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A retirement crisis is on the horizon, largely because many Americans aren’t saving enough for their retirement.

22.0% of retirement-age adults were still working in March 2024, according to LendingTree, and the average retirement account balance ranged from a high of $448,500 in Massachusetts to only $286,600 in Nevada. With estimates for an ideal retirement account ranging from $1.5 million to over $2 million, a comfortable retirement may be unobtainable for many Americans.

To address this, one-fifth of U.S. states have enacted automatic individual retirement accounts (auto-IRAs) as of July 1, 2024, according to Georgetown University’s Center for Retirement Initiatives.

Nearly all other states are exploring or implementing similar state-facilitated savings programs to help private sector workers without workplace retirement plans. Does your state offer one, and are you eligible?

What are auto-IRAs and why are they needed?

Many Americans struggle to save for retirement, particularly those without access to employer-sponsored plans like 401(k)s. This savings gap has left over 56 million private sector workers at risk, according to the University of Pennsylvania.

Only about seven out of 10 workers in the U.S. have access to either a defined contribution or defined benefit pension plan, according to the Congressional Research Service, and the numbers are much worse among certain demographics.

Whether you have access to a plan or not, you’ll likely need help planning a secure retirement. With the help of a professional, like those found through WiserAdvisor, you can explore your retirement options and create a personalized plan for your golden years.

WiserAdvisor is a free service that matches you with pre-screened financial advisors who can help you achieve your goals. Simply answer a few questions, and WiserAdvisor will connect you with two to three personalized matches, offering free, no-obligation consultations.

Auto-IRAs aim to bridge the savings gap by providing state-offered retirement plans to private-sector employees without traditional workplace retirement options.

Active in 10 states, including California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, New Jersey, Oregon and Virginia (though plans vary), these programs automatically enroll eligible workers unless they opt out. Contributions typically go to Roth IRAs, which are not tax-deductible, though some plans offer traditional IRA options. Default contribution rates usually range from 3% to 5% of income, with some plans increasing rates over time to 8% or more.

Employer contributions are generally not permitted, but auto-IRAs simplify saving and encourage long-term financial planning.

Auto-IRAs appear to be achieving their objectives

Auto-IRAs aim to jumpstart retirement savings by automatically enrolling workers, and they appear to be effective.

Research by Gusto, a payroll and benefits company, shows workers in states with auto-IRA programs are 20% more likely to contribute to a retirement account, with average contributions increasing by 18% across all plans. For workers earning a median income or less, the impact is even greater, with their average savings rate rising by 55%. If you’re eligible for an auto-IRA, it’s worth understanding the program and considering contributing the maximum amount to grow your nest egg faster.

Alternate IRAs

While setting up a traditional IRA or Roth IRA is a key first step in securing your retirement, the volatility of the stock market means that alternative investments can be critical for protecting your retirement fund.

Securing your financial future can be as simple as diversifying your portfolio with a gold IRA. Gold prices surged in 2024, now standing at about $2,700 per ounce.

With firms like American Hartford Gold, specializing in gold IRAs, you can take advantage of the steady rises in gold prices.

Unlike traditional retirement accounts that rely on stocks and bonds, a gold IRA allows you to invest in tangible assets, providing stability and protection against inflation and market volatility.

This service is ideal for retirement savers looking to shield their portfolios from economic uncertainties while achieving diversification. American Hartford Gold provides expert guidance to help navigate the complexities of setting up and managing a Gold IRA, along with secure storage through IRS-approved depositories.

With customizable options, competitive pricing, and educational resources, the AHG gold IRA service is tailored to meet individual financial goals.

For those looking to maximize their tax-advantaged savings, a Roth IRA is an excellent option, and RothIRA.org makes it easy to get started.

This free matching service connects you with pre-screened financial advisors who specialize in Roth IRAs, offering personalized guidance to help you open and manage your account effectively.

With RothIRA.org, the process is simple. Answer a few questions about your financial goals, and you’ll be matched with two to three advisors for a free, no-obligation consultation.

These advisors help you navigate the benefits of a Roth IRA, such as tax-free withdrawals in retirement and the potential for significant savings growth. Whether you’re new to IRAs or looking to optimize your retirement strategy, RothIRA.org provides the support you need to ensure your savings work harder for you.

And if you’re looking for a more automated DIY way to save and invest while going about your everyday life, try Acorns.

By rounding up your debit and credit card purchases to the nearest dollar and investing the spare change, Acorns helps you build a diversified portfolio effortlessly. This innovative approach allows you to grow your savings while completing routine purchases.

New users can take advantage of a $20 bonus investment when they sign up with a recurring investment.

For those focused on retirement, Acorns Silver includes a 1% IRA match, while Acorns Gold offers a 3% match and the option to customize your portfolio by selecting individual stocks. These features make Acorns an excellent choice for turning spare change into meaningful investments and setting yourself up for long-term financial success.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.