{"id":235920,"date":"2025-10-19T08:35:35","date_gmt":"2025-10-19T08:35:35","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/235920\/"},"modified":"2025-10-19T08:35:35","modified_gmt":"2025-10-19T08:35:35","slug":"heres-how-to-retire-comfortably-without-a-401k","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/235920\/","title":{"rendered":"Here\u2019s How To Retire Comfortably Without a 401(k)"},"content":{"rendered":"\n

You\u2019re out with friends, and the conversation turns to retirement planning<\/a> \u2014 specifically, how everyone\u2019s 401(k) is doing. As your friends discuss upping their contributions to get an employer match, you sip your drink, hoping not to be noticed. You don\u2019t have a 401(k)<\/a>, and you\u2019re worried this means you\u2019re doomed financially.<\/p>\n<\/p>\n

For You: Pre-Tax vs. Roth: Why This One Retirement Decision Confuses So Many People<\/a><\/p>\n

Learn About: 3 Advanced Investing Moves Experts Use To Minimize Taxes and Help Boost Returns<\/a><\/p>\n

But you\u2019re far from alone. Analysis from Pew Charitable Trusts<\/a> shows that millions of Americans in the private sector don\u2019t receive retirement benefits from their jobs. People who work as contractors or freelancers are also responsible for funding their own retirement<\/a>. Surely, everyone can\u2019t be doomed.<\/p>\n

For Wade Pfau<\/a>, Ph.D., CFA, RICP\u00ae, founder of Retirement Researcher<\/a>, it is entirely possible to retire just as well as your friends with 401(k) plans. As part of the GOBankingRates\u2019 Top 100 Money Experts<\/a> series, he shared practical steps you can take to retire wisely without a 401(k).<\/p>\n

Financial planning for retirement requires a broader view of what you\u2019d like your life to look like \u2014 or what it might realistically become. Ask yourself: When do you want to retire? What would your ideal lifestyle be? Which hurdles, like health concerns, should you prepare for?<\/p>\n

These questions are important for everyone, whether or not they have a 401(k). As you create your plans and establish key accounts, Pfau urges you to operate with clarity. In a piece for Retirement Researcher<\/a>, he explained the importance of understanding what you\u2019re planning for \u2014 whether it\u2019s travel, time with family or simply slowing down.<\/p>\n

\u201cThese aspirations form the foundation of your retirement \u2018why,\u2019 offering clarity and context for everything else \u2014 from your spending targets to your risk tolerance,\u201d he said. \u201cDefining your goals and retirement style helps identify appropriate strategies for income generation<\/a>, longevity planning and risk management.\u201d<\/p>\n

Pfau also offers a simple savings benchmark: aim to set aside at least 15% of your income if possible \u2014 but start with whatever amount you can and increase over time. Automating those contributions can help you stay on track.<\/p>\n

Read Next: I Help People Retire Every Day \u2014 Here\u2019s the Most Common Retirement Mistake People Make<\/a><\/p>\n

Even without a 401(k), Pfau emphasizes that there are still strong retirement account options \u2014 including an IRA<\/a>, or individual retirement account.<\/p>\n

You\u2019ve probably heard of an IRA, but if you need a refresher: It\u2019s a personal savings account that offers tax advantages designed to help you save for retirement.<\/p>\n

Story Continues <\/p>\n

You can open an IRA at nearly any bank, brokerage, insurance firm or investment company. With a traditional IRA, your contributions may be tax-deductible, and growth is tax-deferred until funds are withdrawn. Roth IRAs are funded with after-tax money but allow tax-free withdrawals if you\u2019re older than 59 1\/2 and the account has been open for at least five years.<\/p>\n

Generally, Roth IRAs<\/a> are considered the smarter option for people who expect to be in a higher tax bracket during retirement, while traditional IRAs may be better suited to those who expect a lower bracket.<\/p>\n

\u201cIf you qualify, a Roth IRA is great for long-term, tax-free growth,\u201d Pfau said. \u201cIf you want a tax break now, a traditional IRA may make sense.\u201d<\/p>\n

If you\u2019re self-employed or run a small business, you have additional options such as a SEP IRA (Simplified Employee Pension)<\/a> or a Solo 401(k)<\/a>.<\/p>\n

The IRS describes a solo 401(k) this way: \u201cThe one-participant 401(k) plan isn\u2019t a new type of 401(k) plan. It\u2019s a traditional 401(k) plan covering a business owner with no employees, or that person and his or her spouse. These plans have the same rules and requirements as any other 401(k) plan.\u201d<\/p>\n

A SEP IRA is another solid choice. It offers higher contribution limits than a traditional or Roth IRA and is easier to set up than many employer-style plans. Connecting with a trusted financial advisor can help you determine which option best fits your income and tax situation.<\/p>\n

While IRAs and solo 401(k) plans provide a solid foundation for retirement savings without an employer-sponsored plan, a brokerage account<\/a> can also help build long-term wealth.<\/p>\n

In a nutshell, a brokerage account is an investment account that lets you buy and sell assets like stocks, mutual funds, bonds and ETFs<\/a>. Full-service brokerage accounts offer support from an advisor or broker, while self-managed online accounts may suit DIY investors better.<\/p>\n

One important caveat: A brokerage account isn\u2019t tax-advantaged. That means your investments are subject to income taxes, and you\u2019ll pay capital gains taxes when you sell assets at a profit.<\/p>\n

\u201cA brokerage account is flexible, with no contribution limits, but fewer tax advantages,\u201d Pfau said. \u201cOne important point about brokerage accounts is that lower preferential tax rates are applied to any qualified dividends and long-term capital gains.\u201d<\/p>\n

Some of the most common mistakes Pfau sees among people planning for retirement without a 401(k) stem from fear or self-doubt. The biggest? Not starting at all because they feel too far behind.<\/p>\n

\u201cWaiting makes it harder,\u201d he said.<\/p>\n

He\u2019s also seen people leave money sitting in savings accounts instead of investing it for long-term growth. And he warns against ignoring fees and taxes \u2014 two silent threats that can quietly erode returns over time.<\/p>\n

If you don\u2019t have a 401(k), you might worry about your financial stability in retirement. But you\u2019re not doomed. With a smart, proactive strategy that includes understanding your needs, saving consistently, choosing the right accounts and investments and seeking advice when needed, you can make your golden years shine.<\/p>\n

This article is part of GOBankingRates\u2019 Top 100 Money Experts series, where we spotlight expert answers to the biggest financial questions Americans are asking. Have a question of your own? Share it on our hub<\/a> \u2014 and you\u2019ll be entered for a chance to win $500.<\/p>\n

More From GoBankingRates<\/p>\n

This article originally appeared on GOBankingRates.com<\/a>: Here\u2019s How To Retire Comfortably Without a 401(k)<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"You\u2019re out with friends, and the conversation turns to retirement planning \u2014 specifically, how everyone\u2019s 401(k) is doing.…\n","protected":false},"author":2,"featured_media":235921,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[39],"tags":[28,147,530,1666,734,732,130740],"class_list":{"0":"post-235920","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-personal-finance","10":"tag-personalfinance","11":"tag-retirement","12":"tag-retirement-benefits","13":"tag-retirement-planning","14":"tag-wade-pfau"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/235920","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=235920"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/235920\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/235921"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=235920"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=235920"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=235920"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}