What is the best way to begin saving for retirement with a company that does not offer a 401(k) plan?
Answers | 1
The long and short of it is that retirement savings is all about investing. If you do not put the money in an investment (a place that is going to outpace inflation's 3-4% a year climb), then you aren't saving for the future, you're "parking" the money, at best.
Going back to the best way to save and the four aforementioned associated factors - they all tie in together to set your savings priorities. In a nutshell, you must have enough money in an emergency savings account to cover at least 6 months' worth of expenses. If you don't, when - not if - the emergency happens (car issue, doctor bill, broken appliance, etc) then you will go into your newly established retirement investment account to take care of the need; thereby nullifying the potential returns of that investment in ways too enormous to get into here.
Start your savings plan there. While building that savings account, investigate with your company about other retirement opportunities that they may present, like stock options or SEP IRAs, that may also be advantageous to retirement savings.
Once you've established your savings and exhausted your company's retirement options, then it's time to look at other retirement vehicles that can provide tax shelter on the interest growth. Traditionally, most people think IRAs (individual retirement accounts), but in some cases, a consideration of life insurance and/or annuities would be appropriate - all determined by those four factors.
This is all just a general game plan; I'd love to give you more clarity on your specific situation to see where you get more value.