How to Save for Retirement Without a 401(K)

Table of Contents

Introduction:

How to Save for Retirement Without a 401(K). ans is this:A 401(K)is the most popular type of employer-sponsored retirement plan in the United States.

Understanding Retirement Savings Beyond a 401(K)

A 401(K)is the most popular type of employer-sponsored retirement plan in the United States.1

In 2025, participants can contribute $23,500 plus an additional catch-up contribution of $7,500 for workers ages 50 and older. Beginning in 2025, catch-up contributions are $11,250 for workers ages 60 to 63.23 Workers make pre-tax contributions from their paycheck; many employers will also match 401(k) contributions up to a certain percentage.

Without the high contribution limits of a 401(k) and the possibility of an employer match, it can be difficult to save for retirement. Workers without enough savings may have to continue working, depend on family, or live solely on Social Security benefits. Average Social Security benefits were $1,976 per month in January 2025, with many retirees receiving significantly less.4

However, with careful planning, you can build retirement savings without an employer-sponsored 401(k).

Why You Might Not Have Access to a 401(K) in 2025

There are many reasons why you might not have a 401(K):

You work for a small employer that doesn’t offer retirement benefits.
You’re self-employed or run your own business.
You work multiple part-time or gig jobs that don’t provide benefits.
You are between jobs and not currently contributing to an employer plan.

According to the U.S. Bureau of Labor Statistics, nearly 40% of workers in 2025 do not have access to an employer-sponsored 401(K). That means planning alternatives isn’t just a backup plan — it’s essential.

Traditional IRA

A traditional IRA is funded with pre-tax dollars. Contributions are deducted from your taxable income when you file your yearly tax return. The account grows tax-free, and withdrawals during retirement are taxed as ordinary income.7

If you have a traditional IRA, you must start taking distributions no later than April 1 following the year in which you turn 72.7

Internal Revenue Service. “Traditional and Roth IRAs.”

Roth IRA

Contributions made to a Roth IRA are taxed the year that they are earned.

“Work with a professional to determine if a Roth IRA…would be appropriate for you, CPFA, retirement plan specialist and financial advisor at Everthrive Financial. “Roth savings features paying your taxes in the year that you make the contribution, and then the withdrawals of both your contributions and any growth the account experiences are tax-free.”

If you expect to be in a higher tax bracket when you retire, a Roth IRA may be a smart investment strategy. A Roth IRA does not have required minimum distributions if you are the original owner; there are different requirements for an inherited IRA.

Spousal IRA

In general, you must have earned income to contribute to an IRA. However, if you are a non-working spouse, you can still save for retirement with a spousal IRA. If you and your spouse file your tax return jointly, the two of you can contribute an additional $7,000 ($8,000 if you are age 50 or older) to a spousal IRA in your name. This amount remains the same even if your spouse is also contributing the full amount to an IRA for themselves.

Traditional IRA vs Roth IRA: Which Works Best?

When you don’t have a 401(K), an Individual Retirement Account (IRA) is the next best thing. There are two main types:

✅ Traditional IRA:

Contributions may be tax-deductible.
Taxes are paid upon withdrawal during retirement.

✅ Roth IRA:

Contributions are made with after-tax dollars.
Withdrawals in retirement are tax-free.

In 2025, contribution limits for IRAs have increased to $7,500 per year for those under 50, and $10,000 for those 50 and older.

If you expect your tax rate to be higher in retirement, a Roth IRA is often better. If you expect your taxes to be lower, a Traditional IRA might save you money in the long run.

Exploring Solo 401(K) Plans for the Self-Employed

If you work for yourself, you’re not completely shut out of 401(K) options. The Solo 401(K), also called an individual 401(K), is a powerful tool for entrepreneurs, freelancers, and gig workers.

In 2025, you can contribute up to $69,000 annually if you’re self-employed, combining employee and employer contributions. This is far higher than a traditional 401(K).

Solo 401(K) plans also allow for Roth options, so you can choose whether to pay taxes now or later. Many online brokerages make it easy to set one up quickly, so you don’t have to rely on a traditional employer.

Simplified Employee Pension (SEP) IRAs Explained

A SEP IRA is another excellent retirement plan for self-employed individuals or small business owners. It works similarly to a traditional IRA but with much higher contribution limits.

Contributions are tax-deductible.
Employers can contribute up to 25% of compensation, or $66,000 in 2025, whichever is lower.
SEP IRAs are easy to administer, with minimal paperwork and costs.

If you run a small business or freelance, a SEP IRA may be the simplest way to build significant retirement savings.

Health Savings Accounts (HSAs): A Secret Retirement Weapon

You might be surprised to hear that an HSA can double as a retirement savings vehicle. If you have a high-deductible health plan (HDHP), you can open an HSA and contribute up to $4,150 individually or $8,300 for a family in 2025.

Why is this powerful? Because:

✅ HSA contributions are tax-deductible
✅ Earnings grow tax-free
✅ Qualified withdrawals for medical expenses are tax-free

After age 65, you can also withdraw HSA funds for any reason (not just medical) without penalties — although you’ll pay ordinary income tax on non-medical withdrawals, just like a traditional IRA.

Brokerage Accounts for Retirement Investing

If you’ve maxed out your IRA or HSA, don’t overlook a taxable brokerage account. While it doesn’t have the same tax advantages, a brokerage account gives you complete flexibility to invest:

Stocks
Bonds
ETFs
Mutual funds

There are no contribution limits and no withdrawal penalties, so you can invest as aggressively (or conservatively) as you wish.

Maximizing Social Security Benefits in Retirement

Social Security will still be around in 2025, and maximizing your benefits is key if you don’t have a 401(K). Here’s how:

Delay benefits if possible — benefits increase 8% each year past your full retirement age up to age 70.
Work at least 35 years to maximize your average earnings.

Watch your earnings history and correct any errors on your Social Security statements.

Real Estate Investments for Retirement Income

Real estate has long been a retirement staple. Whether you invest in:

Rental properties
Real estate investment trusts (REITs)
Short-term rentals like Airbnb

…property investing can generate cash flow while your equity grows over time. Just be sure to research local laws, tenant protections, and property management strategies before you dive in.

Tax-Deferred Annuities

Annuities are guaranteed-benefit investment plans offered by insurance companies. “For people who are more cautious and want less risk, annuities can offer some peace of mind,” says CFP, CDFA, and president of financial planning firm Pearl Planning.

When you set up your annuity, you choose the interest rate variable, or tied to a specific index) and how long it will pay out (a set number of years or indefinitely until you pass away). The money you put into it is taxed when you withdraw it in retirement.

“[Annuities] provide a reliable stream of income, which can be comforting in retirement, but the costs can be steep,” explains Joy. She advises looking at the fees and penalties, including ongoing expenses, surrender charges, and any contract riders, before funding an annuity.

The Bottom Line

It’s possible to save for retirement even if you don’t have an employer-sponsored 401(k). Tools like IRAs and HSAs come with tax advantages to make saving easier. the sooner you open these accounts, the more time they will have to grow.

“Get started now!” recommends Kertis. “Whether you are 21 with your first job or 60 and playing catch-up, there is never a bad time to start saving.”