Life can be full of curveballs, which can force your long-term financial goals, like retirement savings, to take a backseat. If this sounds like you, youre not alone. In fact, the Thrift Savings Survey on Retirement Readiness found that almost 24% of people who are close to retirement have done little to no planning for their golden years. So, what happens if you have no retirement savings?.
Well explore how you can retire even without savings to rely on. Well also provide a few immediate actions to start saving, even if it’s later than you intended.
Life can throw some serious curveballs our way. Maybe you’ve had unexpected medical bills, periods of unemployment or just struggled to make ends meet while raising a family. Whatever the reason if you’re approaching retirement age with little to no savings, you’re not alone. According to Thrivent’s Retirement Readiness Survey, nearly 44% of near-retirees have done minimal to no retirement planning.
But what really happens when you reach retirement age and have no money saved? Let me show you what happens and give you some real-world solutions that might help, even if you’re starting late.
The Hard Truth About Retiring Without Savings
When you don’t have money set aside for retirement, several things can happen – none of them particularly pleasant. Based on real-life examples shared by financial advisors, here’s what you might face
1. Working Until You Can’t Anymore
Do you remember John? Tom Diem, a financial advisor at Diem Wealth Management, told his story. In his 50s, John had been taking money out of his retirement accounts instead of putting money in. Even though John was told many times not to, he kept thinking his business would get better and everything would be fine. Then the market crashed. After being retired for a while, John, who is now in his 60s, has taken on a full-time job.
The harsh reality is that many people without adequate retirement savings simply don’t retire. Instead, they keep working well past traditional retirement age – sometimes until their health gives out.
2. Relying Entirely on Social Security
For many Americans with no savings, Social Security becomes their only income source. As of late 2023, the average Social Security benefit was about $1,710 per month – that’s less than $22,000 annually. Could you live on that amount?
Social Security was never meant to be a person’s only source of income when they retire. The average is that it only replaces about 30% of your previous earnings. This often means:
- Having to drastically reduce your standard of living
- Struggling to cover basic expenses like housing, food, and healthcare
- No budget for travel, hobbies, or helping family members
3. Making Drastic Lifestyle Changes
Financial Advisor Joseph Carbone of Focus Planning Group shares a story about clients who decided to retire early at 65, despite planning to work until 68. Their savings would run out by age 72 if they maintained their current lifestyle.
“The only way for them to survive financially was to sell their home and relocate to another part of the country with considerably lower housing prices,” Carbone explains. “That was one of the hardest meetings I ever had.”
Taylor Schulte, a financial planner in San Diego, talks about clients who “worked hard, made good money, but lived above their means.” That’s when they had to sell their house and a lot of their things and move into a small apartment far from their friends and family.
4. Becoming a Burden on Family
Kansas City Financial Planner Clint Haynes has a client whose parents didn’t save for retirement. When the husband passed away, the widow had virtually no money beyond minimal Social Security income.
“Because of this, my client had to completely upend his entire lifestyle to have his mother live with them and support her,” Haynes explains. “It’s completely changed their own financial lives.”
This scenario plays out frequently – adult children find themselves supporting parents who didn’t save, often putting their own financial future at risk in the process.
5. Facing the Consequences of Debt
Seattle Financial Advisor Josh Brein describes a couple who put their children’s weddings on credit cards. While their children are saving for their futures, “the parents are struggling to get by, working longer than they planned to and are swimming in debt because they wanted to ‘help out’ their kids.”
Carrying significant debt into retirement compounds the problem of inadequate savings. Every dollar spent on interest payments is one less dollar available for living expenses.
Can You Retire With No Savings? Your Options
If you’re facing retirement with little to no savings, all hope isn’t lost. Here are some realistic strategies:
1. Maximize Your Social Security Benefits
The timing of when you claim Social Security can significantly impact your benefit amount:
- Claiming at 62 (the earliest possible age) permanently reduces your monthly benefit
- Waiting until your full retirement age (66-67 for most people) gets you 100% of your benefit
- Delaying until 70 increases your benefit by 8% per year beyond full retirement age
For someone with little savings, waiting to claim Social Security (if possible) can be one of the most powerful financial moves available.
2. Consider Dramatic Downsizing
Housing typically represents the largest expense for most retirees. Consider these options:
- Sell your home and move to a significantly less expensive area
- Look into senior-specific affordable housing programs
- Consider shared housing arrangements with family or friends
- Explore whether a reverse mortgage makes sense for your situation
The equity in your home may represent your largest financial asset. Converting that equity into retirement income might be necessary.
3. Continue Working, But Differently
Working doesn’t have to mean continuing your current career full-time:
- Part-time work in your field or a new area of interest
- Seasonal work during busy periods
- Consulting or freelancing using your professional skills
- Side gigs like driving, delivery, or pet sitting
According to Thrivent’s survey, Americans are already rethinking conventional retirement—30% plan to retire gradually, and 5% don’t plan to retire at all.
4. Cut Expenses Aggressively
Creating and sticking to a detailed budget becomes essential when retiring with little savings:
- Eliminate unnecessary subscriptions and memberships
- Consider whether you really need cable TV or multiple streaming services
- Look into senior discounts for everything from restaurants to insurance
- Evaluate whether you still need a car (or multiple vehicles)
- Take advantage of free community activities and resources
Many communities offer free or discounted services for seniors, from transportation to meal programs.
It’s Not Too Late: Start Saving Now
Even if retirement is approaching quickly, any amount you can save now will help. Here are some strategies for late-start saving:
1. Take Advantage of Catch-Up Contributions
If you’re 50 or older, you can contribute extra to retirement accounts:
- 401(k) plans: $23,500 annual limit plus $7,500 catch-up (2025)
- IRAs: $7,000 annual limit plus $1,000 catch-up (2025)
These higher contribution limits are specifically designed to help older workers save more in their final working years.
2. Prioritize High-Return Investments (Within Reason)
While you shouldn’t take excessive risks close to retirement, you may need higher returns than extremely conservative investments can provide:
- Consider a balanced portfolio appropriate for your time horizon
- Look into annuities that can provide guaranteed income
- Explore whether investing in income-producing assets makes sense for your situation
3. Work With a Financial Professional
When you’re playing catch-up with retirement savings, professional guidance can be invaluable. A financial advisor can help you:
- Calculate exactly how much you need
- Create a realistic plan for your specific situation
- Identify tax-efficient saving strategies
- Navigate complex decisions like when to claim Social Security
Real-Life Stories of Retirement Without Savings
Financial Advisor Don Roork of AssetDynamics Wealth Management shares the story of Tony, who owned a small family business with his brothers. Tony saved very little, assuming he could sell his business share when ready to retire.
When a heart attack forced early retirement, Tony received much less than expected from the company. While he lived out his life peacefully, his wife Mary suffered significant financial and emotional stress after his death, despite her children’s support.
Financial Advisor Alex Whitehouse describes Glenn and Mary, who at ages 59 and 47 had saved only $5,000 in a 401(k), had no pensions, owed $10,000 on vehicles and $250,000 on their mortgage, and had just $300 in the bank! Their indiscriminate spending and lack of savings put retirement far out of reach.
The Bottom Line: Start Where You Are
The consequences of not saving for retirement can be severe – from working well into your 70s or 80s to dramatic lifestyle downgrades or becoming financially dependent on family members. But regardless of your current situation, there are steps you can take to improve your future.
As financial planner Charles C. Scott says about his aunt who failed to plan: “Not planning forces you into a situation of having to live with the consequences, whether you like them or not.”
The best time to start saving was 20 years ago. The second best time is today.
Even small steps matter:
- Increase your 401(k) contribution by just 1%
- Open an IRA and set up automatic monthly contributions
- Pay down high-interest debt to free up future cash flow
- Create a realistic budget that includes some retirement savings
We all want to enjoy our golden years with dignity and choices. By taking action now – even if it’s later than ideal – you can improve your retirement outlook and avoid the worst-case scenarios that come from having no retirement savings at all.
Remember, it’s never too late to make positive changes to your financial future!
Know your savings gap
Even if you feel far off from your retirement goal, having a savings target is still beneficial. What amount do you need to cover your expenses? Knowing this number can give you a better idea of your options to close the gap between your living expenses and what Social Security will provide.
Not sure what your number is? Try out our retirement income planning calculator.
You may have to rely on Social Security
Many retirees with little to no savings rely solely on Social Security as their main source of income. You can claim Social Security benefits as early as age 62, but your benefit amount will depend on when you start filing for the benefit. You get less than your full benefit if you file before your full retirement age. Every month you delay filing after full retirement age, you receive a credit that increases your benefit.
The average Social Security benefit in late 2023 was $1,710 per month. Thats less than $22,000 annually. High earners may receive more, but on average, Social Security still covers only 30% of their prior earnings.
Knowing how much to expect from your monthly Social Security benefit can give you a clearer idea of if you can live on this amount. The Social Security Administration provides calculators to help you determine your amount.
Serious mature older adult woman on laptop working from home or in office. Serious mature older adult woman watching training webinar on laptop working from home or in office. 60s middle aged businesswoman taking notes while using computer technology sitting at table.
I’m 59 Years Old With Nothing Saved For Retirement!
FAQ
What happens if I don’t have money to retire?
People who don’t have enough money to retire may have to work longer, cut back on spending, wait to claim Social Security benefits in order to get more money, sell their home or use home equity, or rely more on government programs and help.
What happens if you retire and have no money?
If they’ve got no other income beyond the state pension, and no savings, and have to pay rent, they’d probably be eligible for pension credit and housing benefit.
What to do if I don’t have enough money for retirement?
If you can’t meet basic living expenses between savings, pension, a part time job, and social security, consider moving into a smaller place or to an area with lower cost of living. Another thought if things seem bleak: at some point, you might qualify for low-income housing, food stamps and/or other services.
Is $5000 a month enough for retirement?
To retire comfortably, many retirees need between $60,000 and $100,000 annually, or $5,000 to $8,300 per month. This varies based on personal financial needs and expenses.
What happens if you run out of money in retirement?
If you run out of money in retirement, you may face financial hardship and reduced quality of life. You may need to rely on family members or government programs for financial assistance, reduce your standard of living, or make significant lifestyle changes. What happens if you don’t have savings in retirement?.
What happens if you don’t have enough retirement savings?
Here are some of the potential consequences of not having enough retirement savings: Living on a tight budget: You may have to cut back on your spending and make sacrifices in order to make ends meet.
How to retire with no money?
Consider working with a financial advisor as you plan for retirement. If you’re among those approaching retirement with little saved, the first thing to do is to get the clearest possible picture of where you stand financially. Now that you know that, you’ll be better prepared to figure out how to retire without any money.
Can you retire without savings?
Retiring without savings requires sacrifices and strategies. Social Security may not provide enough money for most people to maintain their pre-retirement lifestyles. For some, downsizing or working part-time can provide a supplement to Social Security. A large retirement savings is not possible for everyone, but other strategies exist.
What if you haven’t saved enough money for retirement?
If you haven’t saved enough money for retirement, you may be wondering how you’ll make ends meet. The truth is, retiring with no savings can be a difficult and stressful experience. It can mean living on a fixed income that may not be enough to cover your basic expenses.
Is not having enough money for retirement a reality?
Unfortunately, not having enough money for retirement will be a reality for far too many Americans. Late last year, Andrew Biggs wrote in Forbes that “about 45 percent of working-age households have no retirement savings at all.” ”.