial journey was not understanding the power of the Roth IRA sooner.

Use easy-to-use investment tools

Investing was much less transparent and much more complicated even just a decade ago. We no longer have to settle for the expensive and confusing mutual funds our parents and grandparents had to choose from. Instead, we can start saving for retirement in minutes thanks to rapidly evolving digital tools and affordability online banking and investment platforms.

I have a 401(k) through my company and recently transferred my traditional and Roth IRAs from an outdated financial services provider to Fidelity, which is easier to use and more customizable and comes with education about each investment. But even if you’re not independent, check your company’s investment platform to see what options are available to you. You may be able to take control of where you invest your money.

It was even more encouraging to see more environmental, social and governance metrics, aka ESGoptions available to investors. For example, you can now choose pension investments based on social or environmental factors, such as a company’s carbon footprint, waste management practices or commitment to employee diversity.

Take advantage of great savings and CD rates

Our the current high-speed climate can help you earn a little extra as you approach retirement. While a high yield savings account should not be your primary retirement account, it can serve as a useful supplement. Having at least a month’s worth of buffer savings in a HYSA can reduce your risk of pulling money out of your pension fund when times get tough.

This one-month reserve should include what it would cost to cover your housing, utilities, transportation, food, and health costs so you can start moving from waiting for your next paycheck to paying your bills.

If your risk appetite isn’t robust enough to invest in the stock market, real estate, or other alternative investments, I like to use deposit certificates to help me save a little more money now while reducing the temptation to spend it right away.

For example, I decided to place the amount insured by the Federal Deposit Insurance Corporation in a One year CD to earn more than 4% on a house down payment for this year, which will help me afford a mortgage on a bigger house.

CDs are a great entry point into investing for anyone worried about losing money. They can help you diversify your overall assets, but you won’t earn as much over time as you would by investing in the stock market.

After you’ve maxed out your contributions to tax-advantaged retirement accounts, if you’re ready to invest with a little more risk, consider investing with an online platform or robo-advisor to grow your money with index funds, exchange traded funds and other types of investments.

Don’t wait. Your future self will thank you

The earlier you start your retirement savings journey, the faster your money grows. Even if you’re not ready to take the plunge and start saving just yet, research different retirement accounts and hone different savings strategies to make prioritizing your future a little easier.

When you’re ready, plan to make regular contributions to stay on track and grow your retirement savings. That way, you’re in the habit of making contributions and can adjust your budget to accommodate your retirement savings, needs, and other financial goals.

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