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What Happens If you Don’t Save for Retirement

Inside: Life without retirement savings isn’t what you planned. But, you are faced with retirement without savings. So, what happens if you don’t save for retirement?

This is tough. Really, really tough.

It is a situation in which many people face. And the number continues to grow each year.

So, if you are in this situation, please know that you are not alone. If you are getting close to retirement, there will be tips to help you survive.

According to the Federal Reserve, many Americans lack retirement savings, and being prepared to retire is eye-opening. Those with no retirement savings by age is:

  • 18-29: 42%
  • 30-44: 26%
  • 45-59: 17%
  • 60+: 13%

According to the same study, only 42% of those 45-59 and 45% of those 60 and older, perceive their retirement savings as being on track. The data suggest that people tend to start saving more as they get older, but it still bears to ask what happens if you are retiring and broke. 

Less than half the people who are getting close to retirement (whether they are 55, 62, or 65) comprehend their retirement savings to be at a point where they can actually live off during retirement.

The stress of financial insecurity is tremendous.

So, what do if you have no retirement savings at 50?

You can try and ignore retirement savings, but it will catch up on you at some point.

Let’s figure out what retirement without savings looks like…

If you are worried about not having enough retirement money, then you need to learn what happens if you don't save for retirement. Even if don't have enough money saved, then learn tips and tricks to survive with no money. Make a plan today to save money before you hit retirement age.

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How to Retire without a Pension

But first, let’s take a walk back into memory lane.


The purpose of a pension was to provide income in your retirement years for all of the years worked.

For example, my granddad worked at the same company for over 30 years. When he retired, he received a consistent paycheck, which was substantially more than Social Security. 

Plus, in many instances, you can collect a pension and social security. That seems like a win-win, right?

However, pensions started going by the wayside when 401Ks were introduced in 1978. Over time, the number of companies offering a pension declined sharply because there is a huge risk (and cost) for a company to continue providing ongoing income and benefits for potentially another 35 years.

Less than 22% of working Americans have the luxury of a pension (source). That means most Americans have to navigate life without pensions.

So, how to retire without a pension… One word… SAVE!

The purpose of 401Ks is to put saving into your hands and out of the control of your employer. This type of program has been around for over 40 years yet half of the people participate in retirement plans.

Don’t delay… start saving for retirement now. 

What Happens If you Don’t Save for Retirement

How to Retire without a Pension

This is what life without retirement savings looks like. 

Not saving for retirement can have significant consequences and make your life harder in the long run. 

One of the main reasons for retirement without savings is people put off saving for retirement. They keep saying we will save for retirement next year. And that next year comes way sooner than they thought and retiring is right around the corner.

Retiring and broke is not a fun prospect, but this is what you can expect to happen if you don’t save for retirement.

These are real-life retirement stories.

1. Lose Your Choices

The main advantage of saving money is it will open doors for opportunities.

Yet, as the statistics above state, people don’t save money. It is a sad sad fact. But, the reality for many.

When you don’t save for retirement, your choices become more and more limited as you age.

If you don’t own your home outright (meaning any mortgage debt) and can’t make the payments, then you lose the choice of where you want to live during retirement. This is something too many aging couples must sacrifice the home where they raised their children.

If you can’t pay for the things that you need, you run out of choices. You can try and rack up credit card debt, but that money line will quickly dry up as your credit declines. 

2. Government Decides

Say what? The government is going to make all of the decisions for you at the end of your life.

From healthcare to living situations, the government will decide what happens at the end of your life.

That is probably the last thing that you want to happen. I know for me I do not want the government to dictate my last years.

An unexpected disability with no savings before retirement age can land you in the exact same boat. A fairly healthy 43-year-old had a massive stroke that left him permanently disabled and unable to care for himself. Since he had no savings or support system, he became dependent on the government and they decided all of his health care and long-term care facility choices. Ultimately, he landed on Medicaid and receives a small stipend each month to spend as he pleases.

Related: Is Social Security Disability Taxable?

3. Stuck Asking for Help from Friends and Family

What Happens If you Don't Save for Retirement

You must ask your loved ones to take care of you because of your lack of planning and lack of desire to save during your money making years.

Some family members may have the resources to keep you afloat and live the same lifestyle you are used to. Others may have learned from your poor money management decisions and are scraping to get by themselves. 

More often than not, you probably have burned the bridge asking for handouts the previous times and wasting the money. Your choices with money have your friends and family tired of being asked for money.

You might have to move across the country to live with your kids. To ease the situation, helping out with household chores and watching your grandkids might be necessary.

This will stress your relationship with those around you. Their decisions will decide how you will live your life. As stated above, you will lose your choices.

4. Work Until you Die

You will have to keep working for income until the day you die. 

There is no getting around this fact. 

Working is the only option when you want to retire broke.

In all honesty, retirement isn’t retirement as most people think when you are constantly holding down a job. At this point, you are working to live, keep a roof over your head, and have food in your belly. You are living paycheck to paycheck.

You need to make money to pay your expenses. Period.

Here is a great list of ideas to make money in retirement.

5. Lose Your Assets 

What Happens If you Don't Save for Retirement

This will happen willingly or unwillingly.

It could be from foreclosing on your home or taking the last penny in your bank account to qualify for Medicaid.

To qualify for help, you must relinquish your assets and turn them over to the government to qualify for federal and state programs.

This happened for dear Grandma. In order to have a safe place to live, she had to sell all of her assets and keep less than $2000 of assets. She had to relinquish her Social Security checks. In order, she received government-mandated health care and they provided a place in a long-term care facility.

6. Dreams are Dashed

For many, you planned to save when there was more money around, or maybe a financial crisis knocked down your assets. 

You have to accept that your lifestyle will never be what you thought it would be during retirement.

All of your hopes and dreams have come to a halt. You are left wondering what your next move will be.

You are left to pick up the pieces and figure out how to survive in retirement with not enough money.

The great news is you have time to reinvent a new retirement picture for yourself. 

7. Reality is Real

Your hope that money grows on trees or somehow you would survive retirement with no money won’t happen.

All of the financial decisions you made over the years came back at you like a quick highlight video reel. Your mistakes are more noticeable now than ever before. 

It does not take retirement experts to figure out that money does not grow on trees.

Reality sucks.

You chose this boat. Now, you need to figure out how to turn in from a tugboat to a sailboat.

How to Overcome Top Money Mistakes:

How To Retire Without Savings

Picture of an old man figuring out how to retire without savings

This is probably not exactly what you thought your retirement years would look like, but it is your current reality.

So, learn how to survive in retirement with no money. It is possible. Even if you live on a bare bones budget. Or a shoestring budget.

1. Wait to Start Social Security Age

If you can wait to start withdrawing from social security, then wait.

You are eligible to start withdrawing at age 62 and is mandatory to take withdrawals by age 70. For every month, that you decide to wait to start your social security, then you can get more of a sizable paycheck. 

For instance, if you are working a part-time job and covering your expenses, then wait to start social security. Once you decide that working is becoming harder and harder for you to physically do, then begin Social Security payments. Your check will be larger since you decided to wait.

Learn how applying for Social Security as soon as possible can reduce your benefit

2. Make You Social Security Income Count

Once you have Social Security income coming in, then you must make sure you are maximizing each and every dollar. That way you can have less financial stress with each month.

You have to do everything in your power to keep your expenses below your Social Security income coming in.

More than likely, this may be way harder than you thought. A zero based budget will help.

3. Make a Budget

There is never a better time than now to figure out budgeting. If budgets have alluded you in the past, then put the past behind you and focus on your future of retiring and broke. 

The key to your budget… Income – Expenses = Having a little money left over.

This is not the time for overspending. You must start to live below your means.

This is how you can guarantee to survive in retirement with no money. Even if you hate budgeting, it is more than likely better than what happens if you don’t save for retirement.

Budgeting Resources:

4. Downsize

what happens in retirement with not enough money

Maybe the time is now to downsize into a small house or move to a more affordable area. This is the perfect time to transition to one car or maybe start relying on public transportation for safety reasons.

Downsizing can cut down many of your expenses from rent/mortgage to utility costs.

While downsizing may be an option for many, make sure it makes financial sense for you. If you are lucky enough to have your mortgage paid off, then moving may not make sense if your new home comes with a new mortgage.

Also, in many counties, if you have lived in your house for more than 10 years and over a certain age, your property taxes are lowered.

5. Leverage What you Can

When you retire without savings or little money saved, then you need to figure out ways to find extra money on what you already have. There are many ways you can do this.

You just need to start getting creative. Also, you need to figure out your threshold for risk.

One possibility is to get started in real estate investing. This is one of the riskiest ways to leverage what you have, but can quickly bring in a steady stream of rental income. You can leverage your home with a HELOC as a downpayment for a rental property.

Have you thought of investing your assets in the stock market? Have you considered how fast you make money in stocks? That is a very doable option.

One of the simplest ways to make money fast is to have people rent space that you have unused. This could be an extra garage space, empty basement, or even extra space around your property.

Talking of extra space, you can lower your expenses by sharing expenses with a roommate.  

6. Get Help 

no retirement savings

When you are trying to survive in retirement with no money, asking for help is often embarrassing.

But, if you are unable to make ends meet despite everything you tried, you want to do everything you can to stay afloat.

This help could be from a variety of sources – friends, family, and local non-profits.

Maybe you volunteer at the local food pantry, so you can get food for the week as well as give back to those helping you.

Before you hit up your friends and family, try to find local non-profits that can connect you with the services to help improve your current situation. They have the resources and connections to help you the most.

At the very last resort, ask family or friends for help. Just remember that you don’t want to constantly be begging for handouts while not making smart choices with the money given. That well can dry up fairly quickly if you’re not careful. Plus you are burdening them with an unprecedented amount of financial stress and anxiety.

7. Make Extra Money

Retiring and being broke is a pretty tough combination. You have to find ways to bring in money. That means you must be making money in retirement.

Thankfully, it is way easier to make money in today’s workplace. But, it won’t be in your same career and the income will be a fraction of what you made during your peak income-making years.

Job Possibilities in Retirement:

The options are endless. You just have to be willing to accept a job that brings in income regardless of whether or not you are overqualified for it.

Making income is crucial if you don’t save for retirement. You have to work until you can’t physically work anymore. More than likely, you will have to work until you die.

Side Note: It would be unfair not to mention this. Even though there are protections in place to make sure age discrimination doesn’t happen, it is harder and harder for those over 50 years old to keep a high-paying job in their field of choice. Finding a new job in their career field is even tougher.

Are you Ready for Life Without Retirement Savings?

life without retirement savings

Reality will set very quickly when retiring and being broke.

Trying to figure out how to retire on little money is extremely stressful and probably filled with lots of regret on how you managed money over the past 40 years.

This is the exact reason people save for retirement… To guarantee they don’t have to worry about what happens if you don’t save for retirement.

While saving for retirement is as fun as spending money or saving for travel or a house, it is more critical to your long-term financial security. Plus you will retire with much less stress.

Learn how much money should I have saved by 30.

However, you can survive retirement without enough money if you are creative and strategic with the resources you have left.

Don’t give up hope!

You really do not want to live what happens if you have no retirement savings.

Start saving with one of our popular money saving challenges today.

Know someone else that needs this, too? Then, please share!!

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More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!

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