8 Top Retirement Savings Options for Young Professionals

Feeling ambitious and future-focused? It’s time to discuss something that might seem far away but will arrive sooner than you think: retirement. Sorting through retirement plans can be like navigating a maze. Fear not; we’re your trusty guide. This article dissects eight potent retirement savings options for young professionals, setting you on the road to financial peace of mind.

No matter who you are, where you work, or what your financial goals are, everyone needs to start saving for retirement. Whether through an employer-sponsored plan or a private savings account, setting aside a portion of your income each month is the best way to ensure that you’re prepared for life after work. Retirement plans come in many shapes and sizes, so let’s take a look at the top options available for young professionals.

401(k) or Similar Employer-Sponsored Retirement Plans

First stop: 401(k)s. If you’re working for a company that offers this plan, congratulations. This is one of the best ways to launch your retirement savings journey. The brilliance of a 401(k) lies in its pre-tax contributions and employer matching. It’s like getting free money—your employer’s contribution—on top of your own savings. Choose from various investment options, diversify, and watch your money grow. Take note: accessing your 401(k) before 59½ may result in penalties, but these funds can often be rolled into another 401(k) or an IRA if you change employers.

According to recent data, the average 401(k) balance for American employees is $118,600, with an average annual employee contribution rate of 7.4% of their pay. Employers contribute an additional average of 4.5%, making the total average contribution rate around 13.9% per year. This combined saving rate aligns with expert recommendations of saving 12-15% of your salary for retirement, showcasing the substantial benefits of employer-sponsored retirement plans.

Individual Retirement Account (IRA)

Not to be overshadowed, the Individual Retirement Account (IRA) is another heavyweight in the arena of retirement savings options. The tax perks of a traditional IRA can be a windfall, significantly reducing your taxable income. You’re in the driver’s seat when it comes to investment options, whether it’s stocks, bonds, or mutual funds. Compounding interest, a powerful force in any investment strategy, operates tax-deferred in an IRA until you make withdrawals in retirement.

Roth IRA

Next up: the Roth IRA. It’s the Robin Hood of retirement savings options, taking after-tax money now and giving you tax-free withdrawals later. The Roth IRA comes with income limitations, but don’t let that deter you. Strategies like backdoor conversions can circumvent this. With a Roth, you’re in control of your investment choices, from mutual funds to stocks and bonds. Plus, all that tax-free growth will compound beautifully over the years, making for a sizable nest egg by the time retirement rolls around.

Health Savings Account

The Health Savings Account (HSA) combines healthcare and retirement planning. An HSA offers a triple tax advantage: pre-tax contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses. This account can be your secret weapon for tax-efficient saving and long-term growth potential. Many HSAs offer investment options similar to 401(k)s and IRAs, which means this account could become a lucrative asset for your retirement plan.

Brokerage Accounts

First off, let’s talk Brokerage Accounts. These bad boys are your gateway to the stock market, giving you the license to trade everything from shares to ETFs. The best part? Total control. Feel like dabbling in tech stocks today and renewable energy tomorrow? Do it. And don’t forget, the earlier you dive in, the more time you give your investments to grow. It’s like planting a money tree that just keeps on giving.

Real Estate Investments

Now, let’s jump into Real Estate. Think it’s just for the old-timers? Think again. This is where you can be both landlord and kingpin, watching property values soar while you chill and collect rent. Bonus: It’s a diversification play that could put a hedge against your stock market bets. Still worried about the complexities? Tax write-offs on property expenses got you covered.


Annuities might sound like they’re from a different era, but they’re like a subscription service for your future self. You pay now, and an insurance company pays you back in retirement—monthly, yearly, or in a lump sum. It’s a Netflix queue of guaranteed income. And let’s be real, who doesn’t like guarantees when you’re talking about your future cash flow?

Self-employed Retirement Plans

For the freelancers, consultants, and gig economy warriors among us, you’ve got your own set of awesome retirement options. SEP IRAs and Solo 401(k)s are not just alphabet soup; they’re your route to some serious tax-deferred savings. Want more control? Go for a Self-Directed IRA where you pick from a broad menu of investment choices, like your own personal finance buffet.


Listen, retirement might feel like it’s a lifetime away, but the truth is, time flies, especially when you’re hustling. You’ve got a sea of options, each with its unique set of perks. But don’t let choice paralysis get to you. Pick a lane and go full throttle.

A significant portion of millennials and Gen Z believe they will need about $2.1 million to retire comfortably, which is significantly higher than the national average retirement savings goal of $1.7 million. This reflects the increased awareness and ambition among young professionals regarding the need for substantial retirement savings to maintain their desired lifestyle in the future​.

What’s the secret sauce? Consistency and a solid game plan. We’re talking setting goals, diversifying investments, and continuously adapting to life’s curveballs. Whether you’re the type that’s all about employer-sponsored plans, keen on being a landlord, or love the thrill of the stock market, there’s a strategy tailored for you.

And let’s not forget—navigating this ocean of options is a whole lot simpler with some expert advice in your pocket. So, if you’re looking to make your retirement planning as effortless as scrolling through your feed, download the Jon D Rock app now. It’s packed with insider tips, calculators, and a treasure trove of financial wisdom that will take your retirement game to the next level.