Workers offered payroll-reduction retirement plans at work are 15 times more likely to save for their retirement, but only about half of all private sector workers are offered those plans. And this isn't just a challenge for low-wage work. More than 12 million employees in the top two earning quintiles ($40,000 or more) did not have access to a workplace plan. Even among top-quintile earners ($63,500 or more), over 25% are not offered a retirement plan at work.
So what should you do if you're making a great salary but aren't offered a retirement plan?
"If you are an employee in a high-earning profession and have taken a job in a start-up or small business, don’t be surprised if there’s no retirement program in place," says Angela Antonelli, the research professor and executive director of the Center for Retirement Initiatives at Georgetown University's McCourt School of Public Policy. She studies and advocates for programs that increase Americans' access to plans, but is also acutely aware of the challenges of not having one.
In the tips below, she offers advice for high earners who don't have a work benefit program.
And in the Retirement Checkup special feature, Antonelli and other experts prescribe best practices across every level of preparedness.
"Research shows that for many people, inertia can set in because it is too easy to put off figuring out how to save if their employer doesn’t help them. You need to take action."
"Review your retirement goals so you know how much you need to save now to stay on track. Online retirement calculators can help you estimate the amount, like this one from AARP. You will need to be disciplined and plan to set funds aside from each paycheck to fund a retirement account."
Know Your Limits
"Because of contribution limits on individual retirement accounts (IRAs), you may find you will need to explore other tax-advantaged options for saving, such as annuities or health savings accounts."
Be Realistic About Your Involvement
"You also need to decide how involved you want to be. If a lot – you can open accounts on your own through a financial services company. If you’d rather be hands-off, but still informed, use a financial advisor to help you navigate options and explain pros and cons."