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With more than 70 million gig workers in the US, many full-time earners do not have access to an employer-sponsored 401(k) retirement plan. A 401(k), especially if your employer provides matching contributions, is a good way to save for retirement at any stage of life.

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According to March 2021 statistics from the Department of Labor, 67% of private industry workers had access to retirement plans that would include a 401(k) in 2020. That number could rise during the pandemic of layoffs and the “Great Resignation,” when employers have increased benefits packages along with other strategies to retain workers.

If you don’t have access to a 401(k), there are still many other ways to save for retirement.

Traditional IRA

If you’re an independent contractor or your employer doesn’t offer a 401(k), an IRA (Individual Retirement Account) is often the next best alternative. A traditional IRA can help reduce your tax liability if you choose to invest with pre-tax dollars.

You won’t pay taxes until you withdraw the money at age 72 (or sooner if you want). There are no income limits for opening a traditional IRA, which means that no matter how much or how little you earn, you can open an IRA and start investing right away.

You should know that for traditional and Roth IRAs, your maximum annual contribution is limited to $6,000 if you’re under 50 and $7,000 for those 50+.

Roth IRA

A Roth IRA is funded with after-tax dollars, which means you’ll pay taxes on your gross income (minus allowable deductions) before your Roth IRA contributions. However, when you withdraw the money in retirement, you won’t pay taxes on it.

You can take deductions tax- and penalty-free after age 59 ½, making a Roth IRA a great way to manage cash flow and minimize tax liability in retirement.

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A Roth IRA is also great for estate planning because your heirs can also withdraw funds tax-free.

Your account must be open for five years before you can withdraw money. Your maximum payments vary depending on your income. A financial advisor can help you determine your maximum investment for your best retirement savings actions.


If you are self-employed or a gig worker, you can open a retirement account with your earnings. Options include a Solo 401(K) or SEP IRA. With a SEP IRA (Self-Employed Retirement Account), you can contribute up to $66,000 in 2023, or 25% of your net self-employment income for the year.

Contributions are tax deductible up to $305,000, but payments will be taxed in retirement.

Individual 401(k)

The Solo 401(k) is designed for self-employed or 1099 contractors. It offers the same tax advantages as a regular 401(k) because it can be funded with pre-tax dollars.

The Solo 401(k) allows you to invest up to $61,000 a year, or up to $67,500 if you’re 50+.

Taxable brokerage account

For many, investing in stocks is a viable part of their retirement plan. With a brokerage account, you can invest in stocks, ETFs, mutual funds and more. Keep in mind that if you hold stocks and other investments in this type of account for more than a year before selling, you may be subject to long-term capital gains tax. However, you can offset these taxes through a strategy called tax loss harvesting.

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It’s important to note that investing in stocks and ETFs can be higher risk than investing in retirement accounts that are well-diversified and poised for slow growth. You can earn a lot in the stock market if you are prepared to weather the ups and downs of the market, diversify your portfolio and manage your risks.

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This article originally appeared on Don’t have a 401(k)? Instead, use these tools to save for retirement

The views and opinions expressed herein are those of the author and may not reflect the views of Nasdaq, Inc.


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