It's never too early to save for retirement but many people don't have access to an employer-sponsored plan. Pratik Patel, managing director and head of family wealth strategies for BMO Family Office, joined Cheddar News to discuss other options to ensure safe retirement.

<div class="block">It&#39;s never too early to save for retirement but many people don&#39;t have access to an employer-sponsored plan. Pratik Patel, managing director and head of family wealth strategies for BMO Family Office, joined Cheddar News to discuss other options to ensure safe retirement.</div>

Closing Bell

Stretching Your Dollar: Saving for Retirement Without a 401k

Time. Now for stretching your dollar where we give you changeable tips to help you make the most of your money. Most people have probably heard the phrase it's never too early to save for retirement. If you have a 401k through your employer, saving for retirement can be a relatively simple process. But many individuals face the challenge of not having access to an employer sponsored plan. Luckily, there are alternative solutions available to ensure a safe retirement. So joining me now is Pratik Patel, managing director and head of Family Wealth Strategies at the wealth consulting firm BMO Family Office. Thanks for joining. So let's get, let's get started here. What are some of the top ways that people can save for retirement if they don't have a 401k? Yeah, absolutely. Uh You know, the easiest solution for me would be opening an IRA. Um There's a number of tax benefits for doing it. It's still 100% for retirement planning. Um If you start early, just like you mentioned before, it can, it can really add up um The contribution limits for an IRA today are $6500. If, if you're 30 and you contribute that 650 $6500 for the next 35 years. Uh until 65 you're gonna have over $725,000 at your disposal in, in that Ira account. Um So other options are H SAS. Um We're a big fan of H SAS because not only do you get a tax deduction on the contribution, um but that money can grow tax free and the distributions can be tax free if you're using them for medical expenses. So oftentimes what clients will do is um they will pair a high deductible medical plan with an H S A and then they will save their medical bills. Um If you're having a baby or pregnancy in a given year, you can pay for that out of your pocket, save those medical receipts and then, and then use them 5, 10, 20 years down the road to access that money. Um A couple other options if you're self-employed or your set plans or solo 401k s, um You can put money in a brokerage account, um do automatic transfers to savings account. There's a number of different ways where you can really amplify your long term savings for retirement. Uh Even if you don't have access to a four oh one. Ok. So let's talk about the options for people who are self employed. Critique. You went through some great options. If you work for a company you still have access obviously to an Ira and S A in addition to a 401k. But what if you work for yourself? What's the best way to navigate that? Yeah, we talked about a moment ago. The government still does have options for you. Um They'll let you do something called a simplified employee pension or a set ira. Um You can also do a solo 401k and these eliminate a lot of the hurdles that smaller business owners will face in terms of number of employees participation roles, things like that. So if uh if you do have a small business, it's really worthwhile to talk to an investment advisor and see what your options are. Some people have considered investing in real estate. A lot of people think that the American dream is owning a home critique even though it's much more expensive these days than it was a while ago. Do you think that's a viable option? An alternative that is to a 41 K? Absolutely. We have a number of clients who will invest in real estate, especially rental properties. Um If you can afford the down payment, then oftentimes if you can learn the numbers correctly, not only would that property be cash flow positive with your mortgage, but in 20 30 years, once that mortgage is paid off, it is providing an annuity stream income for you every single month that you could use. Not to mention the equity that's built into the property that can be sold to help fund your retirement. It's a great way to diversify your retirement savings. I see here that more states have been adopting programs for, in an effort to improve retirement security and provide an alternative to a 401k. What are these, some of these state sponsored programs that you think our viewers should look into? Yeah. Um, some of the state sponsored programs were talking about. Um, well, often times we'll, we'll see clients use 5 29 plans and things like that, that can be rolled into a Roth. Um You may not get the federal benefits, but you will get some state tax benefits as well. So it can help amplify your savings that way too. Any other tips uh for people who are wondering, I hope I'm not falling behind when it comes to saving for retirement, you know what I would say is there's, it's never too early and in no amount is too small. So if you're able to put something away for retirement, start with that, even if it's just a few $100 you'll be surprised how much it adds up and with the help of a good advisor. Um that growth over a number of years can, can really amplify and compound. All right. Preti Patel, managing director and Head of Family Well, strategies at BMO Family Office, Pratique. Thank you.