“`html

Retirement Savings Without a 401(k): Your Options

The 401(k) is a well-known retirement fund, offering tax-deductible contributions and potential employer matches. However, not everyone has access to a 401(k). Whether your employer doesn’t offer one or you’re self-employed, there are still ways to save for retirement. O1ne Mortgage is here to guide you through your options. For any mortgage-related needs, call us at 213-732-3074.

1. Traditional Individual Retirement Account (IRA)

A traditional IRA is a retirement account you can open and fund yourself through various financial institutions. It offers tax-deductible contributions, tax-deferred growth, and taxable distributions in retirement. Be aware of early withdrawal penalties and required minimum distributions (RMDs) starting at age 73.

Contribution Limits: In 2023, you can contribute up to $6,500, with an additional $1,000 for those 50 and older.

2. Roth IRA

A Roth IRA is funded with after-tax dollars, allowing penalty-free withdrawals of contributions at any time, provided the account is at least five years old. However, early withdrawals of gains may be taxed. Contributions are not tax-deductible, and RMDs are not required unless it’s an inherited Roth IRA.

Contribution Limits: The 2023 limit is $6,500 ($7,500 if you’re 50 or older), including contributions to other IRAs.

3. Solo 401(k)

Designed for business owners without employees, a Solo 401(k) allows you to make tax-deductible contributions as both employee and employer. This can significantly boost your retirement savings. Like a traditional 401(k), withdrawals are taxed, and early withdrawals incur penalties. RMDs start at age 73.

Contribution Limits: In 2023, employees can contribute up to $22,500, with employers adding up to 25% of compensation. Total contributions cannot exceed $66,000, with an extra $7,500 for those 50 and older.

4. Brokerage Account

A brokerage account is an investment account for various financial goals. While it lacks the tax benefits of a 401(k) or IRA, it offers flexibility in investment choices. Earnings are taxed in the year they’re realized, and there are no RMDs or early withdrawal penalties.

Contribution Limits: There are no contribution limits for brokerage accounts.

5. Health Savings Account (HSA)

An HSA, though not a traditional retirement account, can help build your nest egg if you’re eligible. It allows pretax contributions for qualified medical expenses, with tax-free growth and withdrawals. After age 65, you can use the funds for any purpose, though non-medical withdrawals are taxed.

Contribution Limits: In 2023, individuals with an HDHP can contribute up to $3,850, and families up to $7,750.

How to Save More for Retirement Without a 401(k)

Automate your contributions: Set up recurring transfers from your checking account to stay on track with your savings goals.

Gradually increase your contributions: Aim to save 15% of your income in your 20s and 30s, increasing to 20% in your 40s and beyond.

Avoid dipping into your retirement funds: Early withdrawals can incur penalties and reduce your savings, impacting compound interest.

The Bottom Line

While a traditional 401(k) is a great retirement tool, it’s not the only option. Explore other investment accounts to build your nest egg. Start saving early and consistently, even if you’re getting a late start. Prioritize your credit along the way with free credit monitoring from Experian.

For any mortgage-related needs, contact O1ne Mortgage at 213-732-3074. We’re here to help you achieve your financial goals.

“`