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How to Save for Retirement While Working Part-Time

Jatniel Brito
5 minute read

Part-time workers face unique retirement challenges. Learn strategies to maximize 401(k) access, IRAs, and catch-up contributions.

Working part-time offers flexibility and work-life balance, but it can significantly impact your retirement savings potential. Understanding the challenges and available strategies can help you build a secure financial future despite working fewer hours.

It’s not just about the paycheck. Retirement savings often depend on access to employer-sponsored plans like 401(k)s and the extra boost you get from employer matching contributions. Unfortunately, part-time workers often miss out on one or both of these perks. Unfortunately, part-time workers often miss out on one or both of these perks. Here’s why.

Limited Access to Workplace Retirement Plans

Traditionally, 401(k) plans were reserved for full-time employees. That’s because employers usually set eligibility rules based on hours worked, often around 1,000 hours per year. If you’re working 20 hours a week or juggling multiple part-time jobs, that threshold can be tough to hit.

Without access to a 401(k), you lose the chance to contribute pre-tax dollars that can grow tax-deferred for decades. Over time, that missed opportunity can add up. Even a modest contribution made early in your career can grow significantly thanks to the power of compounding.

The good news is that starting in 2025, the SECURE Act 2.0 requires employers to allow long-term part-time employees who have worked at least 500 hours per year for two consecutive years to participate in their 401(k) plans. Eligibility to participate does not automatically include employer matching contributions.

Missing the Employer Match

One of the biggest advantages of a 401(k) is the employer match, which can help your savings grow a bit faster. Many part-time workers, however, either do not qualify for the match or their employer does not offer one to part-time staff.

Some employers match a percentage of your contributions up to a certain part of your salary, like 50% of what you contribute up to 6% of your pay. Others might offer a dollar-for-dollar match or a tiered structure that rewards higher contributions. 

Even a small difference in contributions can snowball over time. For example, contributing $3,000 annually without a match grows more slowly than $3,000 plus an employer match. Over 20 years, that gap can easily reach tens of thousands of dollars. While employer contributions give your savings a boost, compounding over time is what truly helps your money grow.

Compounding: Time Is Your Secret Weapon

The earlier and more consistently you save, the more your money benefits from compound interest, a snowball effect where your earnings keep building on themselves over time. Missing out on contributions early in your career can make a noticeable dent in your long-term savings.

Even if you start contributing later, catching up can be difficult. Part-time work often coincides with life stages when people are balancing caregiving, school, or other responsibilities. While these years are valuable in other ways, they can also slow down retirement growth if contributions are paused or limited.

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How to Make Up for Lost Ground

If you’re part-time now or planning to be there are ways to help close the retirement gap:

  1. Explore Retirement Accounts You Can Access: If your employer offers a 401(k) to part-time staff, consider signing up. If not, consider a Traditional or Roth IRA, which also requires earned income but has income limits for eligibility.
  2. Maximize Contributions When You Can: Even small, consistent contributions grow over time. If you can, take advantage of catch-up contributions once eligible.
  3. Leverage Every Employer Benefit: If your employer does offer a match, make sure you contribute enough to get the full match. Leaving it on the table is leaving money behind.
  4. Plan Ahead: Understand how your part-time work affects long-term retirement savings. Build a strategy that balances today’s needs with tomorrow’s goals.
  5. Consider Transitioning to Full-Time When Feasible: If increasing your retirement savings is a priority, moving to full-time work, even temporarily, can provide access to benefits and match programs that can accelerate growth.


See the Big Picture of Your Savings with PensionBee

Working part-time doesn’t mean your retirement goals are out of reach, but your savings may grow more slowly than a full-time worker’s. The key is understanding your options. By knowing how 401(k) access, employer matching, and compounded growth work, you can make informed choices to protect your future. If you return to full-time work or find a long-term part-time plan that allows 401(k) contributions, you can potentially boost your savings faster than you might expect.

To make managing your retirement even easier, PensionBee helps you consolidate all your old 401(k)s and IRAs into one transparent account, with ETFs powered by State Street. Many rollovers happen automatically, but if yours needs a little extra attention, our personal rollover managers, called BeeKeepers, are ready to guide you every step of the way. That way, you can focus on growing your savings and planning for the retirement you deserve.

Your investment can go down as well as up. This post, and any associated customer testimonial or third party endorsement, is provided solely for informational and educational purposes, should not be taken as tax, legal, financial or investment advice and is not an offer, solicitation, or recommendation to buy or sell any securities or investments.

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