How Millennials Can Save For Retirement Without A 401k

How Millennials Can Save For Retirement Without A 401k

One of the things I hate most when I read about investing is how much advice is tailored toward those who have an employer sponsored 401(k).

Of course a 401(k) is a great way to save for retirement as most employers offer some sort of “match” on money you put into your 401(k) from your paycheck. In some cases this is a 100% match of every dollar you put in up to a certain percentage, like 5% or 6% of your salary, or it may be a $0.50 match for every dollar you put in up to that same threshold. These employer matches are an easy way to ensure a great “return” on the money you invest. If your employer has a 100% match, you are automatically doubling your money!

But the truth is that many millennials don’t have the luxury of an employer sponsored 401(k). I used to have one when I worked at a “traditional” job, but now that I’m self-employed, I have to fund 100% of my own retirement investments.

A 2014 report from the Federal Reserve showed that almost half of responding households surveyed didn’t have access to a 401(k), 403(b), or other employer sponsored retirement plan.

If you are a millennial and you are thinking about investing, don’t put it off just because your employer doesn’t offer a 401(k) plan. There are other ways you can save for retirement without a 401(k) plan.

Mutual Funds

You could invest in mutual funds through companies such as Vanguard or Prudential. These companies allow you to open a brokerage account made of funds from many different investors who put their money into a variety of investments including bonds, stocks and other assets. As gains are achieved this produces income for the investors, and as a beginning investor you don’t have to have a ton of money to get started. This is great news for millennials, because you can invest with as little as $500. All of the investors share gains and losses in the funds, and there are some fees, so be sure to ask about those to avoid getting billed for services you weren’t aware you would be charged for.


It’s safe to assume that many millennials are novice investors, and thus robo-advisors are a great choice for investing for retirement. Robo-advisors, like Wealthfront, can help you make good investing decisions based on your timeline and goals. They are also relatively low-cost compared to many other retirement options, and they are easy to “set and forget” since they offer automatic rebalancing. This means you won’t have much work to do outside of the initial set up and determining the amount you want to contribute for future months.

These are just a couple of ways of how millennials can save for retirement even without a 401(k). So, if you are considering getting started investing, don’t put it off just because your employer doesn’t offer one. You can still save for retirement and other future goals by setting up a plan on your own.

What other ways can you think of how millennials can save for retirement without a 401(k)?

About The Author

This is a post from Kayla of Kayla is a personal finance blogger in her mid-20s who loves to write about money topics of all kinds.


  1. Mustard Seed Money

    I had no idea that so many millennials did not have 401ks. This seems crazy in light of how difficult it is to fund retirement. Thanks for sharing some tips to help!!!

    1. Kayla @ Shoeaholicnomore

      I know! I didn’t know that so many didn’t have access to them either until I started looking into it more since I don’t have a 401(k) now that I’m self employed. There are still ways to save for retirement, but you have to be more diligent about it without an employer sponsored plan.

  2. Trevor McClintock

    Interesting blog post Edwin.
    Going self-employed is certainly complicated enough as it is in this day and age. Ensuring a solid retirement is so important these days. If you do not have an employer sponsored 401 helping out, these tips can certainly point an individual in the right direction.


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