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3 Ways to Save for Retirement Without an Employee-Sponsored 401k

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Retirement advice always starts out like this: “Put 15% of your gross pay in your 401(k) — and be sure to get that company match!” 

Okay, sure. I mean, not everyone has an employer-sponsored 401(k), but thanks for the tip?

Here’s the thing about that advice: Not everyone works for an employer that offers a 401(k). And contractors, freelancers and small-business owners certainly don’t! That’s why it’s important to find alternate methods of saving for retirement when you don’t have access to a 401(k) or that sought-after company match. 

You can still put away money for your retirement if you don’t have a 401(k). There are actually a bunch of ways to do it, depending on your situation, your income, and your goals. 

Here are the top 3 ways to save for retirement outside of an employer-sponsored 401(k).

1. Get an IRA and max it out

The best advice for saving for retirement without a 401(k) is to sign up for an IRA and max out your contributions. These accounts are fairly simple to set up, give you lots of choice when it comes to investments, and have their own particular tax advantages.

Traditional IRA 

You can open a traditional IRA (Individual Retirement Account) at most brokers, even online ones. Contributions are tax-deductible, although when you retire, you’ll have to pay taxes on the distributions. Contribution limits for a traditional IRA are $6,000 if you’re under age 50 and $7,000 for age 50 and older.

Roth IRA

A Roth IRA works a little differently: You get no tax deduction on your contributions when you make them, but when you collect the distributions later they are tax-free. As with the traditional IRA, the limits are $6,000 for under 50 and $7,000 for 50 and older.

Spousal IRA

If you or your partner is a stay-at-home parent, they can still save for retirement, too, with a Spousal IRA. 

2. Try a SEP-IRA or a Solo 401(k)

Just because you don’t have an employer-sponsored 401(k) doesn’t mean you can’t have a 401(k) at all! Solo 401(k)s are perfect for a company of one: the self-employed. Also known as a one-participant 401(k), these accounts are for business owners who have no employees. The IRS will let you use the plan to cover your spouse, though.

Solo 401(k)s have a contribution limit that makes IRAs look like small potatoes — $56,000 in 2019. If you’re older than 50, the IRS permits additional catch-up contributions of $6,000 a year. Plus, contributions can reduce your taxable income. There is such a thing as a Roth 401(k), which doesn’t reduce your tax liability now but allows you to take distributions tax-free down the road. However, know that the IRS will level penalties for distributions before age 59 ½.


Similar to a Solo 401(k) is a SEP-IRA, but with a couple key differences. A SEP-IRA is also great for small-business owners with few or no employees, A SEP-IRA also has contribution limits of $56,000 total. And a SEP-IRA’s contributions are tax-deductible. However, a SEP-IRA differs from a Solo 401(k) because, as a small-business owner, you may have employees and, if they’re eligible, you must contribute to their plans as well. That means, if you contribute 10% to your plan, you must contribute 10% of an employee’s gross pay to their plan as well.

3. Use a Regular Taxable Investment Account

Finally, a regular old taxable investment account is another option for saving for retirement. It’s not tax-advantaged like retirement-specific accounts, but you can certainly sock away a healthy nest egg until your golden years. 

If you don’t have access to an employer-sponsored 401(k) and want to invest more than the $6,000 cap of an Roth IRA, then a simple taxable investment account could help you get your retirement savings to 15% of your income. Plus, a regular investment account doesn’t come with rules about required distributions or tax penalties if you withdraw before age 59 ½.

Taxable investment accounts are simple to start and can be opened online at a number of online investment sites. You can choose your investments yourself, work with an advisor or even let a robo-advisor do the heavy lifting.

Depending on your allocations of stocks, bonds, mutual funds and other investments, you can successfully balance your portfolio, minimize risk and maximize any potential gains. 

Don’t let the lack of an employer-sponsored 401(k) hold you back from saving for your future. Depending on your situation, your income and your goals, you can definitely put away a healthy sum and invest in your golden years without one.


About the Author

Mary Beth Eastman serves as the content manager for Simple. Thrifty. Living, where she is dedicated to helping readers use money and credit wisely. Mary Beth believes that access to the right financial information paired with a growth mindset are essential tools for getting out of debt and building wealth. Mary Beth has a degree in Journalism from Bowling Green State University and has focused her 20-year journalism career on putting readers front and center, carefully considering their concerns and presenting information that will help them in their everyday lives. She has won numerous statewide journalism awards. Her writing on personal finance as been featured on numerous websites in addition to Simple. Thrifty. Living, including Huffington Post and Lexington Law blog. Mary Beth resides in Pittsburgh, Pa., with her family and two rescue dogs.


The information does not represent a recommendation to buy or sell securities. Investing involves risk. Your investments are subject to loss of principal and are not guaranteed. Blooom does not provide tax advice. Consult a tax expert for tax-specific questions.

Published on October 14, 2019