Around 56 million workers in the U.S. do not have access to a 401(k) via their jobs, says The Pew Charitable Trusts. Despite the lack of automatic payroll deductions or employer matches, wealth accumulation for the future is not out of reach-it merely requires a bit more purposeful planning.
Troy Davidson, a wealth advisor at Ballast Rock Private Wealth, warns that "complacency or procrastination can be a real impediment in saving for retirement." Even if a 401(k) isn't available to you, one of the most effective ways to prepare for retirement is to maintain discipline, order, and consistency.
They suggest several strategies that you can adopt to mimic the advantages of an employment plan- these suggestions can benefit the self-employed, small business employees, or employees without any retirement benefits.
If you're unable to contribute to a 401(k), an individual retirement account (IRA) often serves as the next best strategic step. Initially, Davidson recommends establishing an emergency fund-to cover approximately six months of vital expenses-while simultaneously addressing any high-interest or variable-rate debt. Then, once secure, transition your focus to retirement accounts that offer tax advantages.
Both traditional and Roth IRAs extend the growth period for your money and offer substantial tax benefits. Traditional IRAs can lessen your current taxable income, while a Roth IRA's growth is tax-free for future withdrawals. In 2025, the contribution cap is $7,000 ($8,000 if you're 50 or older), and investing early empowers your money to compound for more years. If there is still capacity after maximizing an IRA-and provided you're eligible-consider funding a Health Savings Account (HSA), then divert to taxable brokerage accounts.
It's worth noting that freelancers, gig workers, and small business owners can also take advantage of high contribution caps-a feature that makes 401(k)s advantageous. Solo 401(k)s and SEP IRAs allow for much larger savings than an IRA can accommodate. And there's the flexibility-you can contribute when income is high, and hold off in months when cash flow is tight-ideal for those with fluctuating earnings.
Once you've exhausted your tax-privileged options, a taxable brokerage account can continue to keep your savings on an upward path. As Davidson notes, they carry many benefits: no contribution limits, full flexibility for additions or withdrawals, and no restrictions or penalties.
While the employer match is often touted as "free money," without it you'll need to create a savings habit. Davidson advises behaving as though the match still exists, and recommends investing an extra percentage of each year's income. The extra savings will always be for your benefit, which undoubtedly makes it worthwhile.