Most advice for retirement saving starts with contributing to a 401(k) plan or any type of retirement account obtained through an employer. But what if you don’t have a retirement plan through work?
There are still retirement accounts available to you, each one with special tax benefits, too. Here’s where to start.
Individual retirement account
An individual retirement account (IRA) is open to anyone with earned income, which is income earned through a job or business. Other income sources, such as investment returns and government benefits, aren’t considered earned income.
The main advantages of saving for retirement in an IRA are the tax benefits and tax-deferred growth. There are two main types of IRAs:
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Traditional IRA. This type of IRA offers a tax break for contributions, which could reduce your taxable income for the year.
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Roth IRA. While there is no upfront incentive for contributing, withdrawals in retirement are tax-free.
A quick breakdown of traditional vs. Roth IRAs
Annual contribution limit
$7,000 in 2025 ($8,000 if aged 50 and older). For 2026, the limit is $7,500 ($8,600 if aged 50 and older). The contribution limit for IRAs is a combined limit.
Ability to contribute is phased out at higher incomes.
Ability to deduct contributions can be phased out depending on income and access to an employer retirement plan.
No immediate tax benefit for contributing; distributions in retirement are tax-free.
If deductible, contributions reduce taxable income in the year they are made. Distributions in retirement are taxed as ordinary income.
There are also some special IRAs for more specific situations. These still come in a traditional or Roth type. They are:
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Spousal IRA. If you’re a nonworking spouse, you can open a spousal IRA in your own name to save for retirement. There are some guidelines to follow, such as ensuring your spouse earns enough to cover both contributions.
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Custodial IRA. This is an IRA opened for minors with earned income. It is managed by a custodian (typically a parent or guardian) until the child comes of age in their state.
Self-employed retirement plans
If you run your own business, have a side hustle or do freelance work, you have access to another set of retirement accounts. Each one has its own features, with pros and cons depending on your business income and how many employees you have.
As a bonus, these plans allow you to contribute as both an employer and employee, increasing how much you can set aside and invest for retirement.
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Solo 401(k). If you’re a business owner or you’re self-employed with no employees (other than your spouse), you can open this type of account.
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SEP IRA. If you’re self-employed with a few employees and have varying income throughout the year, you could explore a SEP IRA.
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SIMPLE IRA. These are intended for businesses with up to 100 employees.
Additional investment accounts
Outside of accounts specifically geared toward retirement, there are other accounts you can include in your financial portfolio.
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Taxable brokerage account. While there are no tax advantages for using a brokerage account, there are no contribution or withdrawal limits.
How to save for retirement without a 401(k): A roadmap
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Focus on your IRA. Whether you choose traditional or Roth, you can concentrate on contributing up to the maximum annual amount to your IRA.
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Explore self-employed retirement accounts. If you qualify for one of these accounts, look into which one best suits your needs and how much you can contribute as an employer and employee.
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Consider additional accounts. While you can only have an HSA as part of a high-deductible health plan, anyone can open a taxable brokerage account to further invest in the stock market.
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Automate contributions to stay on track. Plan out how much you can contribute to each of your accounts, and then automate contributions for consistency and to help stay on track with your retirement goals.
