People Aren’t Saving Enough. How To Bump Your Retirement Savings Into High Gear

On Friday I talked about a study that I had read from the Employee Benefit Research Institute that gave the average retirement savings by age group. The numbers that it reported were quite scary to say the least.

The report showed that 60% of workers of all age groups had less than $25,000 in savings. 80% had less than $100,000. Even when you look at those who were closer to retirement, ages 55+, 60% of them had less than $100,000 saved for retirement. Their average retirement savings for that age group was only $65,000, and the younger age groups had even less!

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The numbers are sobering, but the good news is that you don’t have to be average. You can rise above and be one of the outliers in studies like these. Bump your retirement savings into high gear and become an example of how to succeed at saving for retirement.

Why Are People Not Saving For Retirement?

The question I have is why aren’t people saving for retirement, or saving enough? Some of the possible reasons I’ve come up with and found online include:

  • They think Social Security will be enough.
  • They’re not able to save after monthly expenses.
  • They don’t plan on ever retiring.
  • They underestimate how long they’ll live in retirement.
  • Family will take care of them.

There are a myriad of reasons why people aren’t saving enough for retirement, and many of them are based on false assumptions. People assume that they won’t need as much as they will in retirement, or that they won’t live as long as they do. They assume that the government will take care of them through Social Security, but the program is already heading towards insolvency. People assume they’ll work into old age, but they end up becoming ill.

While there often isn’t much you can do to save more if you’re underemployed or unemployed (which is a very real possibility these days), for most people there are things you can do to cut back on your expenses, increase your income and bump your retirement savings into high gear.

Kicking Your Retirement Savings Into High Gear

bump retirement savings into high gearKicking your retirement savings into high gear can only happen when you’re in a position where you’re not constantly dealing with a ton of debt, or other obligations. So what can you do to get to a place where you can start maxing out your accounts?

So once you’ve gotten rid of your debt, cut back on extraneous expenses, and set about increasing income, where are the best places to get started investing?

Best Places To Open A Retirement Account

If you don’t have a company 401(k) or don’t get a company match on your investments, getting started with investing is as easy as opening a Roth or Traditional IRA with the brokerage or mutual fund company of your choice.

Where are some of the best places to open a retirement account? There are a few places that I recommend that I either use myself or have heard rave reviews about. They are easy to use and open an account, have low costs and can be used by just about anyone. Here are my top 6.


$25 BonusI currently have a Roth IRA and regular taxable investment account with Betterment is a great choice for people who are just getting started investing, or for people that want to invest but don’t want to spend a lot of time worrying about doing research, re-allocating investments, etc.

Betterment basically has two baskets, a bond ETF basket and a stock ETF basket – and you just choose your risk tolerance using their tools and choose an allocation of stocks to bonds. The company will then allocate your funds and regularly balance your portfolio so that you stay on track towards your goals.

Betterment is exceedingly simple to use and the fees they charge are low and reasonable.

Also, if you open an account now, you get $25 if you open an account with at least $250.

Open an account with


wealthfront reviewI recently became aware of the investment service Wealthfront.  Like Betterment, Wealthfront offers highly diversified ETF index fund investing, at an extremely affordable rate.  They use Modern Portfolio Theory along with a risk tolerance assessment when you sign up to put together a portfolio that fits your goals.

While they do have a $5000 account minimum, what they  have going for them is that your investments are managed for you for FREE – up to $10,000 of investments.  You can get even more managed for free by referring other users.  They’re definitely one of my top recommendations for newer investors if you can swing the $5000 initial investment (because they’re free!)

Open an account with 


vanguardVanguard is another one of my favorite companies. They’re known for their great low cost mutual funds, many of them index funds with low initial investments of around $1000. If you’re just getting started they are a great place to invest, and you can setup a simple 3 fund portfolio that allows you to get a broad diversification across the entire stock market – with some of the lowest fees in the industry.

Vanguard has consistently been the lowest cost fund provider over the past 30+ years, and since the name of the game when investing for the long term is minimizing costs, Vanguard should be at the top of your list.

Open an account with

TD Ameritrade

TD Ameritrade has been consistently rated as one of the top brokers in the industry. In fact, Barron’s 2013 online broker ratings listed TD Ameritrade as their top pick for long term investing, as well as top pick for novice investors.

Why are they rated so highly? Low cost, their online trading tools, research and education tools are second to none. Plus, opening a retirement account with them is simple and shouldn’t take more than 15-20 minutes – so no excuses on that point!

Also, when you open an account now you can trade free for 60 days and get up to $600 in cash bonuses deposited into your account.

Open an account with TD Ameritrade


scottradeScottrade has been consistently been rated as one of the top online brokers and in 2013 Barron’s listed them as the top pick for in-person service. They have over 500 physical branches where you can stop by and ask for help, or sign up for one of their educational seminars.

Not only do they offer superior customer service but they’ve got low $7 online trades and an easy to use website.

Open an account with Scottrade


E*Trade is another great option for long term investors and novice investors. They were listed in the top 5 of both categories in Barron’s online broker rankings for this year. They are also consistently rated tops in investment choices, customer service and research and tools available to customers.

Signing up is easy and shouldn’t take more than a few minutes. Plus, when you open an account now you can get up to $500 in cash bonuses and 60 days of free trades.

Open an account with E*Trade

Cut Spending, Increase Income, Open An Account And Start Investing

Starting to invest really is as easy as cutting your debts and regular expenditures, finding ways to increase your income (both from your day job and side incomes) and then opening an account with a low cost broker and starting to invest regularly – and automatically – as much as you can. Figure out how much you think you’ll need, figure out how much you’ll need to invest – and start investing it today! When you can, bump up the amounts you invest when income allows.

So have you opened a retirement account and started to invest? If not, why not?

Last Edited: 6th February 2015

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    Share Your Thoughts:

  1. Rhea Vinson says

    Don’t give in to the temptation to pitch in heavily for college without making sure your retirement savings are on track. You may well leave yourself short in the future, especially with retirements now often spanning three decades.

  2. says

    “Change your behavior, make saving a priority:”

    This is by far the most important tip. If you don’t focus on saving or keep putting it off, it will never happen. Saving has to be just as important as paying a bill on time or anything else you perceive to have priority in your life.

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