4 Ways Saving for Retirement Is Actually Easier Today
Written by
Andrea Norris
Edited by
Gary Dudak
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Do you think saving enough for retirement will be harder for you than for your parent’s generation? It’s a common sentiment. A recent CNBC retirement survey revealed that most American workers — 82% — believe they face greater challenges to achieving a comfortable retirement than earlier generations.
The cost of living remains high, making saving difficult. Life expectancy continues to climb, so a bigger nest egg is required. Plus, the future of Social Security remains in question.
So it’s understandable that only 18% of survey respondents believe it will be easier than their parents to retire comfortably. But maybe the 18% are right. Here are four ways retirement savings is actually easier today than for older generations.
Today’s Savers Have Greater Account Options and Flexibility
According to U.S. Bureau of Labor data, only about 15% of private industry employees currently have access to a defined benefit plan, also known as a traditional pension. While you may not have a pension, you have more retirement saving options.
Traditional IRAs were introduced in 1974, but it wasn’t until 1980 that some employers began transitioning from pensions to traditional 401(k) plans. Roth accounts weren’t available until 1998. Before 2001, older savers couldn’t make catch-up contributions to retirement plans. As recently as 2019 and 2022, the SECURE Act and SECURE 2.0 Act have provided even more retirement-related provisions for savers of all ages.
Today’s retirement savings options offer greater flexibility, making it easier to tailor your retirement strategy to your specific savings needs. For instance, a traditional 401(k) or IRA can save you on taxes. If you grow your money in a Roth account, the tax savings come when you withdraw funds in retirement.
Financial Education Is Just a Few Clicks Away
To learn about retirement savings options and investing before the internet, you often had to attend a seminar, take a class, or read books and publications that you could only get at a library, bookstore or through a mail subscription. Today, financial information is just a quick search away on your phone or computer.
Countless free resources are available online explaining everything from 401(k)s to Roth IRAs, whether you prefer to read an article, watch a video or take a course. You can also access investment calculators to determine how much you need to save to reach your retirement goal. With so much information at your fingertips, it’s easier to understand how different retirement accounts work, how to take advantage of tax benefits, and even how much you should contribute each month.
Investing Is More Accessible and Affordable
Thanks to technology, particularly robo-advisors, you no longer need much money to be an investor.
Consider how easy it is to open and manage an IRA online. Several banks and investment firms have low or no minimum opening deposit requirements. Some even allow you to choose the type of investing expertise — and fees — you can afford, whether a self-directed option, a robo-advisor’s algorithms or a professional advisor’s help. Plus, most have free and paid tools to guide you in managing your IRA portfolio.
More Opportunities Exist To Boost Retirement Savings
The internet has made it very easy to start a side gig or find remote work opportunities that can enable you to earn extra money to boost retirement savings and grow your nest egg faster. Whether freelancing, performing gig work, starting a small online business or offering a service from home, you can earn on your terms.
These opportunities are more flexible than traditional part-time jobs, so you can fit them around your lifestyle and schedule, enabling you to save more without sacrificing too much of your time.
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