No 401(K) At Work? 4 Other Retirement Planning Options To Keep You On Target

Posted on: 11 December 2017

If you don't have access to a 401(k) account through your employer, saving for retirement may seem more difficult. And while it can be somewhat complicated, you can meet the challenge. Here are 4 alternative retirement planning options anyone can take advantage of. 

Traditional IRA. Individual Retirement Arrangements, or IRAs, are available to just about any person under the age of 70 1/2. You can typically open an account with your bank or a brokerage company, and you can choose from a variety of different investment options to invest without paying taxes on your contributions. Controlling your own IRA allows you to more easily determine your level of risk tolerance and set your own priorities. But be wary of withdrawing money early, as this can come with steep penalties. 

Roth IRA. Like a traditional IRA, a Roth IRA is controlled by you rather than your employer. You generally have the same investment choices and fee structure, but your income may limit your contributions. Because a Roth IRA is invested with money you have already paid taxes on, it can be easier to access without penalty in an emergency. And you may continue to contribute to the account even after age 70.

Health Savings Account. While it's not strictly a retirement account, a health savings account can be an important part of your plan. Health savings accounts are owned by you and can be invested either in safe or more risky options. As long as you use withdrawals for qualified medical expenses, you pay no taxes on the contributions or withdrawals. And, unlike the better-known Flexible Spending Accounts, HSAs do not need to be spent by the end of each year. This means you can save your money for future medical expenses, as well.

Brokerage Account. A taxable investment account can be used for any purpose—including retirement expenses—and it gives you some tax planning flexibility when it comes to taking money out during retirement. Look for a company with low costs and reasonable fees for their brokerage accounts. Your fees may also be reduced if you use the same company for taxable and nontaxable

A combination of these and other retirement planning options is a good way to keep your taxes low both now and later. It also gives you more options to adjust to changes over time. To learn more about how to create a portfolio that works for you personally, work with a qualified retirement planner in your area.