No 401 (k) plan offered by the employer? How to still save for retirement

Worse: most workers without work arrangements do not have retirement savings, said US Secretary of Labor Alexander Acosta at a press conference this week.

Last month, the Labor Department unveiled a new proposal to address this problem.

The proposed rule would allow small businesses to come together to offer 401 (k) plans to their workers. Plans would be proposed by employer associations based on geographic location or industry. While small employers are now able to work together to provide pension plans in certain circumstances, the proposal aims to relax these requirements.

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As part of this initiative, workers would have more opportunities to save through these arrangements, known as association pension plans. Small businesses, in turn, would be better able to compete with large employers for talent and come up with plans at lower costs.

The Ministry of Labor's decision follows President Donald Trump's August order to strengthen retirement security in America, Acosta said. This order called on cabinet members to look for other ways to increase Americans' opportunities to save for retirement.

But if and when this proposal goes to the end, it is not clear. In the meantime, about 38 million private sector employees do not have access to a workplace retirement savings plan.

If you're part of it, you can do some things now so you do not get left behind.

Talk to your employer

If you do not have a retirement plan, start by talking to your company about it.

"Sometimes the employer does not know he needs it, so he does not look at the options available and does not define any for his employees," said Winnie Financial Advisor Sun, founder of Sun Group Wealth Partners.

Make sure to inform your employer that he is encouraged to propose such a plan.

This includes the tax credits available to employers who sponsor a pension plan, according to Aaron Pottichen, Executive Vice President at Alliant Retirement Consulting.

The owner, your boss, could use this plan to protect his own taxable income. And instead of paying cash bonuses, they can instead contribute to the savings program and create incentives for employees to stay, said Pottichen.

More: 15 ways to save your retirement savings and keep pace with inflation

Open your own retirement accounts

If you invest yourself, you can put money aside to reach your long-term goals.

First, you can contribute to an individual retirement account. In 2018, you can contribute up to $ 5,500 in a traditional IRA before tax and up to $ 6,500 if you are 50 or older. Alternatively, you can choose to finance a Roth IRA after tax.

A Roth IRA is preferable in many cases because your money will increase 100% tax-free, said Sun. In addition, it can also serve as an emergency fund for young investors because you can withdraw the capital you have paid into a Roth account without any penalty.

Ideally, you want to fully fund your IRA in the first month of the year, Sun said, in order to get 12 more months of returns.

If you are married, you may want to contribute to a spousal IRA, said Cathy Curtis, founder and CEO of Curtis Financial Planning.

Spousal ARIs allow you to put $ 5,500 to $ 6,500 more for your husband or wife, provided that they do not work. Other rules apply, depending on whether you invest in a traditional IRA or in a Roth IRA.

High earners who are not eligible to contribute to Roth IRA could consider an indirect Roth IRA, in which the assets of a traditional IRA are converted to Roth IRAs, said Curtis.

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Finance a health savings account

If you have a high deductible health plan with your employer, you also have access to a health savings account.

The pre-tax money you put into this account can count for your retirement savings, Curtis said.

In 2018, individuals can pay up to $ 3,450 and families up to $ 6,900 on these accounts.

These limits, combined with what you can save in your IRA, can represent substantial savings, Curtis said. And unlike flexible spending accounts, your health savings account balances can be carried forward from one year to the next.

"You do not have to spend it, you can invest it," Curtis said. "There are a lot of good things about HSAs."

Remember to go there alone

If your employer is not interested in setting up a 401 (k) plan, you can ask him to move from your status to an employee 1099 rather than an employee W-2 , said Sun.

You will be well paid as an independent contractor, which will allow you to start your own business.

Then you can establish a retirement plan – such as a SEP IRA, a 401 (k) person or even a pension plan, depending on your income – as a self-employed person.

"The good news is that it's not too complicated," Sun said. "Any decent tax professional should be able to give you advice.

"When you make between $ 50,000 and $ 60,000, it's worth the conversation."

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