Save and Invest

62% of Americans say they're behind on saving for retirement—here are 4 ways to catch up

John Krasinski as Jim Halpert in the NBC show "The Office."
NBC | Getty Images

If you're feeling behind when it comes to saving for retirement, you're not alone: Most Americans, 62%, say they need to catch up.

That's according to a 2019 TD Ameritrade report, which surveyed 1,015 U.S. adults ages 23 and older with at least $10,000 in investable assets.

When asked why they've fallen behind on their retirement savings, the responses varied by generation: The No. 1 response for millennials (ages 23-38) was housing costs (37% cited it), while the top response for Gen X (ages 39-54) was inadequate income (31% cited it).

td ameritrade report

No matter where you're starting, there are ways to increase your savings without without feeling cash strapped or making any drastic lifestyle changes. Here are four effective strategies.

1. Put your money to work today

The sooner you start saving and investing, the less you'll have to save each month to reach your goals, thanks to the power of compound interest.

If you start at 23, for instance, you only have to save about $14 a day, or $420 a month, to be a millionaire by 67. That's assuming a 6% average annual investment return. If you start at 35, on the other hand, you'd have to set aside $30 a day, or $900 a month, to reach seven figures by 67.

One of the simplest ways to get started is to fund your employer-sponsored 401(k) plan. If your company doesn't offer one, or you're self-employed, consider other options, like contributing to a traditional or Roth IRA.

2. Automate your contributions

If you automate your retirement savings — meaning, you have a portion of your paycheck sent directly to a retirement account, such as a 401(k), Roth IRA or traditional IRA — you'll never even see the money you're setting aside and will learn to live without it.

Ideally, you'll want to work your way up to saving at least 10% of your pretax income, but if you're only comfortable with putting away 1%, start there and gradually increase your contributions.

Once you've set up automatic transfers, check to see if you can also set up "auto-increase," which allows you to choose the percentage you want to increase your contributions by and how often. This way, you won't forget to up your savings or talk yourself out of setting aside a larger chunk when the time comes.

If you can't find the feature online, call your retirement plan provider to find out if it's possible.

VIDEO1:5101:51
The definitive guide to retirement savings plans

3. Take advantage of your company match

If your company offers a 401(k) plan, they may also offer a 401(k) match, which is essentially "free" money. But it's up to you to take advantage of it.

These programs are pretty straightforward. Typically, your employer will match whatever contribution you put toward your 401(k) up to a certain amount. If you choose to put 5% of your salary directly into your account and your employer matches dollar-for-dollar, then it will put that same amount in as well, in effect doubling your contribution. And whatever money your company contributes doesn't count towards the IRS contribution limit. The median matching level is 4% among Vanguard 401(k) plans.

Note that depending on where you work, the match sometimes comes with stipulations. You may have to work at the company for a certain amount of time before it goes into effect, for instance.

4. Increase your income

The more money you bring in, the more you can put toward savings. The simplest way to increase your income may be to negotiate a raise.

Next, develop another income stream in addition to your regular job. That could mean starting your own business in your free time, generating passive income or picking up a high-paying side job.

Need inspiration? Check out how one millennial turned $200 into $1 million by selling Kevlar pants online and how Daymond John built a billion-dollar brand while living on the tips he made waiting tables at Red Lobster.

Don't miss: How much millennials earn, compared to what their parents made at the same age

Like this story? Subscribe to CNBC Make It on YouTube!

VIDEO5:5205:52
How a 23-year-old making $172,000 in New York City spends his money
make it

Stay in the loop

Sign Up

About Us

Learn More

Follow Us

CNBC.COM