Alternatives To 401k Retirement Plan

Most people might think 401(k) retirement plan is the best choice ever, whereas the rest consider 401k rollover options. For one of my acquaintances, 401(k) plan simply is not.

His shoulders sank as he learned the recent maximum limits of 401k contribution remains the same this year (which has been three years in a row already!). He hoped the government raised it to $30,000 or if possible $50,000.

He sneeringly quipped, "How does someone retire off $16.5k/yr after 30 years? Ain't gonna happen!" Some other question why such limitations are implemented. "What's the point?" there they whine. It seems to me that the 2010 announced limitations are greatly unsatisfactory for workers or entrepreneurs who make more money than the maximum limitations.

Contrary to what some citizens complain about the stagnant limits, an up to date survey stated that with more than 550,000 401(k) accounts as the object, only a scarce number of Americans are in fact saving the maximum tolerable by the IRS or their plan limits.

Regardless of the fact that you can or cannot save more than the limits, if you really want to retire with peace of mind but do NOT think that 401(k) is the appropriate one for you, do not be troubled. You still have much better options than saving your capital to 401(k) plan.

Here are some of possible alternatives to 401k,

Roth IRA

If you are qualified enough, try applying for it even before trying 401(k). It is worth it.

Pension Plan

This is a good alternative especially if you are currently working in a company or firm offering pension plans. Besides adding to your own contributions, you can also save some more to your 401(k) plan.

Traditional IRA

Attempt this if you are not eligible for a Roth.

Conventional Way

People tend to overlook an old method of keeping money for their old days that our ancestors used to do, i.e. regular saving. But hey people, it's simple and not to mention, sensible! As long as you are disciplined (not to spend it before the days come), there is no reason to get anxious about how you spend your retirement times. To note, there is no tax advantages to your retirement savings.

Those are some options that I can figure out to get through the current economic hardships. It is not certainly a one-size-fits-all plan, but the four alternatives above are the best from the worst.

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