How do I plan for retirement on a tight budget?
In one paragraph
Start by capturing every employer match available (a 4% match is a 100% return on those dollars), then fund a Roth IRA to the contribution limit — even $50/month compounds significantly over 30-40 years. The math works in favor of people who start small and stay consistent far more than people who wait until they can "do it right."
What this actually means
Planning for retirement on a limited income requires prioritizing sequence over amount. The order matters more than the number.
Step one is any employer match. A 401(k) match is the only guaranteed 100% return available in personal finance. Contributing enough to capture it — even if the budget is very tight — is almost always the right first move. Skipping a match to pay off moderate-interest debt is usually a mistake.
Step two is a Roth IRA for most lower-income earners. The Roth's tax-free growth compounds powerfully over long periods, and the income thresholds for Roth eligibility mean most people on tight budgets qualify. The contribution limits are currently $7,000/year ($8,000 over 50), but any amount helps — $100/month invested at 22 is worth more than $500/month invested at 42.
Step three, once those are funded, is returning to the 401(k) up to the annual limit.
The challenge on a tight budget is usually behavioral rather than mathematical: contributions compete with immediate needs. The books that address this most practically are Dave Ramsey's Total Money Makeover (build the emergency fund first, then direct every freed debt-payment dollar to retirement) and The Simple Path to Wealth by JL Collins (automate everything, use index funds, ignore the noise).
For readers specifically worried about lower incomes and government benefits: the Saver's Credit (a federal tax credit of 10-50% of retirement contributions for lower-income earners) is underused. A tax professional or free resource like the CFPB's website can calculate the credit for a specific situation — no book covers this better than a direct IRS lookup.