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How to Save for Retirement Without a 401(k)

If you’re frustrated by all the retirement planning advice (including our own) that puts the 401(k) center stage, you’re not alone. Nearly one-third of all workers don’t have access to an employer-sponsored retirement savings plan.1 And even though some employees have a 401(k), not all employers offer to match what their workers put into it.

But even if you find yourself without a 401(k) option or a plan without an employer match, don’t panic! You still have plenty of options available to help you invest 15% of your gross income into retirement savings, which is what we recommend. You can still reach your retirement goals.

Here’s how to save for retirement when you don’t have a 401(k)—we're about to break it all down.

Saving for Retirement Without a 401(k)

With no access to a 401(k), where do you turn to kick-start your retirement investing? Let’s talk about our favorite retirement investing tool: the Roth IRA.

Open a Roth IRA

Though you may not be able to save for retirement with a 401(k) or 401(k) match, you can take full advantage of a Roth IRA. Currently, you can contribute $6,000 a year to your Roth IRA—or $7,000 if you’re 50 or older.2 You can choose from thousands of mutual funds, making it easy to spread out your investments evenly among the four categories: growth, growth and income, aggressive growth, and international.


How much will you need for retirement? Find out with this free tool!

Best of all, since you pay taxes on the money when you contribute, you’ll be able to use your savings in retirement tax-free. That means if you contribute the maximum amount each year, you could potentially have a nest egg worth almost $1.5 million after 30 years! We’ve got your attention now, right? And you won’t have to pay a penny in income taxes to use it for your retirement.

What are the Roth IRA requirements?

To be eligible to fully contribute to a Roth IRA, you must:

  • Have an earned income.

  • Have what’s called a modified adjusted gross income (which is basically your total gross income minus whatever deductions you claim on your taxes). But it has to be less than $198,000 for married couples filing jointly or $125,000 for single people.3

Now listen up, married people, because this is important. Even if you or your spouse doesn’t have an earned income, you can still have two Roth IRAs between both of you with something called a spousal IRA, if your spouse has an earned income. For most folks, fully funding two Roth IRAs (which adds up to $12,000) will be enough to reach the goal of investing 15% of their income for retirement.

What about a traditional IRA?

If your income is too high to contribute to a Roth IRA, you can go with a traditional IRA. Like a Roth IRA, you can contribute up to $6,000 a year—$7,000 if you’re 50 or older—and you and your spouse can both have an account.4

That’s where the similarities end. Unlike a Roth IRA, there are no annual income limits. But you’re required to begin withdrawing once you turn 72, and even though contributions to a traditional IRA are tax-deductible, you’ll have to pay taxes on the money you take from it in retirement.5

Still with us? Now, let’s look at some other options you can explore if you’re self-employed.

Saving for Retirement if You’re Self-Employed

Okay, if you’re self-employed and don't have any employees, a one-participant 401(k)—also known as a solo 401(k)—may be right up your alley. Contributions are tax-deductible, and you can contribute up to $20,500 in 2022 (or $27,000 if you’re age 50 or older). Then, on top of that, you can put in up to 25% of your income—as long as what you contribute is less than $61,000 per year.6

Another option is the SEP-IRA. SEP-IRAs are primarily used by small-business owners who want to help their employees with retirement, but freelancers and the self-employed can also use this option. You can contribute to your own retirement this way, but again, you can’t exceed either 25% of your income or $58,000 (whichever one’s less).7

What if I run a small business with employees?

Once you have employees, the rules of the road change a bit. A great choice is a SIMPLE IRA, which requires you to offer up to a 3% match for your employees every year—and contributions are tax-deductible. SIMPLE IRAs come with an individual limit of $13,500 a year.8

Retirement Option


Yearly Max (under 50 years old)

Roth IRA

Any Earned Income


Traditional IRA

Any Earned Income


One-Participant 401(k)


$20,500 (and anything up to 25% of income)


Small Business




25% of earned income (up to $61,000)


What Other Options Do I Have?

If you work for a nonprofit or other tax-exempt organization, a 403(b) plan is another great pretax investment option that works a lot like a 401(k).

Federal employees can save for retirement through the Thrift Savings Plan (TSP). TSPs usually come with matching contributions and allow you to make after-tax contributions with the added plus of tax-free withdrawals when you retire. You can also choose how to split your TSP contribution among several investment options.

Use a taxable investment account.

Now, if you don’t have any of the above options or if you’re able to save more once you max out your 401(k) and IRA options, contributing to a taxable investment account is a great way to hit your 15% investment goal.

Use direct deposit.

One of the best parts of a 401(k) plan is that your money is taken from your paycheck automatically, saving you from accidentally spending money you should be saving. You don’t even have to think about investing for retirement—it just happens!

You can recreate this by setting up a direct deposit from your paycheck to your chosen investment option. Just because your money is being deposited automatically, though, doesn’t give you permission to go on autopilot with your overall retirement plan. Be sure you’re communicating regularly with your investment professional to stay dialed in to your retirement future.

Remember, it’s up to you!

Get Started Today!

Don’t know where to start? With SmartVestor—our nationwide investing network—you can find an investment pro who can help you decide which one of the investment options we just talked about is right for you. You can even set up automatic contributions to make retirement saving as convenient as a 401(k).

Find your SmartVestor Pro today!

Ramsey Solutions

About the author

Ramsey Solutions

Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners. Learn More.

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