Contributing 15% to your 401(k) each year
As of 2023, 73% of private industry workers had access to retirement plans through their employer, according to Bureau of Labor Statistics data. However, a quarter of that group chose not to take advantage of them.
And a recent CNBC Your Money Survey found that some workers aren’t necessarily making the most out of their employer-sponsored plans, with 8% saving only the automatic default amount, and 24% putting away as much as their employer will match.
Of course, not all companies offer 401(k) plans — but there are other options for saving for retirement, like a traditional IRA or Roth IRA.
There are plenty of options when it comes to investing with an IRA.
Opting for a gold IRA gives you the opportunity to hedge against market volatility by allowing you to invest directly in physical precious metals rather than stocks and bonds.
If you’d like to convert an existing IRA into a gold IRA, companies typically offer 100% free rollover. Others might offer free gold, silver or other metals up to a certain amount when you make a qualifying purchase.
You can check out our top picks for industry-leading companies offering gold IRAs.
Compare offers instantly and request a free information guide to help you understand how to diversify your portfolio and secure your retirement fund.
O’Leary says Americans should be investing 15% of their annual salary — assuming an average salary of around $60,000 a year — into a 401(k) at minimum to successfully retire.
He points to the abundance of investment apps, which make investing in the stock market far more accessible to the average person than it used to be.
An automated investing platform like Acorns can help you invest your money in a way that best aligns with your financial goals without having to think about it.
Acorns automatically rounds up each purchase you make on your linked cards to the nearest dollar, investing the spare change into a diversified portfolio of ETFs.
The Acorns Gold plan offers a 3% IRA match on contributions, plus the ability to pick your own individual stocks.
If you sign up with Acorns today, you can receive a $20 bonus to kickstart your investing journey.
'Put 15% away'
The interest rate on deposits held at major banks is nearly 0%. Wells Fargo, Chase and Bank of America offer entry-level rates of 0.01% on these deposits.
Given that the Federal Reserve’s benchmark interest rates are between 4.25 - 4.50%, bank deposit rates certainly appear like a bad deal.
A survey of 8.3 million Chase customers by JP Morgan found that the median cash balance in a checking account was around $6,600 depending on income bracket, as of February 2024. That’s a lot of money in aggregate that isn’t earning much interest.
You can start earning money on those balances by locking away a portion of your cash in a savings vehicle like a certificate of deposit (CD).
The question then becomes which rate and term should you choose? The downside to CDs is that you can't withdraw any funds until the end of your chosen term or else you'll face penalty fees.
SavingsAccounts.com allows you to easily compare CDs terms and rates from top banks and financial institutions nationwide,.
Simplify the process of choosing the right CD with clear, up-to-date information that gives you peace of mind while you grow your cash.
If you need your cash to be more accessible, you can also consider Public’s high-yield cash account, offering a competitive 4.1% APY on uninvested fund.
Public is a leading social investing platform that allows individual investors access to assets like stocks, ETFs, crypto, and more, with group forums and expert advice that helps you to make informed financial decisions and build a diversified portfolio with community support.
To help get the most out of the disciplined approach, you should consider all your options. Check out the Moneywise list of the Best High Yield Savings Accounts to find more accounts with an APY higher than the U.S. national average of 0.46%.
Research shows Americans require over $1M for retirement
Northwestern Mutual's 2024 Progress and Planning Study found adults expect they need $1.46 million in savings to retire comfortably — an increase of 15% from last year. While many experts, including O’Leary, advocate for setting retirement funds aside as early as possible, most Americans are juggling other financial responsibilities, like mortgages or student loans.
You can build your own circle of competency with trusted advisors who bring their expertise on growing wealth — and Advisor.com can help you find a financial professional that’s right for you.
Advisor.com is a free online platform that connects you with vetted financial advisors. Just answer a few quick questions about yourself and your finances, and the platform will match you with experienced financial professionals best suited to help you develop a plan to achieve your financial goals.
You can view the advisors’ profiles, read past client reviews, and schedule an initial consultation for free with no obligation to hire.
There is also an accessible family office option for established investors with larger portfolios.
