4 in 10 Americans Don't Have Access to a 401(k). Here's How to Save for Retirement Without One

If you don't make an effort to save for retirement, you might end up cash-strapped once your career comes to an end. It's important to consistently contribute to some type of retirement account.

You could save and invest for retirement in a regular brokerage account. But it's silly to give up the tax break that comes with a 401(k) if you're able to save in one.

With a traditional 401(k), your contributions go in tax-free, and investment gains in your account are tax-deferred until you're ready to take withdrawals. There are no such tax breaks in a traditional brokerage account.

But what if you don't have access to a 401(k) through your job? A recent CNBC survey found that only 60% of Americans have access to a 401(k) or similar employer-sponsored retirement plan.

If that's the case for you, worry not. You can sock money away for retirement in another tax-advantaged account -- an IRA. And there are several benefits to saving in one of these accounts.

The upside of IRAs

Like traditional 401(k)s, the money that goes into a traditional IRA is tax-free. And investment gains are also tax-deferred.

But one big advantage of IRAs over 401(k)s is that they allow you to invest in individual stocks. With a 401(k), you're generally limited to a mix of funds, like target date funds (which adjust your asset allocation to meet a certain milestone), mutual funds (which employ fund managers to devise an investment strategy), and index funds (which are often passively managed funds that simply track different market benchmarks, like the S&P 500 index).

The problem with being limited to funds is twofold. First, you don't get a say in exactly how you're investing.

If you invest in a mutual fund, you don't get to decide which assets that fund owns. But with an IRA, you can hand-pick every single stock that goes into your investment mix.

What's more, the fees associated with certain types of funds can be high. With index funds, this generally is not a problem since these funds are passively managed. But with mutual funds, you could end up facing hefty fees because you're effectively paying a fund manager's salary (not directly, of course, but you are paying for somebody's expertise).

With an IRA, you're not limited to investing only in funds, and because of that, you have the option to keep your fees down. And the less money you lose to fees, the more wealth you can grow over time.

A good way to manage your IRA

One advantage 401(k)s have over IRAs is that contributions are taken as payroll deductions, so you don't have to actively fund your account. This makes it more likely that you'll stay on track with your savings goals.

IRA contributions aren't taken out of your pay because an IRA is not tied to your job. But you can create a similar setup to what you'd have with a 401(k) by setting up automatic IRA contributions. Just arrange for a certain amount of money to land in your IRA each month from your checking account, and you should be all set.

Having access to a 401(k) can make saving for retirement convenient. But don't sweat it if you don't work for a company that offers one. You can do quite well with an IRA, and you may even find that it's a better option for your long-term savings.