How Can I Save For Retirement If I Don’t Have a 401(k)?

How Can I Save For Retirement If I Don’t Have a 401(k)?

If your employer offers you a 401(k), then that’s a great way to save for your retirement, especially if you employer matches contributions. But what if your employer doesn’t offer a 401(k)? How do you save up for your retirement then? Or are you doomed to work until the end of your life?

Visit our Sponsor:  Parking Lot Striping St. Louis

You’ll be relieved to hear that the answer to that last question is a resounding “no.” If you don’t have access to a 401(k), don’t fret. You’re one of many American workers who don’t have access to a 401(k) plan through their employers.

So, if that’s the case, what are you supposed to do now? How do you save the widely suggested 15% of your income and get the most out of your savings? Luckily, there are a few options.


You’ve probably seen this acronym before if you’ve been looking into retirement savings plans. IRA stands for “individual retirement account.” These are accounts that anyone with an earned income can contribute money to in order to save for their retirement. This is true even if you have a spouse who works, while you yourself do not. IRAs can hold a variety of financial products, including stocks, mutual funds, and bonds.

There are a few different types of IRAs, but we’ll start with the traditional IRA. The contributions to this type of IRA are usually tax-deductible, though when you withdraw money from this account during your retirement, this money will be taxed at its normal income rate.

For a traditional IRA, there is an annual individual limit of $6,000. If you’re over 50, however, and using catch up contributions, this limit is raised to $7,000.

Roth IRAs

A Roth IRA is similar to a traditional IRA, with a few changes. The contributions to this type of IRA are not tax deductible, and since you’re paying taxes while you’re contributing, you won’t have to pay any taxes when you withdraw during your retirement.

Roth IRAs are amazing options when it comes to your retirement savings plan. But in order to quality for one, you have to have an annual income of less than $196,000 if you’re a married couple, and less than $124,000 if you’re single. If your income is more than that, you’ll have to look into a traditional IRA, rather than a Roth IRA.


Here’s another acronym to learn: SEP IRA. SEP stands for “simplified employee pension,” and if you’re a freelancer, self-employed, or have a S-corporation or C-corporation, then you’ll quality for an SEP IRA.

The amount you’re able to contribute to an SEP IRA depends on your income. You’ll be able to contribute up to 25% of your compensation, or $57,000 in 2020, whichever number is lower.

If you run a business, this is a retirement savings plan you can set up for your employees. You’ll have to make separate accounts for each employee, and you as the employer will be making the contributions to the accounts.

These accounts are especially great for freelancers, as they are easy to set up and inexpensive to maintain. So if you’re self-employed or get your income via freelancing, an SEP IRA might be the right type of retirement savings plan for you.

Self-Employed 401(k)

Maybe you’re self-employed and don’t have an employer offering you a 401(k). But that doesn’t mean you can’t offer yourself one. Self-employed 401(k)s, otherwise known as solo 401(k)s, can be opened if you are, as the name implies, self-employed, or own a business with no employees.

If you open a solo 401(k), there are two ways you are able to contribute. You’ll be able to contribute funds as both an employer, and an employee. If you’re contributing as an employer, you can contribute up to 25% of your earnings.

When you contribute as an employee, you can choose to contribute up to 100% or your earnings, with a maximum amount of $19,500. Contributing as an employee offers you the option of contributing either a tax-deductible or Roth contribution, depending on which you prefer.

And don’t worry, if you’re over 50 and making catch-up contributions, the maximum you can contribute as an employee increases by $6,500.

While retirement is an exciting part of every working person’s life, and the idea of freedom from your 9 to 5 desk job sounds like a dream, the process of planning for retirement can be stressful and confusing. While many employers off 401(k)s to their employees, not all of them do. And if you’re one of the many workers without an employer-offered 401(k), you might be feeling frustrated.

But just remember, there are plenty of other options for you. Check out retirement savings plans like traditional IRAs, Roth IRAs, SEP IRAs, and self-employed or solo 401(k)s. Research which one might be best for you, and start saving early, so you can really enjoy your retirement.

Thanks for stopping by.  We hope you found the article informative and actionable.   Contact us with any questions or to submit a suggestion or tip.   If we end up using one on our site, we will give you full credit.  Does your business need St. Louis Parking Lot Striping? Visit our sponsor so we can continue to bring you valuable content.