While 401(k)s offer some significant benefits, they aren't the only route to financial freedom in older age. Maybe your employer doesn't offer a 401(k), and you want to take matters into your own hands. Or maybe your employer does offer one, but it's less than impressive (no matching or high fees). If a 401(k) isn't the right fit for you, then you still have several options when it comes to saving for retirement.

Traditional and Roth IRAs

IRA stands for "individual retirement account" and is one of the most popular ways of saving for retirement, regardless of other savings plans. A traditional IRA allows wage earners to put money into an account and allows that money to grow tax-free. Much like a 401(k), you'll only pay taxes on the money when you withdraw it later in life. In addition to tax-deferred growth, there are other benefits to traditional IRAs: 

• Contributions can be deducted from your taxable income.

• The flexibility of investment choices - There is a broader range of assets available with traditional IRAs. For example, exchange-traded funds, which aren't offered by the majority of 401(k) providers.

• Generally speaking, lower fees than 401(k)s. 

The major drawback of traditional IRAs is that they carry a lower maximum contribution threshold for tax-benefits when compared to a 401(k). The maximum annual contribution is $6000 for those under 50, and $7000 for people 50 and over. 

Roth IRAs are another popular option, but they come with two key differences to traditional IRAs. Firstly, a Roth IRA allows you to grow your money tax-free, and you'll be able to withdraw your money at retirement also tax-free. However, to get this benefit, you contribute money on an after-tax basis. This means you can't take advantage of any tax savings today.

SEP IRAs

Simplified Employee Pension IRAs work similarly to traditional IRAs, meaning you see tax benefits now rather than later. SEP IRAs are a great option for self-employed people or freelancers who want to save for retirement. The key difference between traditional IRAs and SEP IRAs is that the maximum contribution is higher - up to $57,000 or 25% of income, whichever is less.

Solo 401(k)

A solo 401(k) is a great alternative to SEP IRAs for high earning self-employed people. While with a SEP IRA you are limited to 25% of your income, with a solo 401(k), you can contribute as much as $57,000 or $63,500 if you are over 50.

Health Savings Account

Despite the name, these accounts are used for more than just health expenses. After age 65, you can withdraw money not used for medical expenses and use it how you like. Like traditional IRAs, contributions to HSAs are tax-deductible and grow tax-free.

Index Funds

These are essentially investment funds that are based on an index of stock, for example, Dow Jones or S&P 500. They are constructed to match or track the components of a financial market index and provide broad market exposure but with low operating expenses. Index funds are common in retirement accounts and 401(k)s.

Rahul Iyer