Saving for retirement can stretch your budget, especially if you are an hourly, part-time, or contract employee and don’t have retirement benefits at work. But you’ll need to have savings when you reach retirement age, so it’s important to take charge of your retirement planning now even if your employer isn’t providing help. Fortunately, you can set up a retirement account and begin saving without any involvement from your employer. And it doesn’t take a lot of money to get started.

Why saving for retirement is important

Saving for retirement matters because you’ll need money to live on when you retire. In the US, Social Security can provide some of the support you’ll need, but keep in mind that Social Security isn’t meant to replace all your earnings or fully fund your retirement. On average, the Social Security Administration says that its benefits cover about 40 percent of a person’s income. That percentage is a bit higher for people with below-average earnings, and you may not need to replace 100 percent of your earnings if you cut down on spending in retirement. But even so, you generally can’t rely on Social Security to give you all the income you need.

And you want to start saving for retirement as soon as possible so that the power of compound interest is on your side. Thanks to compound returns, the money that you invest now can grow into a large nest egg over the next few decades. But if you wait until you’re close to retirement age to start saving, you won’t have many years to accumulate interest and you’ll miss out on the returns you could have earned.

How much to save

Financial advisors usually recommend that people save 15 to 20 percent of their income each year for retirement. And they often suggest that people aim to save a total amount that’s 25 times the annual expenses they’ll need in retirement.

Here’s an example of how the math works out. Maybe you’ll need to have 80 percent of your current income to spend in retirement, and you expect Social Security to cover 45 percent of your income. That leaves 35 percent of your income to be drawn from your savings. If you make $30,000 a year, 35 percent of your income is $10,500 annually. Multiply that by 25, and you should aim to save $262,500 total before you retire.

Using an investment calculator, you can see that by investing 15 percent of your income, or $375 per month, at a rate of return of 8 percent, you can meet your savings goal after about 23 years.

How to make saving a priority

If you’re able to start saving 15 percent or more of your income, you should. But if you’re living paycheck to paycheck, saving such a large portion of your earnings might not be possible. So what should you do instead? First, open retirement savings account at a bank or credit union. The minimum deposit banks ask for is often $100 or less, so you can begin saving without committing a lot of money. Then when you have more room in your budget, the account is already set up and you can jump right into saving.

If you can’t save 15 percent at the moment, try to at least save a small amount each month. Is there a small expense that you can give up, like a weekly cup of coffee or a movie ticket? Put that money in your retirement account instead. You may find that you can cut other expenses and add more to your savings. Trimming your budget by 1 or 2 percent and directing that money toward retirement savings can get you on the right track, and you can gradually increase your savings rate until you reach 15 percent.

Another strategy is to save your entire tax refund. This money has already been withheld from your paycheck, so you might not miss it as much as money that you took home and planned to spend. When you get your refund, deposit it in a retirement savings account instead of your checking account. Plan to do this every year. When you happen to get a large refund, it can give your retirement savings a big boost.

It’s also a good idea to save more if you get a raise. If your income goes up, plan to save a larger portion of that additional income—such as 30 or 40 percent. For example, if you get a raise of $4,000 a year, plan to save $1,200 to $1,600 of that money. Saving a large portion of an increase in earnings can help make up for the time when you didn’t save much because your income was lower. To make it more likely that you’ll follow through, write down your intention to save, and set up an automatic transfer to your retirement account as soon as you get a pay increase.