Retirement planning is a hot topic and the research suggests that Americans are overwhelmingly unprepared. According to the Employee Benefits Research Institute, only 22% of workers say they're very confident about their ability to save enough for a comfortable retirement. Seventeen percent said they're not too sure they'll be able to meet their basic expenses once they retire.
Find out now: How much do I need to save for retirement?
Having a higher income means you've got more money to save, but what if you're living paycheck to paycheck? While you might have to start smaller, it's possible to build a solid nest egg when you're working on a shoestring budget. Here are some tips on how to save even if you think you're broke.
1. Start With Your Employer's Plan
If you've got a steady job that has decent benefits, your 401(k) is a good place to put your retirement funds. Ideally, you should be chipping in enough to get the company match if your employer offers one but if not, it's best to save what you can until your pay increases. You'd be surprised at how quickly it can add up.
If you save consistently until you turn 65 and your income never changes, you'll have plenty of money to use when you retire.
2. Bank Your Extra Paychecks
If you normally get paid on a biweekly basis, you've got a built-in way to save if there are certain months out of the year where you receive a third paycheck. Stashing this money in your retirement account can add some significant numbers to your savings total over time.
By socking away that extra paycheck in a Roth IRA, you could have thousands of dollars to withdraw tax-free in retirement.
Related Article: 5 Ways to Put an End to Paycheck-to-Paycheck Living
3. Use Your HSA for More Than Just Medical Expenses
A health savings account can supplement your retirement savings if you don't have a 401(k) or you can't park your extra checks in an IRA. The money you stash in an HSA is supposed to be used for medical expenses, but you can make penalty-free withdrawals for any reason after age 65. You'll still pay taxes on the money, but that extra income can come in handy.
4. Get Credit for What You're Saving
If you normally get a big tax refund, that's extra money you can automatically set aside for retirement. You can pump up your refund even more by claiming the Retirement Saver's Tax Credit.
This is a credit designed for lower income workers and it effectively pays you back for saving. As of 2016, the credit is good for up to $2,000 for single filers and up to $4,000 for married couples filing jointly. The credit is applied to your tax liability for the year, so it can put a few extra dollars back in your pocket that can then go towards your nest egg.
Check out our 401(k) calculator.
Saving for retirement can be challenging, especially when you don't have a lot of extra money to work with. Trimming your budget is an important step but if you've already cut it down to bare bones, you may have to think outside the box to find the cash to save.
RELATED: Click through for some ideas on how to make money fast: