The coronavirus pandemic has taken an enormous toll on most Americans’ finances. Between widespread job losses, high unemployment rates and thousands of people facing health complications from COVID-19, saving for retirement is the last thing on most peoples’ minds.

That does not change the fact, however, that the average retiree has just 39% of recommended savings and cannot maintain the same standard of living as they did when they were employed. Although this fate may seem dismal, the good news is that you do not need a six-figure salary to save for retirement.

In addition to simply setting money aside each month, there are a number of different strategies to save for retirement. The article will provide tips on how to plan for your golden years despite the hardships of COVID-19.

1. Contribute to a Retirement Fund

Although owning a business can make it difficult to set aside money (especially during a pandemic), you should continue contributing to a retirement fund if you are financially able to do so.

Saving money for retirement, even during downtimes, is essential to building a savings account that suits your long-term goals. In addition to traditional IRAs, there are a number of account types business owners can explore, and the cost of maintaining a plan is relatively low. The four most common options are a SEP-IRA, a SIMPLE IRA, a Solo 401(k), and a SIMPLE 401(k). Except for the SEP-IRA, these types of accounts can be used by sole proprietorships, partnerships, LLCs or corporations.

Moreover, if you’re in need of cash, borrowing from your retirement funds should be one of your last resorts. Although the CARES Act waived early withdrawal penalties for individuals under 59 ½ years old who want to borrow from their retirement account, it is wise to explore other options before doing so. For instance, if you do not need the money for a serious purchase or crisis, consider taking out a personal loan instead.

2. Invest in REITs

Investing in physical property is a great way to build your wealth and save for retirement. However, it’s a huge time commitment, and you likely will not see returns for many years. REITs, on the other hand, are publicly traded on the stock market and offer much more liquidity to investors than actual property.

Holding REITs in a nontaxable retirement account, such as a Solo 401(k), and reinvesting the dividends will allow your wealth to snowball.

3. Invest in High-Quality Dividend Stocks

Rather than letting your savings sit in a low interest bearing account, consider investing your money in high-quality dividend stocks, such as Coca-Cola or Verizon.

Dividends are a sum of money regularly paid by a company (usually quarterly) to its shareholders out of its earnings. By researching stocks that are stable investments with high dividends, you can make a plan to earn passive income that you can spend during retirement.

This type of income is great for retirees because, once you are invested, you do not need to do anything else to earn dividends. And once you receive your dividends, they can be reinvested into other dividend stocks. As the dividends from each company grow each year, your wealth will experience multiple levels of compounding.

4. Reassess Your Budget

Understanding your business’s budget and your personal budget can make saving for retirement much easier.

Consider: Although the average recommended savings rate is 22.4% of monthly income, the current average savings rate for households is 13.8%, according to Savology’s State of Personal Finance 2020 report.

Step one to overcoming the savings rate gap is assessing your finances and expenses. Take inventory of your monthly bills and see if any costs have decreased or increased in recent months. For instance, if your employees are now entirely remote and you no longer rent office space, you can set aside the money saved toward your retirement and your employees’ retirement.

Examining your budget will also show you the areas where you spend the most. For example, you may be able to lower your car insurance rate or cut out under-used subscription services, saving thousands of dollars in the process.

5. Have an Emergency Fund

As a rule of thumb, you should try to keep an emergency fund that covers three to six months of living expenses. For instance, if you fall ill and cannot work for several weeks, your emergency fund can act as a bridge until you are able to get back on your feet.

Having an emergency fund will also make it so that you do not need to dip into your retirement account if you find yourself in a crisis like the current pandemic. In fact, a recent U.S. News survey revealed that 20% of respondents have taken or plan to take out money from an emergency fund as a result of the coronavirus.

6. Take Advantage of Low Interest Rates

Due to historically low interest rates, many homeowners are now deciding to refinance their mortgages. Although the exact amount of savings will vary depending on your situation, any money saved can be put toward a retirement account.

You may also consider taking advantage of low interest rates by selling your home and downsizing a bit. In the current seller’s market, your home is likely to sell quickly. Again, the money saved on property taxes, HOA fees and mortgage rates could all or partially go toward your savings.

If you do sell your home, make sure you work with a real estate attorney who can help you save money on contingencies and insulate you from potential lawsuits years down the line once you’re already in retirement.

Saving for retirement can feel like a monumental task. Although U.S. retirees have social security income (SSI) to fall back on, relying solely on SSI is not realistic for most individuals, especially considering the average retiree spends $3,800 per month.


By slowly, strategically and consistently investing your money over time, you will see your retirement savings significantly increase. At the end of the day, the peace of mind you have from knowing you’ll be set during your golden years is priceless.