Strategies to Save for Retirement with No Company Retirement Plan

Company Retirement PlansFinancial PlanningRetirement Central
Written By gbfadmin

The question, “How much do I need to retire?” has become a concern across generations rather than something that only those approaching retirement focus on.  But what if you, or in the case of married couples, your spouse, are not covered by an employer-sponsored retirement plan?  In this article we are going to cover retirement savings strategies for individuals that may not be covered by an employer-sponsored retirement plan.

Married Filing Jointly - One Spouse Covered by Employer Sponsored Plan and is Not Maxing Out

A common strategy we use for clients when a covered spouse is not maxing out their deferrals is to increase the deferrals in the retirement plan and supplement income with the non-covered spouse’s salary.  The limits for 401(k) deferrals in 2025 is $23,500 for individuals under 50,  $31,000 for individuals 50-59 and 64+ and $34,750 for individuals 60-63.  For example, if I am covered and only contribute $8,000 per year to my account and my spouse is not covered but has additional money to save for retirement, I could increase my deferrals up to the plan limits using the amount of additional money we have to save.  This strategy is helpful as it allows for easier tracking of retirement accounts and the money is automatically deducted from payroll.  Also, if you are contributing pre-tax dollars, this will decrease your tax liability.

Note:  Payroll deferrals must be withheld from payroll by 12/31.  If you owe money when you file your taxes in April, you would not be able to go back and increase your deferrals in your company plan for that tax year.

Married Filing Jointly - One Spouse Covered by Employer Sponsored Plan and is Maxing Out

If the covered spouse is maxing out at the high limits already, you may be able to save additional pre-tax dollars depending on your Adjusted Gross Income (AGI).

Below is the Traditional IRA Deductibility Table for 2025.  This table shows how much individuals or married couples can earn and still deduct IRA contributions from their taxable income.

As shown in the chart, if you are married filing jointly and one spouse is covered, the couple can fully deduct IRA contributions to an account in the covered spouses name if AGI is less than $126,000 and can fully deduct IRA contributions to an account in the non-covered spouses name if AGI is less than $236,000.  The Traditional IRA limits for 2025 are $7,000 if under 50 and $8,000 if 50+.  These lower limits and income thresholds make contributing to company sponsor plans more attractive in most cases.

Single or Married Filing Jointly and Neither Spouse is Covered

If you (and your spouse if married filing joint) are not covered by an employer sponsored plan, you do not have an income threshold for contributing pre-tax dollars to a Traditional IRA.  The only limitations you have relate to the amount you can contribute.  These contribution limits for both Traditional and Roth IRA’s are $7,000 if under 50 and $8,000 if 50+.  If married filing joint, each spouse can contribute up to these limits.

Unlike employer sponsored plans, your contributions to IRA’s can be made after 12/31 of that tax year as long as the contributions are in before you file your tax return.

About Rob……...

Hi, I’m Rob Mangold. I’m the Chief Operating Officer at Greenbush Financial Group and a contributor to the Money Smart Board blog. We created the blog to provide strategies that will help our readers personally , professionally, and financially. Our blog is meant to be a resource. If there are questions that you need answered, pleas feel free to join in on the discussion or contact me directly.

read more
Related Posts
How Do Executive Non-Qualified Deferred Compensation Plans Work?
How Do Executive Non-Qualified Deferred Compensation Plans Work?

If you're a high-income executive, you’ve likely hit the contribution ceiling on your 401(k) or other qualified plans. So what’s next?

Enter the non-qualified deferred compensation (NQDC) plan—a tax deferral strategy designed for executives who want to save more for retirement beyond traditional limits.

Mandatory 401(k) Roth Catch-up Details Confirmed by IRS January 2025
Mandatory 401(k) Roth Catch-up Details Confirmed by IRS January 2025

IRS Issues Guidance on Mandatory 401(k) Roth Catch-up Starting in 2026

Starting January 1, 2026, high-income earners will face a significant shift in retirement savings rules due to the new Mandatory Roth Catch-Up Contribution requirement. If you earn more than $145,000 annually (indexed for inflation), your catch-up contributions to 401(k), 403(b), or 457 plans will now go directly to Roth, rather than pre-tax.

The IRS just released guidance in January 2025 regarding how the new mandatory Roth catch-up provisions will work for high-income earners.  This article dives into everything you need to know!

A Complex Mess: Simple IRA Maximum Contributions 2025 and Beyond 
A Complex Mess: Simple IRA Maximum Contributions 2025 and Beyond 

Prior to 2025, it was very easy to explain to an employee what the maximum Simple IRA contribution was for that tax year.  Starting in 2025, it will be anything but “Simple”.  Thanks to the graduation implementation of the Secure Act 2.0, there are 4 different limits for Simple IRA employee deferrals that both employees and companies will need to be aware of.

New Age 60 – 63 401(k) Enhanced Catch-up Contribution Starting in 2025
New Age 60 – 63 401(k) Enhanced Catch-up Contribution Starting in 2025

Good news for 401(k) and 403(b) plan participants turning age 60 – 63 starting in 2025: there is now an enhanced employee catch-up contribution thanks to Secure Act 2.0 that passed back in 2022.  For 2025, the employee contributions limits are as follows: Employee Deferral Limit $23,500, Age 50+ Catch-up Limit $7,500, and the New Age 60 – 63 Catch-up: $3,750.

Leaving Your Job? What Should You Do With Your 401(k)?
Leaving Your Job? What Should You Do With Your 401(k)?

When you separate service from an employer, you have to make decisions with regard to your 401K plan.  It’s important to understand the pros and cons of each option while also understanding that the optimal solution often varies from person to person based on their financial situation and objectives.  The four primary options are:

1)      Leave it in the existing 401(k) plan

2)      Rollover to an IRA

3)      Rollover to your new employer’s 401(k) plan

4)      Cash Distribution

When Should High-Income Earners Max Out Their Roth 401(k) Instead of Pre-tax 401(k)?
When Should High-Income Earners Max Out Their Roth 401(k) Instead of Pre-tax 401(k)?

While pre-tax contributions are typically the 401(k) contribution of choice for most high-income earners, there are a few situations where individuals with big incomes should make their deferrals contribution all in Roth dollars and forgo the immediate tax deduction.

How Much Should I Contribute to Retirement?
How Much Should I Contribute to Retirement?

A question I’m sure to address during employee retirement presentations is, “How Much Should I be Contributing?”.   In this article, I will address some of the variables at play when coming up with your number and provide detail as to why two answers you will find searching the internet are so common.

Federal Disaster Area Penalty-Free IRA & 401(k) Distribution and Loan Options   
Federal Disaster Area Penalty-Free IRA & 401(k) Distribution and Loan Options   

Individuals who experience a hurricane, flood, wildfire, earthquake, or other type of natural disaster may be eligible to request a Qualified Disaster Recovery Distribution or loan from their 401(k) or IRA to assist financially with the recovery process. The passing of the Secure Act 2.0 opened up new distribution and loan options for individuals whose primary residence is in an area that has been officially declared a “Federal Disaster” area.

Starting in 2024, 401(k) Plan Will Be Required to Cover Part-time Employees   
Starting in 2024, 401(k) Plan Will Be Required to Cover Part-time Employees   

In the past, companies have been allowed to limit access to their 401(k) plan to just full-time employees but that is about to change starting in 2024. With the passing of the Secure Act, beginning in 2024, companies that sponsor 401(K) plans will be required to allow part-time employees to participate in their qualified retirement plans.

Fewer 401(k) Plans Will Require A 5500 Audit Starting in 2023
Fewer 401(k) Plans Will Require A 5500 Audit Starting in 2023

401(K) plans with over 100 eligible plan participants are considered “large plans” in the eyes of DOL and require an audit to be completed each year with the filing of their 5500. These audits can be costly, often ranging from $8,000 - $30,000 per year.

Starting in 2023, there is very good news for an estimated 20,000 401(k) plans that were previously subject to the 5500 audit requirement. Due to a recent change in the way that the DOL counts the number of plan participants for purposes of assessing a large plan filer status, many plans that were previously subject to a 401(k) audit, will no longer require a 5500 audit for plan year 2023 and beyond.

3 New Startup 401(k) Tax Credits
3 New Startup 401(k) Tax Credits

When Congress passed the Secure Act 2.0 in December 2022, they introduced new tax credits and enhanced old tax credits for startup 401(k) plans for plan years 2023 and beyond. There are now 3 different tax credits that are available, all in the same year, for startup 401(k) plans that now only help companies to subsidize the cost of sponsoring a retirement plan but also to offset employer contributions made to the employee to enhance a company’s overall benefits package.

Mandatory Roth Catch-up Contributions for High Wage Earners - Secure Act 2.0
Mandatory Roth Catch-up Contributions for High Wage Earners - Secure Act 2.0

Starting in 2026, individuals that make over $145,000 in wages will no longer be able to make pre-tax catch-up contributions to their employer-sponsored retirement plan. Instead, they will be forced to make catch-up contributions in Roth dollars which means that they will no longer receive a tax deduction for those contributions.

Secure Act 2.0:  Roth Simple IRA Contributions Beginning in 2023
Secure Act 2.0:  Roth Simple IRA Contributions Beginning in 2023

With the passage of the Secure Act 2.0, for the first time ever, starting in 2023, taxpayers will be allowed to make ROTH contributions to Simple IRAs. Prior to 2023, only pre-tax contributions were allowed to be made to Simple IRA plans.

Self-Employment Income In Retirement? Use a Solo(k) Plan To Build Wealth
Self-Employment Income In Retirement? Use a Solo(k) Plan To Build Wealth

It’s becoming more common for retirees to take on small self-employment gigs in retirement to generate some additional income and to stay mentally active and engaged. But, it should not be overlooked that this is a tremendous wealth-building opportunity if you know the right strategies. There are many, but in this article, we will focus on the “Solo(k) strategy

401(K) Cash Distributions: Understanding The Taxes & Penalties
401(K) Cash Distributions: Understanding The Taxes & Penalties

When an employee unexpectedly loses their job and needs access to cash to continue to pay their bills, it’s not uncommon for them to elect a cash distribution from their 401(K) account. Still, they may regret that decision when the tax bill shows up the following year and then they owe thousands of dollars to the IRS in taxes and penalties that they don’t have.

401K Loans: Pros vs Cons
401K Loans: Pros vs Cons

There are a number of pros and cons associated with taking a loan from your 401K plan. There are definitely situations where taking a 401(k) loan makes sense but there are also number of situations where it should be avoided.

Can You Contribute To An IRA & 401(k) In The Same Year?
Can You Contribute To An IRA & 401(k) In The Same Year?

There are income limits that can prevent you from taking a tax deduction for contributions to a Traditional IRA if you or your spouse are covered by a 401(k) but even if you can’t deduct the contribution to the IRA, there are tax strategies that you should consider

Should You Make Pre-tax or Roth 401(k) Contributions?
Should You Make Pre-tax or Roth 401(k) Contributions?

When you become eligible to participate in your employer’s 401(k), 403(b), or 457 plan, you will have to decide what type of contributions that you want to make to the plan.

Cash Balance Plans: $100K to $300K in Pre-tax Contributions
Cash Balance Plans: $100K to $300K in Pre-tax Contributions

DB/DC combo plans can allow business owners to contribute $100,000 to $300,000 pre-tax EACH YEAR which can save them tens of thousands of dollars in taxes.

Coronavirus Relief: $100K 401(k) Loans & Penalty Free Distributions
Coronavirus Relief: $100K 401(k) Loans & Penalty Free Distributions

With the passing of the CARES Act, Congress made new distribution and loan options available within 401(k) plans, IRA’s, and other types of employer sponsored plans.

$5,000 Penalty Free Distribution From An IRA or 401(k) After The Birth Of A Child or Adoption
$5,000 Penalty Free Distribution From An IRA or 401(k) After The Birth Of A Child or Adoption

New parents have even more to be excited about in 2020. On December 19, 2019, Congress passed the SECURE Act, which now allows parents to withdraw up to $5,000 out of their IRA’s or 401(k) plans following the birth of their child

Percentage of Pay vs Flat Dollar Amount
Percentage of Pay vs Flat Dollar Amount

Enrolling in a company retirement plan is usually the first step employees take to join the plan and it is important that the enrollment process be straight forward. There should also be a contact, i.e. an advisor (wink wink), who can guide the employees through the process if needed. Even with the most efficient enrollment process, there is a lot of

What Happens To My Pension If The Company Goes Bankrupt?
What Happens To My Pension If The Company Goes Bankrupt?

Given the downward spiral that GE has been in over the past year, we have received the same question over and over again from a number of GE employees and retirees: “If GE goes bankrupt, what happens to my pension?” While it's anyone’s guess what the future holds for GE, this is an important question that any employee with a pension should

Volatility, Market Timing, and Long-Term Investing
Volatility, Market Timing, and Long-Term Investing

For many savers, the objective of a retirement account is to accumulate assets while you are working and use those assets to pay for your expenses during retirement. While you are in the accumulation phase, assets are usually invested and hopefully earn a sufficient rate of return to meet your retirement goal. For the majority,

Target Date Funds: A Public Service Announcement
Target Date Funds: A Public Service Announcement

Before getting into the main objective of this article, let me briefly explain a Target Date Fund. Investopedia defines a target date fund as “a fund offered by an investment company that seeks to grow assets over a specified period of time for a targeted goal”. The specified period of time is typically the period until the date you “target” for retirement

Big Changes For 401(k) Hardship Distributions
Big Changes For 401(k) Hardship Distributions

While it probably seems odd that there is a connection between the government passing a budget and your 401(k) plan, this year there was. On February 9, 2018, the Bipartisan Budget Act of 2018 was passed into law which ended the government shutdown by raising the debt ceiling for the next two years. However, also buried in the new law were

403(b) Lawsuits Continue To Spread To More Colleges
403(b) Lawsuits Continue To Spread To More Colleges

In the last 3 years, the number of lawsuits filed against colleges for excessive fees and compliance issues related to their 403(b) plans has increased exponentially. Here is a list of just some of the colleges that have had lawsuit brought against them by their 403(b) plan participants:

How Does A Simple IRA Plan Work?
How Does A Simple IRA Plan Work?

Not every company with employees should have a 401(k) plan. In many cases, a Simple IRA plan may be the best fit for a small business. These plans carry the following benefits

How Does A SEP IRA Work?
How Does A SEP IRA Work?

SEP stands for “Simplified Employee Pension”. The SEP IRA is one of the most common employer sponsored retirement plans used by sole proprietors and small businesses.

How Do Single(k) Plans Work?
How Do Single(k) Plans Work?

A Single(k) plan is an employer sponsored retirement plan for owner only entities, meaning you have no full-time employees. These owner only entities get the benefits of having a full fledge 401(k) plan without the large administrative costs associated with traditional 401(k) plans.

gbfadmin
Previous

NY Free Tuition - Facts and Myths
Next

Changes to 2016 Tax Filing Deadlines