By: Mary Smith - Staff Writer
Published: May 18, 2021

No 401k, what are my options?

No 401k, what are my options? Working for a company that offers no retirement options is actually becoming more common these days. Don’t let the lack of a 401k stop you. There are several other options you can take to make sure you have a retirement savings plan.

If you are one of the people that say: no 401k, what are my options, then look for an IRA. Congress created the Individual Retirement Account, or IRA, to allow workers who don’t have access to an employer plan to contribute to a retirement plan. In 2011, you can contribute up to $5,000 to an IRA if you are younger than age 50.

Workers 50 and older can make annual catch-up contributions of $1,000 for a total of $6,000. These contribution limits rise occasionally to adjust for the cost of inflation. Now there are different plans out there, so make sure you know which one to get.

The original IRA account, or traditional IRA, allows you to defer taxes on your contribution in the tax year you make your deposit. Your savings enjoys tax-deferred status until you make withdrawals. The IRS taxes your IRA distribution at your ordinary tax rate if you withdraw after age 59.

When you choose a Roth IRA, you make your contributions with after-tax dollars. Like the traditional IRA, your account grows free of taxes. If you hold your account for at least five years, you can withdraw from the Roth IRA after age 59 and pay no taxes on the distribution.

Investing in IRAs allow you to choose whatever investment you desire. Choices include mutual funds, CDs, stocks or bonds. You may want to tuck away greater savings than an IRA allows.

An annuity is an investment option offered by insurance companies. Like a retirement plan, annuities offer tax deferral on your earnings. After you top out your IRA contributions, set up a non-qualified annuity to contribute after-tax dollars of any amount.


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