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Your retirement can truly be whatever you make it, but it's important to have a plan that lays out what that looks like. If you've been making contributions to your 401(k), you may already have a good idea of what retirement would look like. However, if you haven't been making contributions, there are more financial considerations as you enter retirement without a 401(k). You'll need to consider how you'll supplement your Social Security benefits and what other financial resources can you put toward retirement costs.

Here's what you can focus on right now — building a retirement plan and financial action steps for you to take — so that you can meet some of your retirement goals in the near future.

Your First Step: Make a Retirement Plan

A retirement plan is like your road map to this next step in life — it helps you to lay out the financial goals and action steps you'll need to take in order to achieve the caliber of retirement life you want. Though a retirement without a 401(k) is a risk that needs to be addressed, the retirement plan covers way more than just a 401(k). A complete retirement plan would include:

  • A Look at Your Retirement Goals: What do you, ultimately, want your life to look like in retirement? Deciding how you want to spend your time during retirement — whether that's working part-time, or traveling to your heart's content — helps determine the kind of financial resources you'll need to accumulate.
  • A Deep Dive into Your Financial Resources: Look at the gap between what your current financial resources for retirement look like, and what they need to look like to afford your retirement goals.
  • A Review of Your Retirement Spending Budget: Review what your actual retirement spending budget for everyday living expenses is going to look like, compared to what your spending budget looks like now. Which costs will increase (such as travel or health expenses), and which costs are likely to decrease (such as your mortgage payment, it may be paid off by the time you retire)? Take the time to estimated your everyday living expenses in retirement.

Next, you need to know what financial action steps you can take now in order to afford the lifestyle you want.

Retirement is Soon: Action Steps to Take if You Don't Have a 401(k)

There are specific financial action steps you can take today that will get you in a better place to retire soon, even without a 401(k).

  • Get an Estimate of Your Social Security Benefits: Sign up for a free account at my Social Security to get an actual estimate of how much your social security checks will be each month. This will help you understand how much more money per month you'll need to supplement your retirement income. Could you work part-time to cover the gap between your current financial resources for retirement, and what you need them to be in order to reach your retirement goals? Can you decrease your overall living costs so that you will need less money each month to live?
  • Open up a Health Savings Account: Do you have a health savings account, or does your employer offer one? These are tax-deferred accounts that can be used to pay for medical expenses, and they're paired together with a High Deductible Health Care Plan. A little-known use for these accounts is to pay for both medical and living expenses during retirement (after you reach 65, you are no longer penalized the 20 percent for using funds for non-medical expenses).
  • Play Catch-Up with Retirement Contributions: If you still have a few years until you retire, then it's time to make as many catch-up retirement contributions as you can. Individual Retirement Accounts (IRA) allow annual catch-up retirement account contributions if you're over 50 years of age, and you can make annual catch-up contributions to an HSA if you're 55 and older. Does your employer offer a 401(k) plan? Now's the time to sign up for one, and make annual catch-up contributions if you're 50 or older (keep in mind that participating in your employer's plan might decrease the amount of IRA contributions you can deduct from your taxes). You can catch up even faster if your employer offers a matching contribution.

The earlier you start to save for retirement, the more likely it is that you get to live the retirement life you want. While everyone experiences unforeseen financial setbacks that can derail your retirement plans a bit, it's always better to have a plan in place to go back to, than to just not plan at all. A retirement without a 401(k) may be a difficult one, so make the necessary changes now to avoid the consequences.

This information and recommendations contained herein is compiled from sources deemed reliable, but is not represented to be accurate or complete. In providing this information, neither KeyBank nor its affiliates are acting as your agent or is offering any tax, accounting, or legal advice.

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