Funding Your Retirement: 6 Possibilities to Secure Your Golden Years

Most Americans spend more time planning vacations than preparing for retirement. While we research hotels and compare flights, many of us just hope things will work out for the 20 or 30 years after we stop working.

Retirement planning doesn't have to be overwhelming. While Social Security covers only 40% of your pre-retirement income, today's savers have access to diverse funding strategies that can bridge the gap to financial security. From traditional 401(k)s to emerging options like cryptocurrency, these six approaches can work together to build the retirement you want.

Traditional 401(k) Plans: The Workplace Workhorse

Your workplace 401(k) is still one of your strongest retirement saving tools at your disposal. Because of the IRS's 2025 contribution limit increase, you can now save $23,500, compared to $23,000 in 2024. While the additional $500 may seem modest, those dollars add up over time.

What makes 401(k)s tantalizing? Many employers offer matching contributions, which amounts to free money! If your company matches up to 3% of your salary and you are not contributing at least that amount, then you are leaving money on the table. Think of it as a guaranteed 100% return on your investment.

Under the newly created SECURE 2.0, workers ages 60-63 can now contribute an additional $11,250, which means their total possible contribution is $34,750. This added catch-up provision acknowledges that many people will see their peak earning years in their 60s. This means they will need more time to save.

Cryptocurrency Investments: Adding Digital Assets to Your Portfolio

Digital currencies have moved from the tech world into mainstream investment portfolios, and many financial advisors now recommend allocating a small percentage of retirement funds to cryptocurrency. Bitcoin, Ethereum, and other major cryptocurrencies have demonstrated impressive long-term growth, although they carry higher risk than traditional investments.

Smart crypto investing starts with proper storage and security. Resources like the 99Bitcoins Top Cardano Wallets provide valuable guidance on selecting secure storage options for the Cardano blockchain, helping investors protect their cryptocurrency holdings with reliable wallet solutions. If you’re interested in other blockchains, you can investigate online and find what suits you best.

The key with crypto in retirement planning is balance. Most experts suggest limiting cryptocurrency to 5-10% of your total portfolio. This gives you exposure to potential high returns while keeping the bulk of your retirement savings in more stable investments. Consider dollar-cost averaging into crypto positions over time rather than making large lump-sum purchases.

Individual Retirement Accounts (IRAs): Your Personal Savings Vehicle

Individual Retirement Accounts (IRAs) provide you with an opportunity to save for retirement, especially when your employer does not offer a retirement plan, or when you want to save beyond the limits of your 401(k). There are two primary types of IRAs you can use today: traditional and Roth.

Traditional IRAs give you tax deductions on your contributions today but require you to pay taxes when you withdraw the funds in retirement. Roth IRAs are the opposite. You pay taxes today, but do not pay taxes when you withdraw the funds in retirement. The contribution limit for both types of IRAs will be $7,000 for 2025. If you are 50 or older, you can add an additional catch-up contribution of $1,000.

When choosing between traditional and Roth, the easiest approach is to think about how your current tax bracket compares with your expected tax bracket in retirement. If you are earning more today than you expect to earn in retirement, then a traditional IRA may be more useful to you. If you are at the beginning of your career or expect to have higher taxes in retirement, then a Roth may be ideal for you.

Roth Conversions: The Game Changer of Tax Strategy

Roth conversions allow you to convert funds from a traditional retirement account or traditional IRA to a Roth account (or Roth IRA) and prepay taxes on the move to avoid them later. When you go to convert, it is particularly effective when your account values are lower due to a market downturn, or when you have a year of low income.

All these strategies boil down to timing. If you decide to convert when you are in a lower tax bracket, for example, maybe you took a year off work to stay at home with children, or you simply had a year of lower earnings, you can save a lot of money over the long run. You will pay tax on the amount you convert that year, but in the future, everything you earn as a result of the converted funds will be tax-free.

Target-Date Funds: Set-It-and-Forget-It Investing

Target-date funds have become extremely popular among savers, with asset totals surpassing $4 trillion, because they offer a diversified, hands-off approach to planning. These funds dynamically change your investment mix as you near retirement by transitioning away from growth stocks to more conservative bond investments.

The beauty lies in their simplicity. You pick a fund based on when you plan to retire, say, Target Date 2050 if you're retiring around 2050, and the fund does the rest. It rebalances regularly, adjusts risk levels, and requires zero maintenance from you.

Target-date funds aren't for everyone, but they are incredibly popular because they don’t require people to actively manage their retirement investments.

Health Savings Accounts (HSAs): The Triple Tax Advantage

HSAs are most likely one of the most underrated retirement planning tools available. If you have a high-deductible health plan (HDHP), you can put money into an HSA, and your contributions are deductible, grow tax-free, and can be withdrawn tax-free if the withdrawal is for a qualified medical expense.

Here is the retirement context: after age 65, you can take out HSA money for any purpose without penalty (tax regular income taxes for non-medical withdrawals). Before age 65, the money can only come out tax-free for medical expenses. Given that healthcare costs typically increase with age, having a dedicated pot of tax-free money for medical expenses in retirement is incredibly valuable. Even if you don't use all the money for healthcare, the account functions like a traditional IRA after age 65.

Building Wealth Through Property

Real estate can also be a source of retirement income, through rentals or a Real Estate Investment Trust (REIT). Rental properties can provide a stream of monthly income and appreciation, and REITs allow you to invest in real estate without a landlord's headache.

Direct ownership of property calls for the investor to participate in making decisions around the property, supervising improvements, and receiving the upside of market appreciation of the property. On the downside, if something breaks, you are the one to fix it, and if the tenant is not good, it is your problem to solve.

The REIT meets you halfway. REITs are companies that own and operate income-producing real estate, and are obligated to distribute most of their income to their shareholders in dividends. You have access to real estate without the responsibilities of being a property owner, plus you receive regular income.

Conclusion

Building a secure retirement isn't about finding one perfect solution; it's about combining multiple strategies that complement each other. Start with your employer's 401(k), add tax-advantaged accounts like IRAs and HSAs, then consider additional options based on your goals and risk tolerance.

The most important step is simply to start. Every dollar you invest today has years or decades to grow, making time your greatest ally in creating lasting financial security.