6 Tips for Saving for Retirement If Your Job Doesn’t Offer a 401k

By Chelsea Babin

What do you do if you want to retire some day but the company you work for doesn’t offer a 401k? Panic? Put off saving? No! You use these 6 tips to get your retirement savings on track without the help of a 401k.

1. Max Out an IRA or Roth IRA: The first step you can take to save for your retirement when your company doesn’t offer a 401k is to open up an IRA or a Roth IRA and max it out, which comes out to $5,500 a year for most individuals. Depending on your current salary and where you’re at in your career, this could either represent a significant chunk of change or a small drop in the bucket, but it’s worth doing as a first step.

2. Emergency Fund to Prevent Digging Into Retirement Savings: You never want all of your extra money tied up in accounts like 401ks and IRAs because you’ll incur significant penalties if you choose to withdraw early. Make sure you also save up an emergency fund—about 3-6 months’ expenses is the common rule of thumb—so that, if you lost your job or had a hefty and unexpected bill you could use that money to pay it off rather than dipping into your retirement savings.

3. Taxable Brokerage Accounts: If you have an emergency fund and you’ve maxed out either an IRA or a Roth IRA, the next logical step is to open a taxable brokerage account. While these accounts don’t have the same tax deferred status as traditional 401ks, they will allow you to invest your retirement savings and earn compounding interest over time.

4. Automatic Deposits: Making a conscious decision to put X amount of your money away for retirement every paycheck can make the whole process of saving for retirement a lot more challenging. That’s part of the reason why companies offer 401ks with automatic withdrawal from your paycheck. You can mimic this system by setting up automatic deposits into one or more of your retirement savings accounts and take the effort out of saving for retirement.

5. Ramp Up Savings By a Percentage of Every Raise: When you contribute to a company’s 401k, you’re contributing a percentage of your salary. When you get a raise, that percentage is suddenly more money so your contributions go up every year (unless you’ve already hit the max). You can do this without a company 401k too! All you need to do is ramp up your savings by a percentage that suits you every time you get a raise. That way, you’re putting more away for retirement and will hardly notice that amount missing from your spending money.

6. The Sooner, the Better: At the end of the day, any form of retirement savings is better started sooner rather than later. From compounding interests to more frequent deposits, you miss out on a lot of potential retirement money if you put off saving for it simply because your company doesn’t offer a 401k. Don’t let this excuse hold you back from your potential retirement or delay it even further!

While it’s nice to work for a company that offers a 401k (especially if they offer a match), you can still save for retirement without it. Use these 6 tips to save for retirement without the help of a 401k!