How to Plan for Retirement Without an Employer-Sponsored Savings Account

Asset Protection Group | Dec 2, 2019

Whether you love your career or are counting down the days until you gain your freedom, almost everyone will retire someday. Since it’s inevitable, and sometimes even unpredictable, we should all plan for the day our careers come to a conclusion.

But if you’re self employed, or otherwise don’t have access to an employer-sponsored retirement plan, you face an additional challenge. Without a clear road to retirement already paved for you, you will need to investigate your alternate options.

Solo 401(k). You might be pleased to know that you can utilize a “one participant” or solo 401(k) if you’re self employed. The plan offers basically the same savings and tax advantages as the employer-sponsored varieties, except of course you can’t count on any matching contributions.

Individual Retirement Account. Regardless of your employment status, you can open and fund an IRA. Those who choose a Traditional IRA can enjoy the benefit of making pre-tax contributions, effectively lowering their taxable income each year. Alternately, those who opt for a Roth IRA can save after-tax dollars now, and enjoy non-taxable withdrawals in retirement.

Either way, you can save $6,000 per year in an IRA, or $7,000 per year once you reach age 50.

Health savings account. An HSA actually offers a creative way to save for retirement, in addition to helping you manage healthcare expenses now. Those who are enrolled in a high deductible healthcare plan can open an HSA, save pre-tax dollars, and use that money for out-of-pocket healthcare expenses like deductibles and co-pays. But because the money rolls over from year to year, all the way into retirement, any unused funds in the account could be tapped to cover Medicare premiums, deductibles, co-pays, and more once you reach your golden years.

Currently, those with an HSA can stash $3,500 in the account if participating in an individual healthcare plan, or $7,000 if participating in a family healthcare plan.

Give us a call. If any of these options interest you, or even if you’re still stumped regarding retirement planning, give us a call. We can help you identify all of the options available to you, so that you can choose a path that best suits your needs for the future.

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