Can You Save for Retirement Without a 401(K)?

If you are not eligible to 401(k), you can choose other products to plan your retirement. Shutterstock

Here’s a pop quiz for you. When you hear the word retirement, what immediately comes to mind? Some of you might have visions of traveling the world, playing golf, or hanging out with your grandkids. But, for most of you, you’re probably thinking about your 401(k).

Since first introduced in the early 1980s, defined contribution plans, such as a 401(k), have become the go-to-retirement plan. In fact, according to a study from insurance broker Willis Towers Watson, around 86 percent of Fortune 500 companies offer these plans instead of traditional pensions.

What Is a 401(k)?

For those unaware, a 401(k) is an employer-sponsored retirement. Employers prefer defined contribution plans over pensions because they fluctuate with the market. So, if the fund isn’t performing well, payouts won’t be as much. With pensions, payments will always remain the same regardless of the market.