Five Simple Strategies to Ensure a Happy Retirement
Employer retirement plans are great, but individual responsibility plays a huge role in retirement success. Here's how to empower yourself.


The U.S. retirement system is a powerhouse, offering unparalleled opportunities for individuals to take control of their financial destinies through defined contribution plans like 401(k)s and IRAs. These aren’t just mere savings tools; they are dynamic pathways to financial independence, loaded with tax benefits, employer contributions and the incredible potential of compounding growth. Recent innovations like auto-enrollment and target-date funds have boosted participation rates, enabling millions of Americans to build formidable retirement savings.
But let’s be clear: The responsibility for effective retirement planning lies squarely on individuals — and that is no easy task! To navigate the complexities of retirement, it’s essential to equip people with strategies that can lead to financial security and help everyone benefit from our retirement system.
The strength of defined contribution plans
The U.S. retirement system has its imperfections, but the advantages of defined contribution plans, like 401(k)s and IRAs, cannot be overstated. Many of these plans offer tax benefits, employer matching and compounding growth, creating a sustainable path for millions of Americans to build their financial future.
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Over the years, advancements like auto-enrollment and target-date funds have helped improve participation and outcomes. A 2023 survey by the Plan Sponsor Council of America (PSCA) found that automatic enrollment can boost participation rates by at least 15 percentage points, with the impact varying based on the size of the plan. Vanguard’s How America Saves report highlighted the success of auto-enrollment, showing that plans with automatic enrollment had a 93% participation rate, compared with 70% for plans with voluntary enrollment. Having more Americans contributing to their financial futures is the best way forward.
Portfolio strategies have also evolved, becoming more age-appropriate and balanced. Research from MIT Sloan shows that the average American now invests significantly more in the stock market than in past decades, a trend driven by the rising popularity of target-date funds.
Retirement savings have grown tremendously and represent 32% of all household financial holdings in the United States, reaching a total of $40 trillion in June 2024, according to the Investment Company Institute (ICI).
Earlier this year, the U.S. Bureau of Labor Statistics reported that 73% of civilian workers had access to retirement benefits, with 56% participating. The percentage of eligible workers who opted into these plans was 77%.
Employer contributions have been a significant driver. Matching programs offer a crucial boost to savings, providing even more value to defined contribution plans because of the compounding effect, especially when made early. For example, a $1,000 contribution at age 30 grows significantly more than the same contribution at age 50. Contributions also:
- Increase participation. Matching contributions encourage higher enrollment and participation in retirement plans.
- Improve diversification. Extra contributions allow employees to better balance and diversify their portfolios, managing risk for improved outcomes.
- Close savings gaps. Employer contributions help reduce retirement savings gaps, particularly for lower-income workers who might otherwise struggle to save.
Empowering individual responsibility
The most effective retirement strategies are built on personal responsibility. Being engaged in your retirement planning leads to better outcomes. Something as simple as being sure to roll over your old 401(k) account when you change jobs can be make-or-break. It seems like common sense but, unfortunately, it’s not.
A Harvard Business Review article from March 2023 states, "41.4% of employees cashed out 401(k) savings on the way out the door." Of those people, nearly 85% emptied their accounts. This is not a forward-thinking strategy, and we need to help people understand how to plan better.
As a retirement savings professional, I cannot understate the importance of empowering individual responsibility. I have five simple guidelines to help everyone enjoy a happy retirement:
1. Start saving early
The sooner you save, the more your money can grow through compounding returns. No matter what the amount is, save it. At my company, PensionBee, you can easily track your retirement account.
2. Maximize employer and government contributions
Take full advantage of employer 401(k) matches and tax breaks on traditional IRAs and 401(k)s. This way, your savings grow faster with less out of pocket.
3. Grow your savings through good investments
- Size matters. Access global assets. There are many solutions that offer customers exposure to large global ETFs.
- Diversify. Spread investments across multiple stocks and asset classes globally to minimize the risk of negative events in one sector or region.
- Keep it simple. If you can’t dedicate time to managing your portfolio, consider set-and-forget investments that grow without constant oversight, such as target-date funds.
- Consider investing with your values. If you care about climate or ethical investing, check what options your provider offers. There are climate-focused investment options that don’t compromise returns.
4. Watch out for hidden fees
Do you know what you are paying in fees on your retirement accounts right now? Very few of us do. It’s important to keep your fees low — ideally under 1%. All-inclusive fees are best so you know exactly what you’re paying without any surprises.
5. Take out only what you need
Withdrawing too much reduces long-term growth. Too many people withdraw their retirement accounts to move their cash into bank accounts. But banks offer lower, taxable returns compared to retirement investments. Choose a provider with flexible withdrawals to access funds when necessary while keeping the rest invested for better growth and tax advantages.
A call to confidence
As we look toward the future, our retirement plans must evolve to serve everyone — from Gen Z workers just starting their careers to retirees enjoying their golden years. Flexibility is crucial for younger generations, while stability will remain key for those nearing retirement.
Public perception is a critical measure of success. According to a PensionBee Retirement Confidence study, only 40% of Americans under 50 feel positive about their retirement outlook.
The U.S. retirement system has the strength and flexibility to meet the challenges ahead, and with the right approach, we can ensure it works for everyone. The future is bright — let’s keep pushing forward.
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Romi Savova is the founder and CEO of Pension Bee, a leading online retirement provider she launched in 2014 after experiencing firsthand the complexity of workplace retirement account transfers. Driven by her vision to simplify retirement saving for the mass market, Romi has transformed Pension Bee into a trusted brand with over $7 billion in assets under management and more than 260,000 customers.
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