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SAVE FOR RETIREMENT WITHOUT A 401(k) While many people have access to a 401(k) plan, not everyone has this option, especially in today’s gig economy where income might come from multiple sources. Even without an employer-sponsored 401(k), there are several ways to save for retirement. With a bit of initiative, you can still take advantage of tax breaks and grow your retirement savings over time, whether you manage your accounts yourself or work with a financial professional.
FUND AN IRA An Individual Retirement Account (IRA) allows you to contribute pre-tax dollars, reducing your taxable income now and growing your savings tax-deferred until retirement. OPEN A ROTH IRA With a Roth IRA, contributions are made with after-tax dollars, but your withdrawals in retirement are tax-free, making it a great option if you expect to be in a higher tax bracket later in life. SET UP DIRECT DEPOSIT Automate your savings by setting up direct deposits into your retirement account, ensuring consistent contributions without the temptation to spend the money elsewhere. SAVE YOUR TAX REFUND Consider directing your tax refund into a retirement account. It’s an easy way to boost your savings without impacting your regular income. CLAIM THE SAVER'S TAX CREDIT If you meet certain income requirements, you could qualify for the Saver’s Credit, a tax break for contributing to retirement accounts like IRAs, which effectively reduces your tax bill. USE A TAXABLE INCOME INVESTMENT ACCOUNT While not tax-advantaged, a taxable investment account allows you to invest in a broad range of assets, giving you flexibility and potential growth outside of retirement accounts. GET A HEALTH SAVINGS ACCOUNT (HSA) If you have a high-deductible health plan, an HSA offers triple tax benefits: tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses. CONTRIBUTE TO A SAVINGS ACCOUNT OR CD Traditional savings accounts and Certificates of Deposit (CDs) offer a safe place to store money, typically with less risk. However, they also provide lower returns compared to other investment options.
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