No 401(k)? There are other ways to plan your retirement

According to a new study by AARP, nearly half of workers in the U.S. don’t have access to an employer sponsored retirement plan including a 401(k) plan.

If you’re one of them – or considering becoming one of them by joining the ranks of the self-employed or switching jobs – don’t fret. While an employer sponsored retirement plan is a common and easy way to build a nest egg, there are other ways to save for retirement.

• Traditional or Roth IRA – While annual savings limits aren’t as high as with 401(k) plans, Individual Retirement Account options offer an opportunity to save for retirement using similar investment options, and may offer portability with the possibility of being rolled into a future employer sponsored retirement plan. 
• Brokerage Account – While not tax deferred, a brokerage account is a way to save for retirement, offering similar investments to an employer sponsored plan and control over the investment options to which you are investing.
• Traditional Savings Account – Backed by the FDIC and insulated from the ups-and-downs of the market, an interest-bearing savings account is a good option for those who are risk averse.
• Health Savings Account (HSA) – The savings you’ve built up in your HSA isn’t just for short-term medical expenses.  Your HSA can be used for medical expenses and other expenses after age 65.
• Simplified Employee Pension (SEP) – If you’re self-employed and/or have a successful side hustle, you can establish a tax-deferred SEP, which is also available to any employees you may have working for you.

These are just a few of the many options workers without an employer sponsored retirement plan have to save for retirement. It’s important to consider your retirement goals and align your savings and income plans to meet them. Consider consulting with a qualified financial advisor or tax professional to discuss your goals and options.

One parting word of advice: If you participate in an employer sponsored retirement plan and separate from service, resist the temptation to take a cash distribution of your retirement savings. Instead, if you are able, leave your account in your former employer’s retirement plan. If that option is not available, roll your account into an IRA to continue to keep your retirement savings tax-deferred.