7 Alternative Ways to Save for Retirement

401(k) plans are not the only way to save for retirement. If your employer is one of the many that doesn’t offer a 401(k) savings plan, there are still plenty of alternatives to save for retirement. Your non-401(k) options include both traditional and Roth individual retirement savings accounts (IRAs), as well as health savings accounts (HSAs), bank accounts, securities, annuities and real estate.

Each person’s financial situation is unique. A financial advisor can tailor retirement savings suggestions to your specific needs and aspirations.

Employer-sponsored 401(k) plans are the most widely used tools designed specifically for retirement savings. About 70 million workers actively participated in these plans as of the end of 2023, according to the Investment Company Institute.

The Census Bureau said that in 2020, 34.6% of working-age people had 401(k)-style accounts, followed by 18% with an IRA or Keogh account. This is despite the fact that anyone can open an IRA, while only people whose employers offer 401(k) plans can participate in that type of retirement savings account.

401(k) and IRA plans are tax-advantaged accounts, which can give retirement savers a leg up on the task of accumulating savings. However, there are many alternative ways to save for retirement, including some that are not tax-advantaged, as well as some that offer other tax benefits.

Any time you set aside money to help pay for your expenses after you stop working, you’re saving for retirement. It doesn’t matter when, how or how much you save. However, some methods of saving are particularly appropriate and widely used for retirement, including the following:

1. IRA. You can generally deduct contributions to these accounts from your current income, and earnings on investments with funds grow tax-free until you withdraw them in retirement. You can open an IRA at many banks and other financial institutions.
2. Roth IRA. Contributions to Roth-style IRAs aren’t deductible, but withdrawals are generally tax-free as long as you are age 59.5 or over and have had the account for at least five years. Roth IRAs are also offered by many banks, credit unions and brokerages.
3. Cash savings. Savings accounts, certificates of deposit and money market accounts offered by banks and credit unions don’t offer tax benefits, but they do provide top-shelf convenience and safety. They’re well-suited to building emergency savings as part of your retirement plan.
4. HSA. These accounts are designed to help pay for health-related expenses, but can also be potent tools for retirement saving. They provide a triple tax advantage, meaning contributions are deductible and both investment earnings and withdrawals are free of income taxes.
5. Annuity. These are contracts with insurance companies that guarantee future cash benefits in retirement in exchange for a series of premium payments or, more often, a single lump sum premium. Annuity premiums are not tax-deductible and the contracts often carry high fees, but the reliable payments can help insulate retirees from market swings.  
6. Securities. Stocks, bonds, mutual funds and exchange-traded funds (ETFs) purchased through a regular brokerage investment account don’t get any tax benefits. However, you’ll be able to invest in nearly any type of security on the market and there are no annual contribution limits.
7. Real estate. Investing in rental property can provide you with a steady stream of income in retirement while also providing the potential for long-term appreciation along with attractive tax advantages. You can invest in real estate by buying properties, by purchasing shares in Real Estate Investment Trusts (REITs) or real estate ETFs, joining partnerships or participating in crowdfunding.

These broad categories of alternative ways to save for retirement include many subtypes. For example, in additional to traditional IRAs, you may be able to save with SEP IRAs and SIMPLE IRAs.

A number of important rules also govern the way you can save with many of these alternatives. IRAs, Roth IRAs and HSAs have annual contribution limits, while bank CDs lock your money up for a time and generally can’t be withdrawn earlier without owing a penalty.

If you don’t have a 401(k) plan where you work, you can still save for retirement using a number of alternative methods. Some, such as IRAs, offer similar benefits to 401(k) plans. Others, like HSAs and annuities, have attractive features that 401(k) plans usually can’t match. Many alternative retirement savings tools are well-suited as additional ways to save for retirement even if you are already participating in a 401(k) at work.

• Financial decisions you make today will help determine the lifestyle you can afford in retirement. Ensure that you’re making the right moves by partnering with a knowledgeable financial advisor. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
• No matter how you choose to save for retirement, you’ll want to know whether you’re saving enough. Find out with the help of SmartAsset’s free, online Retirement Savings Calculator.

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