What To Do if Your Employer Doesn’t Offer a 401(k)

What To Do if Your Employer Doesn’t Offer a 401(k)
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Having access to a 401(k) can be a great boon to your retirement. A 401(k) allows you to save pre-tax income, and in many cases, your employer will match your contributions to a certain level. It’s an amazing way to save for the future. However, not everyone has access to a 401(k).

Fortunately, there are other opportunities with advantages for retirement savings.

There are several reasons why you may not have access to an employer-sponsored 401(k):


  1. The company is too small. Many smaller companies don’t have the funds or expertise to support a 401(k) program.
  2. You work for a start-up. There can be many advantages to working for a new company. However, the quality of the benefits isn’t always one of them.
  3. You’re self-employed. When it comes to retirement and insurance, you’re on your own if you work for yourself.
  4. You only work part-time. Many benefits are only available to full-time workers.


While a 401(k) is an effective way to plan for retirement, there are other options for those without access to a 401(k).


A 401(k) isn’t necessary for a comfortable retirement. Consider these tax-advantaged alternatives:


  1. An annuity can provide either fixed or variable payments beginning at a later date. Annuities are an insurance product. The longer you live, the better deal you receive.
  • In most cases, your initial investment is gone once the payout phase of the annuity has started.
  • To determine the size of annuity you need, calculate how much your monthly expenses will be during retirement and subtract any guaranteed income, such as social security or pension payments. You can cover the remaining expenses with an annuity.
  1. It’s permissible to contribute $5,500 per year into an IRA. You can also contribute up to $5,500 to an IRA for your spouse, even if your spouse doesn’t work. Those numbers increase to $6,500 if you’re at least 50 years of age.
  2. Solo 401(k). If either you or your spouse is self-employed, you can open a solo 401(k) and contribute up to $17,500 plus 20% of your net income from self-employment. The maximum annual contribution is $52,000 or your annual income, whichever is lower. That limit increases to $57,500 if you’re over 50 years of age.
  3. Health Savings Account. You can open a health savings account if your current health insurance coverage has a deductible of $1,250 for an individual or $2,500 for a family plan. You can contribute up to $3,300 for yourself or $6,500 for a family. These contribution limits increase by $1,000 if you’re over 55.
  • These contributions are pre-tax and can be used for medical bills and Medicare premiums that you’ll eventually have to pay. The money isn’t required to be spent in the year it was contributed.


  1. SEP IRA. SEP stands for simplified employee pension. This is available to business owners to provide retirement benefits to the owner and employees. If you work for a small company, your employer could set up a SEP IRA plan. The contribution limits are 25% of income or $53,000, whichever is lower. This is typically part of a profit-sharing plan.
  • If you’re self-employed, the limit is roughly 18.6% of net profit. The limit is actually 18.587045%. Thank you, Congress. It isn’t necessary to have employees to start a SEP IRA program.
  • A SEP IRA plan is quite complicated.


There’s no reason to feel you’re at a great disadvantage if you’re unable to invest in a 401(k) plan. There are many other options, whether you’re self-employed or work for an employer that doesn’t offer any retirement vehicles. Focus on your other opportunities and plan for a secure future.

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