My aging parents rely 100% on Social Security to get by. They are struggling but I can’t afford to give them money — what can I do to ensure I don’t end up like them?

Prioritize retirement savings

Retirement might seem far in the future, but failing to save early could leave you facing financial woes similar to those your parents may experience. By prioritizing savings now, you significantly increase your chances of a comfortable life in your later years.

Starting early makes the process much easier. For example, if you start saving 40 years before retirement and earn a 7% return, you only need to invest $417.42 monthly to reach a millionaire. But, if you wait and start just 10 years before retirement, you'd need to invest an impossible sum of $6,031.45 monthly to achieve the same goal.

This reality means that retirement savings must take precedence over helping your parents or covering short-term needs and wants. Even if you can only save a small amount right now, open a brokerage account and get started. The power of compound interest will work in your favor.

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Set clear, achievable goals

Setting a clear goal is also important, especially if you're struggling financially and don't know if you can fit retirement savings into your budget.

Ideally, you should aim for a retirement fund worth about 10 times your final salary. Use tools like the calculators on Investor.gov to determine how much you need to save each month. Simply input your target savings amount, current salary and the number of years left until retirement to learn how much to save each month.

Once you know your target, do everything possible to achieve it. If you need to save $600 a month, make cuts to your budget or pick up a side gig for a few hours each month to come up with that money. It's much better to make sacrifices now when you're still young than when you're retired and have fewer choices.

Maximize tax benefits

Uncle Sam will help you achieve your savings goals if you use the right kind of accounts to invest. Ensure you've signed up for your 401(k) at work or have an Individual Retirement Account (IRA). Contributions to these tax-advantaged accounts reduce your taxable income, lessening the impact on your take-home pay.

For instance, if you invest $6,000 a year in a 401(k) or IRA and fall within the 22% tax bracket, your taxable income decreases by $6,000, saving you up to $1,320 on taxes. This means your $6,000 investment effectively costs only $4,680 due to the tax savings.

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Automate your savings

Finally, try to automate the process of saving so you don't end up broke like your parents. If you make saving the automatic default that happens without any effort, you're less likely to miss a contribution.

If you take these steps, you can make sure you don't have to live on Social Security alone. Since you can see first-hand how hard it is for your parents to do that, it's worth making every effort to avoid that fate for your future.