Retirement Planning Without a 401(k)

A 401(k) is the most common retirement plan for American workers, but it's not for everyone. More than 52 million American workers have 401(k) retirement plans , according to the Investment Company Institute. However, that still leaves a lot of people who need to find alternatives for saving money for their post-work lives.

The good news is, there are plenty of other options available. There are ways to tuck money away and save for retirement without investing in a 401(k). Creating an alternative plan works well for a lot of people and their families, and it can be the right answer for you as well.

Consider the following retirement options if you don't want to go the traditional route:

IRAs (Traditional and Roth)
An individual retirement account, or IRA, is a plan designed to help you put money away when working so that you have savings when it is time to retire. The plan is similar to a 401(k), except employers do not match the investments into an IRA. There are a wide variety of accounts, but the most commonly used are traditional and Roth IRAs.

A traditional IRA is an account where you can put up to $5,000 a year (or $6,500 if you are 50 or older) with fewer taxes than a regular savings account. Instead of being taxed when you deposit money into an IRA, you don't have to pay the extra income until you withdraw. That allows you to accumulate interest throughout the life of the account.

The difference in a Roth IRA is that it is designed for younger workers who plan on being in a higher tax bracket when they retire , CNN Money explained. You will pay up-front charges, but will not pay taxes after you withdraw during retirement. There are less immediate savings with a Roth IRA, but if you expect to acquire a lot of income during your working life, it may be the better long-term option.

IRAs are specifically designed for retirement, so there are penalties for trying to access the money put away before it is time to do so. There are extra taxes for withdrawing from an IRA before you turn 59 ½, and you are forced to withdraw by the time you turn 70 ½.

Brokerage account
If retirement savings are too complex or time-consuming of a process for you to handle, you can work with a brokerage firm. The experts there can help you determine what types of stocks, commodities and funds to invest your money in that will lead to growth down the road. A brokerage account will allow you to gain wealth for retirement by investing in the products you think will earn money.

Tax-efficient investments
Certain investments are not taxed as heavily as others, and those should be considered when planning for retirement. A key is mapping out a withdrawal plan. Like an IRA, there are specific investments that are taxed heavily if they are touched before a certain time span.

Sometimes it helps to talk over retirement plan with an expert. The financial professionals at Vectra Bank can help you create a strategy that fits you, even if your company doesn't offer a 401(k).