Saving For Retirement Without a 401(k)

At some point you will want to retire, whether your employer provides a retirement plan or not. So what to do if you don’t have the option to contribute to a 401(k)? There are a ton of ways to save and earn, it is just a matter of picking the right one for you. Below is a non-exhaustive list of different retirement savings options to check out. As always, check with your CPA or financial advisor as to which options are best for you.

1. Roth IRA

Pretty much anyone with earned income can open up a Roth IRA. The money you put in has already had taxes deducted, meaning that when you withdrawal, no additional taxes will be taken out. If you withdrawal within the set guidelines, you will also be free of penalties. You will get to see your money grow and know that the entire amount belongs to you, not the government. This is a great option that a large number of people can qualify for and utilize. There are income caps to pay attention to that would limit some people from being able to use this option. Also bear in mind that there are contribution caps as well. You can contribute up to $6,000 toward your Roth in 2019 if you are under 50, and an additional $1000 “catch up” if you are over 50.

2. Traditional IRA

You can also consider a Traditional IRA if your income is higher than allowed for a Roth. You are allowed to contribute to both a Traditional and Roth IRA if you do not exceed the Roth limits, but note that your total max contribution between the two is still $6,000. You may want to consider if this is the best option for you since you would be splitting your efforts. A traditional IRA also requires you to start making withdrawals at 70 1⁄2 and disallows you from continuing to contribute at that point. This is a big reason many favor the Roth approach when they have the option.


This option is for small business owners with or without employees. The contribution limits are way higher- up to 25% in some cases up to a max amount, but consider that you will need to contribute accordingly for your employees. Again, this would be a good time to speak with a financial advisor or professional if you have employees and would need to know amounts and specific rules relating. Freelancers and self-employed people without employees can also take advantage of this retirement savings vehicle without having to match for anyone else. There are other types of retirement accounts specifically for self-employed people that may be a better fit or used in addition to the SEP IRA. Because self-employed people don’t have a corporate sponsored plan, there tend to be higher limits allowed.

4. Real Estate rentals

If you are looking to supplement more traditional funds with a a different approach, you can also consider real estate rentals as an option. While there are many considerations when deciding if owning rental property is right for you, your situation, and your personality, it may be a good option to at least explore. Real estate investments can help diversify your portfolio, spreading some of the risk. These are more active investments, however, so “set it and forget” will definitely not apply here. On the upside, however, a paid off rental with a reliable tenant can bring you substantial income month after month while still retaining the tangible, principal investment- the house or unit.

Again, while we are not investment advisors and we do encourage you to meet with a professional, this is a small general sampling of what is available out there beyond the scope of the well known 401(k). While how you save is important, what is more important is that you are saving at all!

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