I'm Retiring With Just $50,000 in Savings. Am I Doomed?

You'll often hear that it's important to consistently fund an IRA or 401(k) over time. And the sooner you begin putting money into one of these accounts, the more opportunity you'll have to benefit from investment gains.

But maybe it was a struggle for you to build retirement savings. Maybe you had to cope with stagnant wages, expensive medical bills, and other costs that got in the way of building a large nest egg.

If you're nearing retirement with just $50,000 in savings, the reality is that you're frankly not in the best shape. The average 60-something has a retirement savings balance of $112,500, according to Northwestern Mutual. Even that, frankly, isn't a ton of money.

So if you have less than half of that, you'll need to be very careful about managing your cash reserves. But you should also know that you're not doomed to a cash-strapped retirement just because you only happen to have $50,000 socked away.

Don't forget about Social Security

Many people struggle to live on Social Security alone in retirement. But the reality is those benefits might help sustain you to a large degree.

The average senior on Social Security today collects $1,848 a month. That's over $22,000 a year. Even if you're only taking a few thousand dollars a year out of your savings because that's all you can afford, there's still another steady source of income you can fall back on.

Part-time work and frugal living could save your retirement

The long-time convention was to stick to a 4% withdrawal rate for retirement savings. So for a $50,000 nest egg, that would mean $2,000 of retirement income a year. Even with a decent chunk of cash from Social Security, that may not be enough to live on. But if you're willing to work part-time in retirement, you may find that you can get by quite well thanks to that added income.

You might also need to make some frugal choices in retirement to compensate for not having a ton of savings. That could mean downsizing to a less expensive home or limiting yourself to local travel instead of taking big trips.

You may also need to be mindful of smaller expenses, too. If money is tight, you may have to stick to one streaming service instead of having multiple. And you might have to mostly cook your own food rather than dine out regularly.

But that doesn't have to lessen your quality of life. If you learn to embrace those things, you can make the best of a limited income. That could, for example, mean broadening your cooking horizons and exploring new recipes you're excited to eat.

In an ideal world, you'd be retiring with a lot more money than $50,000. But if that's all you have to work with, don't assume the worst. With some reasonable lifestyle adjustments, you can set yourself up to enjoy a fulfilling retirement, even if you have to limit your spending.