No 401(k)? How to Save for Retirement

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If you are one of the freelancers or independent contractors with no workplace retirement plan, you’ll probably be worried about your retirement savings at least once.

Don’t worry! You can still build retirement savings without a 401(k).

In this post, you’ll learn about options and strategies for retirement that fit your life stage, personality, and goals.

Disclaimer: I’m not a financial expert. All content provided is for informational purposes only. Please read my full disclaimer here for more info.

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First, understand “investments”

Freelancers or independent contractors have some retirement plan options such as the IRA, SEP-IRA, SIMPLE IRA, and self-employed 401(k). These are all “investments,” not traditional saving accounts.

If you invest $100 in your IRA account, sometimes the $100 became $90, and sometimes the $100 became $120. Original money “$100” is called the principal and the principal is not guaranteed if you invest in these retirement plans.

Stocks, bonds, and cash come with different levels of risk and potential reward. (1)

How much risk can you handle? There is no one right way to approach investing. The key is to understand your own investing needs and learn how to balance your comfort level of risk.

Don’t put your hard-working money into retirement plans just because everyone is doing it. Set a goal to make the right choice and have more confidence about your financial future.

Retirement plans for small-business owners


You’ve probably heard of IRAs before. It is an individual retirement account. Once you opened the IRA account, you need to choose from individual securities, such as stocks, bonds, certificates of deposit (CDs), exchange-traded funds (ETFs), or a “single-fund” option. (2)

If you don’t have enough time or knowledge of investment, Fidelity’s financial advisor recommends digital investment management or single-fund investment. If you are interested in choosing your own investments, you can choose individual securities such as:

  • Mutual Funds
  • ETFs
  • Stocks
  • Bonds and US Treasuries
  • Annuities
  • FDIC-insured CDs


If you are self-employed or have income from freelancing, you can open a Simplified Employee Pension plan known as a SEP IRA. With this plan, your earnings are tax-deferred and contributions are tax-deductible. You can invest in a wide range of mutual funds, stocks, bonds, ETFs, and FDIC-insured CDs.

Self-employed 401(k)

Self-employed 401(k), also known as a solo 401(k), is for the self-employed. This plan gives the opportunity to save a significant amount of money each year. However, after the plan assets hit $250,000, you have to file Form 5500 with the IRS. (1)

Brokerage Account

A brokerage account is an investment account that allows you to buy and sell a variety of investments, such as stocks, bonds, mutual funds, and ETFs. Once you open a Brokerage account, you can start depositing funds and placing orders. The transactions will be carried out by the brokerage on your behalf.

In some countries, there is no system like IRA and 401(k). These people save money into a traditional savings account, create a Brokerage account to manage their own investment, and pay government retirement plans like social security retirement.

Dividend Stocks

If you have dividend-yielding stocks, you’ll receive a payment at regular intervals from the company. Usually, companies pay cash dividends on a quarterly basis out of their profits, but if they don’t make enough money then sometimes there is no dividend payment. A lot of people own dividend-yielding stocks as passive forms of making money. The tricky part is choosing the right stocks. I highly recommend Bogleheads Investment Philosophy to build your portfolio.

Rental Income

Investing in rental properties is a way to earn passive income. Some people consider this passive income as retirement savings. Making living with rental income is more difficult than people expect. The initial cost of buying a rental property is huge. Damages of the property by a tenant, property tax, and economic up and down will have a big impact on your finance/rental business. You need to be very strategic. But once you can build a successful rental income, then you’ll get a stable income with minimal work.

High-Yield Savings Account

A high-yield savings account is a type of savings account that typically pays higher interest than a traditional savings account. The interest rate will depend on the economy. Sometimes it’s high, sometimes it’s low. Some people say that “Too much money sitting in a savings account that earns little or no interest is not a smart financial strategy.” I agree with the opinion, but still, you need cash for the emergency fund in uncertain times. While the size of your emergency fund will vary depending on your lifestyle, monthly costs, income, and dependents. Wells Fargo suggested that your emergency fund should be at least three to six months’ living cost.

Wrapping Up

401(k) is not the only option for your retirement savings.

According to Ubiquity Retirements and Savings (3), about 51 percent of employers offer 401(k) matching, but the employer match is not guaranteed. In fact, many companies reduced or suspended the match during the pandemic. Diversifying your retirement savings is a great idea!


  1. Fidelity (2021). How to save for retirement |
  2. Fidelity (2021). Choosing investments for your IRA |
  3. Telerski, D. (2021, May 12). How Much Do Companies Typically Match on 401(k) in 2021? Ubiquity.