It's hard to go a day without being reminded of the need to save for retirement. Financial services advertisements online and on television and advice videos on social media platforms are just some of the means through which retirement investment professionals market their services. While the ever-present messaging can feel a little overwhelming at times, the fact remains that saving for retirement is incredibly important.
Despite the emphasis on saving for retirement, many adults simply aren't saving enough. According to the Vanguard Retirement Outlook released in October 2025, just 42 percent of Americans are on track to achieving retirement security. And that percentage is even lower among older generations, as Vanguard notes just 40 percent of baby boomers or Gen Z workers are on track for retirement. Vanguard estimates indicate that median-income baby boomers will face an annual spending shortfall of $9,000.
Such figures are alarming, but it's important to note that there are many ways to build a robust retirement nest egg, even for those workers for whom retirement is on the horizon.
- Start saving early. The earlier people begin saving for retirement, the more likely they are to achieve retirement security. While that's no great surprise, it might surprise younger workers just how much more they can save for retirement if they start saving at a young age compared to delaying retirement saving until they reach 30. For example, a 25-year-old who earns 7 percent returns on a $50 weekly retirement account contribution will have roughly $537,000 upon retiring at 65. Someone who makes the same contributions and earns the same returns but waits until age 30 to start saving will have less than $375,000 in their account at age 65.
- Contribute as much as possible to pre-tax retirement accounts. Arguably the easiest and least disruptive way to save more for retirement is to increase your contributions to an employer-sponsored retirement account. Contributions to accounts like a 401(k) are deducted from your paycheck prior to taxes being taken out, so the overall impact on your take-home pay when increasing contributions by 1 or 2 percent is unlikely to be so significant as to upset your cash flow. But increasing contributions by 1 or 2 percent could lead to considerable growth of your retirement savings over time.
- Match your employer's match. Many employers match 401(k) plan contributions up to a certain percentage (2 percent is a common match figure). Professionals seeking to save more for retirement can resolve to match whatever percentage their employer matches. If an employer matches 2 percent, employees can then increase their contributions by 2 percent. Under such a scenario, professionals who initially intended to contribute 6 percent to their 401(k) can increase those contributions to 10 percent without greatly affecting their take-home pay.
- Redirect disposable income from nonessential expenses into investment accounts. It's easily overlooked, but redirecting a certain percentage of "disposable" income into a retirement investment vehicle like an IRA is a great way to build a nest egg. The cost of nonessential items like entertainment and travel has risen dramatically in recent years. Adults accustomed to spending extra on sports or concert tickets or a second or third annual getaway can redirect those expenditures into retirement investment vehicles. While it's a sacrifice to give up such pleasures, doing so can be just what people need to avoid a spending shortfall in retirement.
Many working professionals are facing a potential financial shortfall in retirement. But there are many simple ways to avoid such a fate
