How to Save for Retirement Even When You Don't Have a 401(k) Plan

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 One of the biggest financial brick wall you'll face in life is keeping money aside for retirement There are various schools of thought on how much money you'll need in order to live comfortably after you stop working. No matter what that figure is, it's essential to be plan ahead about saving if you want to reach your retirement goals and objectives.

However, many people save for retirement in employer-sponsored plans like 403(b)s and 401(k)s, they're not always the advice. But here's good news: There are lots of other ways to build up that honey pot. Here's how you can achieve your retirement savings goals, even if you don't have a 401(k).

Invest in a Small Business

Another way to reach your retirement goals is to invest in a small business. A small business investment doesn't necessarily mean being a business owner. If you don't want to drive the ship, you can invest in an established company as a silent investor.

Whether you choose entrepreneurship or investing, small business profits are not static and the potential return on investment  (ROI) is higher than other alternatives. Of course, these investments carry with them a great deal of risk. There's no guarantee that the time or money you invest in a small business will generate a substantial return over time. You need to do your findings in order to be on the safer side.


Real Estate Investments

Another option to save for retirement is a real estate investment. If you have an IRA or brokerage account, you may already have access to the real estate sector through a mutual fund or an ETF.

“The best option for investors is to buy into a fund that itself invests in real estate investment trusts (REITs) around the world,” says Mark Habner of Index Fund Advisors in Irvine, California. “REITs are extremely cost-effective, transparent, and liquid. Gaining access to REITs through a mutual fund allows investors to gain global diversification in real estate in a cost-effective way.”

Furthermore, outside of REITs, you can buy real estate outright to generate a stream of income during your retirement years. If you invest in a multi-family home, for instance, you can live in one section and rent out the other. This effectively reduces your total living expenses while paying down the mortgage through a platform such as Airbnb.

Later, you can decide to continue to rent out the property and receive a steady income from rents. Alternatively, you can sell the (ideally appreciated) home and use the proceeds for living other investments.

Individual Retirement Accounts (IRAs)

IRAs are of best investment. Its has tax-advantaged accounts that hold investments you choose. The two main types of IRAs are the Roth IRAs and Traditional IRAs The biggest difference between the two is when you pay your taxes:

  • Traditional IRAs: You get to deduct your contributions the year you make them. Withdrawals are taxed as normal ordinary income when you start taking out money during retirement.
  • Roth IRAs: You don't get a tax break when you add money to the account Qualified Distributions are tax-free, as long as you make them after age 59½ and if the account is at least five years old since your first contribution. Keep in mind, you can make tax- and penalty-free withdrawals at any time, for any reason.



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