The 4 Levels of Investors (Most People Are Stuck at #2)

If you’ve ever wondered whether you should be maxing out your IRA—or felt behind because you’re not—this video breaks down what the data actually says about retirement savings in the U.S. and why most people are asking the wrong question. According to recent IRS data, only about 54% of traditional IRA contributors max out their accounts. But here’s the reality: that statistic doesn’t tell the full story. In this video, we go beyond IRA contribution limits and explore how Americans actually save for retirement—and why IRAs are not the primary savings vehicle for most households. Instead, we break down the 4 types of investors (or tiers of savers) and explain how real people build wealth over time using different account types like 401(k)s, IRAs, and taxable brokerage accounts. You’ll learn: Why employer-sponsored retirement plans like 401(k)s and 403(b)s dominate retirement savings in the U.S. How access to a workplace retirement plan dramatically increases the likelihood of building wealth Why IRA contribution data can be misleading—and who is actually using IRAs The difference between Traditional IRAs, Roth IRAs, and backdoor Roth strategies How high-income earners stack accounts across 401(k)s, IRAs, and taxable brokerage accounts Why taxable brokerage accounts may be one of the most powerful and flexible tools for long-term investing How to think about retirement planning, tax diversification, and investment strategy in a more complete way We also walk through the behavioral patterns behind saving and investing, including how income level, employer access, and financial systems shape outcomes over time. You’ll see why some people remain stuck in the early stages of saving, while others build a fully integrated investment strategy that supports financial independence and even early retirement. This video is not about telling you which account is “best.” It’s about helping you understand how 401(k) investing, IRA contributions, Roth strategies, and brokerage accounts work together to build a complete financial system. Whether you’re just getting started, trying to optimize your retirement strategy, or deciding between maxing out your IRA vs. investing in a brokerage account, this breakdown will help you make smarter, more confident financial decisions. 00:00 Intro: Why Most People Are Asking the Wrong Question About IRAs 01:40 The 4 Tiers of Retirement Savers Explained 01:44 Tier 1: No Retirement System (Biggest Financial Risk) 02:06 Tier 2: The Default Saver (401k & Employer Retirement Plans) 02:37 Tier 3: The Intentional Saver (401k + IRA Strategy) 03:00 Tier 4: The System Builder (401k + IRA + Brokerage Accounts) 03:40 Tier 1 Deep Dive: Why Most People Never Start Investing 04:45 Tier 2 Deep Dive: How 401(k)s Build Wealth Automatically 07:24 Tier 3 Deep Dive: Why IRAs Are a Secondary Retirement Layer 12:22 Tier 4 Deep Dive: Brokerage Accounts, Tax Strategy & Financial Freedom 16:18 Bloopers Some of my favorite books: https://amzn.to/3KF3tlr Camera & equipment I use: https://amzn.to/3Z20lof Disclaimer: Please note that this video is made for entertainment purposes only and not to be taken as financial advice. Always make sure to do your own research. Join the family & subscribe to my channel here:    / erintalksmoney   Thanks for watching, I appreciate you! Advisory services are offered through Root Financial Partners, LLC, an SEC-registered investment adviser. This content is intended for informational and educational purposes only and should not be considered personalized investment, tax, or legal advice. Viewing this content does not create an advisory relationship with Root Financial. We do not provide tax preparation or legal services. Always consult an investment, tax or legal professional regarding your specific situation. The strategies, case studies, and examples discussed may not be suitable for everyone. They are hypothetical and for illustrative and educational purposes only. They do not reflect actual client results and are not guarantees of future performance. All investments involve risk, including the potential loss of principal. Comments reflect the views of individual users and do not necessarily represent the views of Root Financial. They are not verified, may not be accurate and should not be considered testimonials or endorsements.