Millions of Americans are saving for retirement. Some have built big nest eggs and are about to enter their golden years. Others are just getting started on this journey.
Precisely how you save can make a major difference in terms of the amount of money you end up with during your post-work years.
Recently, the Transamerica Center for Retirement Studies asked about 2,400 retired adults where they had their retirement savings. Their answers ran the gamut of available options.
Following are the most popular ways retirees say they saved for retirement.
10. Cryptocurrency
Respondents with this type of retirement savings/investment: 2%
Cryptocurrency is red hot. Bitcoin has surged in value during the latter part of 2024.
Some tout digital currency as the wave of the future, but you can use it to buy many things today, as we report in “6 Surprising Things You Can Buy With Cryptocurrency.”
9. Health savings account
Respondents with this type of retirement savings/investment: 4%
It’s no secret that at Money Talks News, we are big fans of health savings accounts. An HSA offers some of the biggest and best tax advantages you will find in any savings vehicle.
HSAs also offer some surprising perks for retirees, as we point out in “6 Reasons This Is the Best Type of Retirement Account out There.”
8. Real estate other than primary residence
Respondents with this type of retirement savings/investment: 9%
Real estate has built tremendous wealth for many generations of Americans. Income properties also have the advantage of providing steady, continuous passive income well into your golden years.
For more, read “8 Ways to Invest in Real Estate for Retirement.”
7. Annuity
Respondents with this type of retirement savings/investment: 19%
Annuities are a source of fierce debate: Are they a good investment or not?
As it turns out, the answer is largely “it depends.” Money Talks News founder Stacy Johnson has shared his opinion on the topic many times. For more on Stacy’s take, check out:
- “Should You Buy an Annuity? The Pros and Cons“
- “2-Minute Money Manager: Should I Invest In a Fixed Annuity?“
- “2-Minute Money Manager: Should I Get a Variable Annuity?“
6. 401(k) or similar plan
Respondents with this type of retirement savings/investment: 28%
For decades, the 401(k) plan has been the “go-to” account for retirement investing. So, it’s no surprise that nearly half of survey respondents keep retirement savings in these accounts.
Need a little extra motivation to save in your 401(k)? You’ll find it in “Here’s How Much a 401(k) Grows Every 5 Years.”
4. Brokerage account (tie)
Respondents with this type of retirement savings/investment: 35%
Those who are lucky to have extra savings can invest that money in a standard brokerage account after they hit the limits the government imposes on tax-advantaged retirement accounts.
This can be another great pool of money to draw on in retirement.
4. IRA (tie)
Respondents with this type of retirement savings/investment: 35%
An IRA can be a great place to invest for your retirement, particularly if you don’t have a 401(k) plan at work.
However, before investing in an IRA, you must answer a big question: Roth or traditional? Stacy offers some insights in “Which Is Better — a Traditional or Roth Retirement Plan?”
3. Life insurance policy
Respondents with this type of retirement savings/investment: 36%
If you die, would your spouse or other family members be deprived of a large chunk of the income on which they depend? A life insurance policy can protect against this type of calamity.
Some people also purchase permanent life insurance, such as whole or universal policies, with the intention of tapping into its cash value in retirement.
Is that smart? Once again, check out Stacy’s take in “Which Is Better: Term or Whole Life Insurance?”
2. Primary home
Respondents with this type of retirement savings/investment: 48%
You may not need an income property to build riches. As many people have learned in recent years, the place you call home can be a great place to generate wealth in the form of equity.
Just remember that housing prices aren’t always guaranteed to go up so it’s wise to look to other sources to supplement your retirement savings.
1. Bank account
Respondents with this type of retirement savings/investment: 76%
Few things are more financially secure than parking money in a bank account, especially if it’s insured by the Federal Deposit Insurance Corp.
However, putting all of your money in a bank actually creates a big risk in retirement. Money kept in a bank account typically does not earn much of a return. In inflationary times — like those we are living through now — money in savings or checking accounts will likely lose its purchasing power relatively quickly.
So, as with a home, this is not an ideal place to house all your retirement money, even if it is a good option for at least some of your savings.
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