Rachael Parenta, a comedian in her 30s living in Brooklyn, does better than most. "I probably save a quarter of my income, but I don't do a good job of remembering to put it into my IRAs, so it sits in a savings account that accrues nearly no interest, which is one of the reasons I'm buying a house." Parenta and her husband are looking to purchase a two-family home as a means of supplementing their income and investing for the future. "'They aren't making any more land,' as Will Rogers and Lex Luthor said," she quipped.
Parenta has a regular IRA, as well as a Roth IRA and SEP. All three are invested in a range of mutual funds. She doesn't think she's saving enough, though. "I don't make a great amount of money, so it's hard to plan for retirement, pay expenses and maybe go to a bar now and again to live my life in the present moment with friends. How do you save for the future while also surviving in the present?"
Read MoreA real estate investment opportunity that may be ending
It's not uncommon for workers to accumulate several retirement plans over the years, such as a corporate-sponsored 401(k) from a former employer. If these plans have good investment options and low fees, there's no need to roll them over into a combined account.
But there's a catch: Any plan participant with $5,000 or more in a 401(k) plan can never be kicked out of the plan by a corporate sponsor, by law, but 401(k) account balances below $5,000 are not guaranteed placement in the plan—a plan sponsor could ultimately cut the participant a check (taxable) for the balance if the participant does not roll the money over into another 401(k) or IRA account.
Blanchett of Morningstar said more employers are allowing all former employees to stay in a 401(k) regardless of account balances, but former employees need to verify this policy exists. The advantage to staying in a 401(k) rather than rolling over to an IRA, if allowed, is that 401(k) plan account fees and underlying fund-management fees are typically lower than individual IRA fees—though 401(k) plans at very small companies may not be any more cost-attractive than an IRA. The negative to staying in a company 401(k) is that IRAs are more flexible when it comes to distribution policy, including emergency withdrawals.
Boston-based registered investment advisory firm The Colony Group vice chair Bob Glovsky recommends individual 401(k) plans as generally the best bet for independent contractors due to their flexibility and high savings limits.