Your Money

No retirement plan at work? Use this

Kelley Holland, special to CNBC
No 401(k)? No problem
No 401(k)? No problem

Got a retirement savings plan at work? If you don't, you're not alone.

In fact, 4 in 10 people do not have access to a retirement plan at work, according to an analysis by the Pew Charitable Trusts. That translates to more than 30 million full-time, private-sector workers ages 18 to 64, the report found.

That's just one reason why more and more Americans are nearing retirement age with little or nothing in the way of savings for later in life. While confidence in a financially secure retirement has increased in recent years, as of 2015, only 22 percent were highly confident they will have enough money to last.

The good news is that workplace plans are not the only way to save for your retirement. President Barack Obama included proposals to increase access to retirement savings plans in his budget, using state-based retirement plans and more.

Even apart from those proposals, you have several ways you can save outside of a workplace plan.

One easy option is an Individual Retirement Account. If neither you nor your spouse are covered by a retirement plan at work, your contribution will be tax deductible no matter what your income is, and you can contribute up to $5,500 a year, or $6,500 if you are age 50 or over. (If you are filing jointly with a spouse who is covered by a plan, your contribution's tax deductibility shrinks if your combined income is over $184,000; it disappears for incomes over $194,000.)

No matter how much you are allowed to deduct, your contributions will grow tax deferred, and they can add up. If you put in the maximum every year starting at age 30 and your savings have an average annual return of 7 percent, your account balance will reach $976,585 before taxes by age 67.

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Those who are self-employed have a related option: the SEP IRA, which generally allows people to contribute the lesser of 25 percent of their income or $53,000.

For self-employed workers, "it gives them a higher maximum [contribution] than anybody in a traditional 401(k)," said Marla Mason, a financial advisor with Presidential Brokerage in Denver.

There's a catch, though. You can only contribute to a SEP IRA if you have had reported income for three of the past five years. But self-employed workers also have the option of a "solo" 401(k), Mason said.

Contributions to a solo 401(k) plan are subject to the same limits as those with a workplace 401(k), but half will come from you as the employee and half as the employer. That creates a potential tax savings.

"There is nothing that limits you contributing at a tax-deductible basis from the business, and the employee part is tax deferred," Mason said.

Health savings accounts can keep retirement plans in shape

A health savings account can also serve as a savings account for later in life. These savings plans are only available to people with high-deductible health insurance, so it is possible you may need money from your HSA for current medical expenses. But if you do not, these accounts can be a potent savings tool, said Eric Dowley, head of HSA and health-care strategies at Fidelity Investments in Boston.

"It is probably the most tax-advantaged vehicle out there" for saving, he said. Since contributions are pretaxed, the money grows tax free, and if it is used for qualified medical expenses, the withdrawal is also tax free.

Health expenses in retirement can be steep, even with Medicare. Fidelity estimates that a couple will spend as much as $245,000 on out-of-pocket medical expenses in retirement, Dowley said.

HSA money can also be used for other retirement expenses, though if they are, withdrawals are taxed as ordinary income.

Also, because contribution limits on HSAs are relatively low, $3,350 for an individual or $6,750 for a family under age 55, Dowley cautioned against making an HSA your primary retirement savings choice.

There are other drawbacks to using HSAs as a retirement kitty, Mason said.

Since HSAs are paired with high-deductible health plans, a major medical condition, accident or illness can prove very costly, she said.

"If you have a serious illness that comes along prior to retirement, you not only have to deal with that but you have now damaged your retirement in the process," Mason said.

Afraid of outliving your money? Here's one solution

Some experts point to so-called longevity annuities as an option for making sure you have income that lasts as long as you do. These annuities, which you buy at a discount to their face value, start paying out years later and will continue paying for the rest of your life.

Like any annuity, these may come with punishingly high fees, so reading the small print is crucial. And with interest rates so low right now, payments may be smaller than you like.

Mason also said that insurers frequently roll out new products that may offer features not currently available, and locking into a long-term future annuity may keep you from taking advantage of any changes.

Still, longevity annuities do offer some potential advantages. For starters, you do not have to count longevity annuities when you calculate minimum required distributions from retirement accounts, thus leaving more of your money to grow tax deferred. And for everyone, these annuities provide protection against outliving your savings — a growing consideration as life expectancies increase.

Jason York | E+ | Getty Images

And retirement is not cheap these days. You may need as much as 10 times your final annual salary in savings to retire comfortably at age 67, according to a Fidelity estimate.

Saving that much is a daunting task for anyone, but Mason believes it is surmountable.

"We tend to worry a lot about whether or not I'm going to have to eat cat food in my later years," she said. But I do think we've kind of overburdened people with this. If they step up to the plate and start saving before they get to retirement, they can take charge. It's almost a liberating kind of thing if you take charge of what you are going to do."