Financial Planners to Target Retirement-Planning Americans without 401(k)s

by | 5 minute read

"Buoyed by a grow­ing econ­o­my and stock mar­ket gains, more Amer­i­cans are feel­ing con­fi­dent about their abil­i­ty to afford a com­fort­able retire­ment, accord­ing to a long-running nation­al sur­vey released this week. Still, there are big gaps in con­fi­dence between work­ers who have a retire­ment plan, such as a 401(k), and those who don't, accord­ing to Con­sumer Reports."

"As in pre­vi­ous years, par­tic­i­pa­tion in a retire­ment plan is close­ly linked to work­ers’ con­fi­dence. Some 74% of those cov­ered by a 401(k), an IRA, or a pen­sion are at least some­what con­fi­dent about retire­ment, com­pared with just 39% of those who aren’t."

"Half of Amer­i­can work­ers lack an employ­er plan, data show. Many work­ers these days are free­lancers, or they work part-time and don't qual­i­fy for a plan. Oth­ers work for small busi­ness­es that lack retire­ment ben­e­fits."

In the absence of set retire­ment plans, con­sumers who Want To Be More Proac­tive About Plan­ning For Retire­ment will prob­a­bly turn to the inter­net for alter­na­tives. Last month, 65% of these con­sumers used a search engine to research a prod­uct or ser­vice they were con­sid­er­ing. Price is a huge fac­tor to them since 55.6% want to reduce debt and increase sav­ings this year. That's prob­a­bly why 63.6% of this audi­ence took action after receiv­ing direct mails ads and coupons and 53.9% were dri­ven to action by ads on dai­ly deals sites such as Groupon last year.

"The good news is that it’s easy for free­lancers and oth­er work­ers who lack employ­er plans to set up their own ver­sion of a 401(k), which can help save on tax­es as well as build sav­ings. You can find these retirement-account options offered at most fund com­pa­nies and bro­ker­age firms at low cost. Here are three pop­u­lar plans to con­sid­er."

"Tra­di­tion­al or Roth IRA

If you’re just start­ing out, you may want to stick to basics: a tra­di­tion­al or Roth IRA. You can put in as much as $6,000 in 2019 (plus an addi­tion­al $1,000 if you’re 50 or old­er). With a tra­di­tion­al IRA, your con­tri­bu­tions may be deductible, and the growth is tax-deferred."

"With a Roth IRA, your con­tri­bu­tions are made on an after-tax basis, but your mon­ey will grow tax-free, and you’ll pay no tax­es on your dis­tri­b­u­tions as long as you fol­low the with­draw­al rules. (Gen­er­al­ly, you must have held the account for five years and have turned 59½ or old­er.) Plus, you can take out your own con­tri­bu­tions any­time with­out pay­ing tax. Roth IRAs do have income lim­its: Those who are mar­ried and fil­ing joint­ly must have mod­i­fied adjust­ed gross incomes below $193,000 this year to make a full con­tri­bu­tion."


If you’re work­ing for your­self or have a part-time job, you can open a Sim­pli­fied Employ­ee Pen­sion (SEP) IRA. With these plans, you can get a deduc­tion on your con­tri­bu­tion, which will grow tax-deferred. As with reg­u­lar IRAs, SEPs are wide­ly avail­able at bro­ker­ages and fund com­pa­nies."

"If you have incor­po­rat­ed as busi­ness, the over­all max­i­mum you can stash away in a SEP is 25% of your com­pen­sa­tion, up to $56,000 in 2019. For those who are unin­cor­po­rat­ed, the same max applies, but the per­cent­age of income you can con­tribute is reduced by deduc­tions, includ­ing half the self-employment tax (the FICA tax)."

"These plans are high­ly flex­i­ble, which makes the SEP an appeal­ing choice if you don’t have a steady income stream."

"Indi­vid­ual 401(k)

For sole pro­pri­etors, an indi­vid­ual 401(k), also known as a solo 401(k), allows you to set up your own retire­ment plan with many of the same ben­e­fits as a large-company 401(k). (To qual­i­fy, you can't have any employ­ees oth­er than your spouse.) As with an employ­er plan, you can have con­tri­bu­tions deduct­ed from your pay­check and invest­ed tax-deferred in the funds of your choice. Some providers offer a Roth 401(k) option."

"With a solo 401(k), you may be able to stash away even more mon­ey than you can in a SEP IRA, depend­ing on your income lev­el, says Jef­frey Levine, a CPA and cer­ti­fied finan­cial plan­ner at Blue­Print Wealth Alliance in Gar­den City, N.Y. That’s because you can con­tribute two ways, both as an employ­er and as an employ­ee, up to a max­i­mum of $56,000 this year, or $62,000 if you’re 50 or old­er."

"With a solo 401(k), you can also bor­row from your plan, gen­er­al­ly you can take out as much as 50% of the bal­ance up to $50,000, if your plan offers that fea­ture. That’s a wel­come back­stop in an emer­gency. But as with a reg­u­lar 401(k), your goal is to leave that mon­ey alone to grow until you’re ready to tap it in retire­ment."

Finan­cial com­pa­nies can pro­mote their abil­i­ty to help New­ly Proac­tive Retire­ment Plan­ners choose the retire­ment plan that is the best for them through many forms of adver­tis­ing. Last year, accord­ing to Audi­enceS­CAN, these con­sumers were dri­ven to action by email ads (54.3%), both dig­i­tal and over-the-air radio ads (49.9%), print and dig­i­tal news­pa­per ads (49.3%) and text link ads on web­sites (41.2%). They're also 18% more like­ly than oth­ers to take action because of ads on their mobile smart­phone apps and text ads they received and 41% more like­ly to find adver­tis­ing on social media use­ful.

Audi­enceS­CAN data is avail­able for your appli­ca­tions and dash­boards through the Sales­Fu­el API. Media com­pa­nies and agen­cies can access Audi­enceS­CAN data through the Audi­enceS­CAN Reports in AdMall.

Rachel Cagle

Rachel Cagle

Rachel is a Research Ana­lyst, spe­cial­iz­ing in audi­ence intel­li­gence, at Sales­Fu­el. She also helps to main­tain the major accounts and co-op intel­li­gence data­bas­es. As the hold­er of a Bach­e­lors degree in Eng­lish from The Ohio State Uni­ver­si­ty, Rachel helps the rest of the Sales­Fu­el team with their writ­ing needs.