5 Best Ways To Grow Wealth and Save for Retirement, According to Investors
Written by
Gabrielle Olya
Edited by
Ashleigh Ray
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Investing in stocks can be a wise strategy for growing wealth in both the short and long term — but is it the best way?
To find out what stock investors themselves believe, Empower surveyed over 1,000 American investors to find out what they view as the best ways to grow wealth and save for retirement.
Here’s a look at their top five methods, plus, what financial professionals believe are truly the most effective ways.
Stock Growth
It should come as no surprise that many current stock investors view stock growth as one of the best ways to grow wealth and save for retirement, with 50% selecting it as a top way to achieve these goals.
Keith Jones, senior financial advisor at Empower, believes that investing in stocks is not only effective, but its accessibility makes it a top choice as well.
“In general, stocks are the most easily accessible investment option for the average investor,” he said.
Employer Retirement Plans
Tied with stock growth as the most popular choice, 50% of investors view participating in an employer retirement plan as one of the best ways to grow wealth and save for retirement.
For those with access to these plans, Jones said they can be a great tool for building long-term wealth.
“Having an employer-sponsored plan that pulls money out of your paycheck every month is often the simplest way to begin your savings journey,” he said.
Salary Increases
The more money you make, the more you can set aside for financial goals, so it makes sense that 32% of investors see salary increases as a top way to grow your nest egg. However, Jones doesn’t believe you should be reliant on raises to achieve money milestones.
“Salary increases can be a valuable way to increase your long-term wealth generation, but they should not be the primary method of reaching your financial goals,” he said. “The best way to position yourself for success is by controlling what you can control.
“You may not always get a raise every year, but you can control how much you spend and save. Being disciplined with savings over time is the most important controllable factor when it comes to long-term wealth generation.”
Individual Retirement Accounts (IRAs)
Thirty-two percent of investors also view an IRA as one of the best ways to grow wealth and save for retirement. Jones believes these can be an effective tool, even if you also have access to an employer-sponsored retirement plan.
“While IRAs generally operate similarly to 401(k) [plans] and other employer-sponsored plans, there are some key differences,” he said. “One primary advantage of an IRA is that you can invest in most anything, whereas employer-sponsored plans typically provide a list of options for you to choose from.
“However, the maximum contribution limit for IRAs is typically much lower than an employer-sponsored plan, and there can be income restrictions. IRAs can be a great vehicle in addition to employer-sponsored plans.”
Owning Real Estate
Slightly less than a third of investors (29%) view owning real estate as a top way to grow wealth and save for retirement. Andrew Latham, certified financial planner and director of content at SuperMoney, agrees that this can be an effective investment.
“Owning real estate is often considered a fundamental component of long-term wealth building due to its potential for capital appreciation and the ability to generate rental income,” he said. “Historically, real estate investments have offered a hedge against inflation and a relatively stable return compared to more volatile assets like stocks. However, it’s essential to recognize that real estate investment also involves risks such as market fluctuations, property management challenges and liquidity issues.”
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