About 56 million American workers can’t save for retirement through their jobs, CBS News reports, citing Pew Charitable Trusts data.
That’s nearly half of private-sector employees who miss out on automatic paycheck deductions and employer matches that make 401(k)s such effective savings tools.
The gap is most severe for workers earning $37,000 or less. The Economic Innovation Group found that 70% in this income bracket don’t have employer-sponsored plans.
Without those payroll deductions, many spend every dollar just to stay afloat, leaving little for the future.
Labor economist Teresa Ghilarducci told CBS this isn’t just a gap — it’s a full-blown crisis for the millions shut out of workplace plans.
The hidden cost of going it alone
Pew’s research shows workers without employer plans face an uphill battle. People are 15 times more likely to save when money is deducted automatically from their paychecks.
Without that system, one-third say they simply have nothing left by month’s end.
CBS News reports the long-term impact is stark. Approximately 30% of Americans aged 59 and older have no retirement savings.
And for the 40% of Social Security recipients who rely on those benefits as their sole income, projected cuts in 2034 could create serious hardship.
Your DIY retirement toolkit
Even without a 401(k), there are ways to build retirement savings. The key is picking the right accounts and setting up automatic contributions, just like an employer plan.
Traditional and Roth IRAs are the most common options. Traditional IRAs offer an upfront tax break, while Roth IRAs let savings grow tax-free for retirement. Many brokers allow automatic monthly transfers from checking, creating a steady habit.
For freelancers and gig workers, a Solo 401(k) can be a strong choice. It lets anyone with self-employment income make substantial retirement contributions.
CBS News notes that state-sponsored retirement programs are also expanding.
Plans like California’s CalSavers, Illinois’ Secure Choice, and OregonSaves automatically deduct a percentage from paychecks unless workers opt out.
These programs are helping millions start saving who might otherwise have nothing set aside, CBS News reports.
Making it happen on any budget
It often makes sense to start with what fits your situation. Even putting aside $25 a month can be more valuable than waiting for a better time, and contributions can always be increased later.
Automating contributions may help keep savings on track. Many people schedule a monthly transfer from checking to an IRA right after payday so it functions like a regular bill. With many state plans defaulting to 3% of income, that figure could be a useful starting benchmark, CBS notes.
Working toward a target percentage is another option to consider. Financial planners frequently recommend setting aside 10% to 15% of income for retirement.
But smaller amounts still build momentum and benefit from compounding over time. For instance, a 30-year-old who saves $50 each month might still accumulate meaningful assets by age 65, depending on investment returns.
Choosing low-cost investments can also make a difference. Target-date funds automatically adjust allocations over time and typically charge annual fees of less than 0.20%.
Robo-advisors from companies like Vanguard, Schwab, or Fidelity provide professional management for smaller accounts, frequently with no required minimums.
Small steps still build a future
The retirement savings gap is real, but it doesn’t have to define your future. Even though millions of workers lack employer plans, there are still ways to build money over time.
Often, the biggest setback isn’t choosing the wrong strategy. It’s waiting too long to start. Taking small steps now can pay off far more than holding out for the perfect plan.
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