How to Save for Retirement Without a 401(k)

If your employer doesn’t offer a 401(k) plan as part of your benefits package, you’re not alone. About 25% 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.

Market chaos, inflation, your future—work with a pro to navigate this stuff.

But if a 401(k) isn’t an option for you, don’t panic! You still have plenty of options to help you save for retirement, even without a 401(k). With plans like Roth IRAs, solo 401(k)s, SEP-IRAs and a few more, you can still reach your retirement goals.

Here’s how to save for retirement when you don’t have a 401(k)—starting with our favorite retirement investing tool: the Roth IRA.

Roth IRA

One of your best options for a retirement savings account when a 401(k) is off the table is a Roth IRA (Individual Retirement Account). Here’s the rundown on why we’re big fans of Roth IRAs:

What Is a Roth IRA?

The Roth IRA isn’t just an alternative to a 401(k). It’s one of the best retirement plans available!

Like a 401(k), a Roth IRA is a tax-advantaged way to invest for retirement. The big difference is that it's an individual account—so there's no employer match. You can contribute up to the annual limit each year and even set up automatic contributions to make saving simple.

Roth IRAs have a lot of investment options, but good growth stock mutual funds are your best bet for building long-term wealth.

So, why are we such big fans of Roth IRAs? The short answer: taxes. With a traditional IRA, your money grows tax-deferred, which means you won’t pay taxes on the money you invest (and how much it grows) until you withdraw those funds in retirement. That’s right—you’ll eventually have to pay taxes on your contributions and your growth.

But it’s different with a Roth IRA: You pay taxes up front when you contribute, which means your money grows tax-free (music to our ears) and you can withdraw it tax-free in retirement (even more beautiful music!).

In our opinion, the Roth IRA is the rock star of retirement accounts. And it’s available for most folks (depending on your income), making it a sweet option when it comes to retirement investing plans.

Now, there are a couple of downsides to Roth IRAs. We already mentioned there’s no employer match, but another downside is the Roth IRA’s lower contribution limit compared to a 401(k). In 2026, you can contribute $7,500 to a Roth IRA ($8,600 if you’re age 50 or older), compared to the 401(k)’s limit of $24,500 a year ($32,500 if you’re age 50 or older).²

Still, the Roth IRA is your best bet if you don’t have access to a 401(k) or if your employer doesn’t offer a 401(k) match.

But pump the brakes, y’all. Before we get into how to open your shiny new Roth IRA, let’s figure out if you’re ready to invest for retirement.

You’ll know you’re ready if you’ve completed Baby Steps 1–3. That means:

• You’re debt-free (except for your house)
• You have an emergency fund for 3–6 months of expenses

If that’s you, it’s time to start investing 15% of your gross income for retirement. Again, if you don’t have access to a 401(k), the Roth IRA is your next best option. And if you hit your contribution limit before reaching your 15% goal, you have other investment options. Don’t worry—we’ll go over those too!

How to Open a Roth IRA

You can open a Roth IRA through an investment company, bank or brokerage. But the best way to open an account is with an experienced investment professional who will act as teacher and guide (you should never invest in anything you don’t fully understand). Find a pro who can help you discover options you didn’t even know you had.

Once you open an account, you can choose the right mutual funds to invest in, diversifying evenly among the four categories we recommend:

• Growth
• Growth and income
• Aggressive growth
• International

Why Choose Roth Over a Traditional IRA?

Like we talked about earlier, since you pay taxes on the money you put in your Roth IRA when you invest it, you’ll be able to use your savings in retirement tax-free. What’s that look like? Well, if you contribute the maximum amount each year for 30 years, you could have over $1.7 million! We’ve got your attention now, right? Even better, you won’t have to pay a penny in income taxes when you withdraw that money in retirement.

 

 

With a Roth IRA, you’re paying the current income taxes within your bracket as you contribute. So when you finally settle down to enjoy that nest egg, you know exactly how much money is yours versus Uncle Sam’s. (Psst . . . it’s all yours! Yep. You get to keep all your money.)

What Are the Roth IRA Requirements?

Okay, Roth IRAs sound great. But does the IRS have rules for them? Do they ever. To be eligible to fully contribute to a Roth IRA in 2026, you must:

• Have an earned income
• Have a modified adjusted gross income (which is basically your total gross income minus whatever deductions you claim on your taxes) that’s less than $242,000 for married couples filing jointly or $153,000 for single people³

If you meet these qualifications, you’re eligible to contribute up to the Roth IRA maximum (as above, $7,500 for 2026, or $8,600 if you’re 50 or older).

Spousal IRA

Now listen up, married people—this is important. Even if one of you doesn’t have an earned income, you can still have two Roth IRAs between both of you thanks to the spousal IRA.

For most single-income families, fully funding two Roth IRAs (which adds up to $15,000 in 2026) will be enough to reach the goal of investing 15% of their income for retirement. Sweet deal!

When Should You Choose a Traditional IRA?

If your income is too high to contribute to a Roth IRA, you can go with a traditional IRA. The contribution limits are the same (up to $7,500 a year, and up to $8,600 if you’re 50 or older), and both you and your spouse can have an account.⁴

But that’s where the similarities between a traditional IRA and Roth IRA end. Unlike a Roth IRA, there are no annual income limits for a traditional. That’s the good news.

The not-so-good news is something called required minimum distributions (RMDs), which means you’re required to begin withdrawing from a traditional IRA once you turn 73. At that point, you’ll need to take a certain amount of money out of your account and begin paying taxes on those funds, whether you want to or not (remember, Uncle Sam eventually gets his share!).⁵

Still with us? Now, let’s look at some other non-401(k) options you can explore if you’re self-employed.

Saving for Retirement if You’re Self-Employed

Although the work-for-yourself life comes with lots of perks, built-in retirement planning typically isn’t one of them. But that’s no excuse to avoid planning for the future. In fact, it’s very important that you start saving and growing your retirement fund as soon as possible.

Roll Over Your Old 401(k) Into an IRA

Leaving a job to start your own business or step out as a freelancer? It’s possible to take your 401(k) with you (this is called a 401(k) rollover). You can use a direct 401(k) rollover to move a traditional 401(k) into a traditional IRA account or a Roth 401(k) into a Roth IRA account tax-free. There are limits, though. Definitely talk to a pro before you take this step.

Rollover Rules for Popular Plans

Roll Over From	To Traditional IRA	To Roth IRA	To Qualified Plan	To 403(b) Plan	To 457(b) Plan
Traditional IRA	Yes	Yes (taxable)	Yes	Yes	Yes
Roth IRA	No	Yes	No	No	No
Qualified Plan	Yes	Yes (taxable)	Yes	Yes	Yes
403(b) Plan	Yes	Yes (taxable)	Yes	Yes	Yes
457(b) Plan	Yes	Yes (taxable)	Yes	Yes	Yes
SIMPLE IRA	Yes	Yes (taxable)	(Yes	Yes	Yes6

The good news is, a rollover doesn’t count toward your contribution limit. This lets you open an IRA, create a nice foundation, and keep on investing in stride.

Let’s be clear: If you’re going to move funds from one retirement account to another, you should always do a direct rollover, which means the money goes straight from one retirement account to another.

You should never do an indirect rollover, where you’re personally receiving the funds from the retirement account and then have 60 days to deposit that money into another eligible retirement account. If you miss that deadline, you’ll have to pay taxes and penalties on all that money.⁷ No thanks!

Solo or One-Participant 401(k)

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.

You’ve got a couple of options when it comes to choosing the solo 401(k) that’s right for you.

• Traditional 401(k): Contributions are made pretax—this reduces your taxable income for the current tax year. But you’ll have to pay taxes on any money you take out of the account in retirement.
• Roth 401(k): Contributions are made with after-tax dollars—this doesn’t reduce your taxable income for the current tax year, but you’re able to enjoy tax-free growth and tax-free withdrawals in retirement. Now that’s a win-win! If you have a chance to go with a Roth option, take it. 

Now, with a solo 401(k), you—as the business owner—can make contributions both as an employee (up to $24,500 in 2026) and as an employer (up to 25% of your compensation). This allows you to maximize your contributions to your retirement account and also make deductions on your tax return. Just keep in mind that your total contributions to a solo 401(k) can’t exceed $72,000 for 2026.⁸

 

Setting up a solo 401(k) plan can be a bit tricky, so you should sit down with an investment pro who can walk you through the nitty-gritty steps.

What if I Run a Small Business With Employees?

First of all, thanks for being part of the backbone of the American economy! If you own a small business and need retirement account options for you and your employees, look no further than a SEP-IRA or a SIMPLE IRA. Let’s check them out one at a time.

Simplified Employee Pension IRA (SEP-IRA)

SEP-IRAs are mainly used by small-business owners who want to help their employees with retirement, but freelancers and self-employed folks can also use this option.

An advantage of the SEP-IRA is a much higher contribution limit than traditional and Roth IRAs, but unfortunately, there’s no Roth option. You can contribute to your own retirement this way, but for 2026 you can’t exceed either 25% of your income or $72,000 (whichever is less).⁹

This is a good plan to consider if you’re thinking about hiring employees as your business grows. Just keep in mind: The percentage you contribute for yourself has to be the same percentage you contribute for your employees. So if you put 15% of your salary into your account, you also have to contribute 15% of your employee’s salary into their plan.

SEP-IRAs are typically a little easier to manage than a solo 401(k) because they require less paperwork, but don’t be careless. For your own peace of mind, you need 100% confidence in your plan, especially if you have employees. This is where an investment professional can help you.

SIMPLE IRA

Since the SIMPLE IRA is pretty simple, so is our coverage on this topic!  It 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 contribution limit of $17,000 a year in 2026.¹⁰

We’ve covered a lot of retirement account options so far. Let’s take a look at all the 2026 numbers in one handy chart:

Retirement Option	Employment Situation	Yearly Max Contribution (Under 50 Years Old)
Roth IRA	Any earned income	$7,500
Traditional IRA	Any earned income	$7,500
Solo or one-participant 401(k)	Self-employed	$24,500 as employee and up to 25% of income as employer—see section on solo 401(k)s above
SEP-IRA	Self-employed/small-business owner	25% of earned income (up to $72,000)
SIMPLE IRA	Small-business owner	$17,00011

What Other Options Do I Have?

If you’re still not sure which plan is right for you, buckle up because there are three more options we’ll cover. The first two require you to work either for a nonprofit organization or the federal government, but the third option is for anyone.

403(b) Plan

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). Organizations that offer 403(b) plans include public schools and colleges, churches, and tax-exempt charities. Some employers also offer a Roth 403(b) option.

Thrift Savings Plan (TSP)

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 bonus of tax-free withdrawals when you retire. You can also choose how to split your TSP contribution among several investment options.

Taxable Investment Account

If you don’t qualify for those 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 top off your 15% investment goal.

Get Started Today!

Phew! That was a lot of information—but you made it! And honestly, getting to the end of anything involving IRS rules is a win. But if you’re still not sure where to start, don’t worry. That's where the SmartVestor program comes in.

With the SmartVestor program, you can connect with an investment pro who can help you sort through your options and choose what fits your goals. You can even set up automatic contributions to make saving for retirement as convenient as a 401(k).

 

This article provides general guidelines about investing topics. Your situation may be unique. To discuss a plan for your situation, connect with a SmartVestor Pro. Ramsey Solutions is a paid, non-client promoter of participating Pros.