Gig Worker Retirement Planning: Is It Possible Without a 401(k)?

More people are stepping away from traditional 9-to-5 jobs and choosing gig work, freelancing, or self-employment. While the flexibility is a big plus, it also means many don’t have access to traditional retirement tools like a 401(k).

That gap can create serious challenges down the road. Fortunately, gig workers still have options to build a retirement safety net. The key is knowing what alternatives exist and how to start using them today.

The Retirement Challenge for Gig Workers

In 2022, about 36% of the US workforce were independent workers. Yet many aren’t setting money aside for the future, with 27% of full-time gig workers reporting having no retirement savings at all.

Furthermore, 37% of full-time independents are between 21 and 38, which is an ideal age range for starting to build long-term savings. Starting early, even with small amounts, can make a big difference down the road.

A big reason is that freelancers and independent workers don’t get the automatic benefits traditional employees do, like employer-sponsored 401(k) plans or matching contributions, or lack thereof. As such, gig workers expect to retire around age 67–three years later than traditional employees. Without that built-in structure, many gig workers delay saving, especially when income is unpredictable.

Nearly half of US private-sector workers, about 59 million people, don’t have access to an employer-sponsored retirement plan. For gig workers, the gap is even wider, with another 23.4 million lacking any workplace retirement option. Small businesses are impacted too, with 63% of employees in companies with fewer than 50 workers not having a plan available.

Moreover, keeping up with monthly expenses can be a challenge for most gig workers. A recent survey found that 6 in 10 independents can’t always cover their bills with job earnings alone. To fill the gap, workers often rely on other income sources (29%), personal savings (26%), or credit cards (24%).

That financial pressure makes saving even harder. Among 1099 workers, the top challenges included:

Saving for retirement (59%)
Budgeting for big expenses (50%)
Handling unexpected costs (50%)

Savings priorities also shift by age. Younger workers, or those aged 18 to 25, often focus on buying a car, while those aged 26 to 35 aim to build an emergency fund. For workers 36 and older, retirement security becomes the top goal.

Can Gig Workers Retire Without a 401(k)?

Yes—retirement is absolutely possible for gig workers even without a traditional employer 401(k). Options like Traditional or Roth IRAs let you save up to $7,000 in 2025 ($8,000 if you’re 50+), while SEP IRAs and SIMPLE IRAs allow higher contributions if you have self-employment income or employees.

For those who want to maximize savings, a Solo 401(k) lets self-employed workers put away up to $70,000 in 2025. These plans are flexible, tax-advantaged, and designed to fit fluctuating gig income, helping freelancers and contractors build a secure retirement on their own terms.

Self-Employed Retirement Account Options To Consider

Saving for retirement as a gig worker secures your financial future and provides valuable tax benefits.

With self-employed retirement accounts, contributions may be tax-deductible, and your investment earnings grow tax-deferred. Even if some accounts don’t offer immediate tax breaks, they allow your savings to grow faster than in a regular account.

1. Traditional or Roth IRA

An IRA is one of the simplest ways for freelancers and small business owners to start saving for retirement. In 2025, you can contribute up to $7,000 per year and $8,000 if you’re 50 or older.

Traditional IRAs' Key Features

Contributions may be tax-deductible if you meet income limits.
Earnings grow tax-deferred, and you’ll pay taxes when you withdraw in retirement.
If you also have a full-time job, your ability to deduct contributions may be limited by your income.

Roth IRAs' Key Features

Contributions are tax-deductible, but withdrawals in retirement, including earnings, are tax-free (as long as you’re at least 59 ½ and the account has been open 5+ years).
Income limits apply. If you earn too much, you may not be eligible to contribute.

Why an IRA Works for Gig Workers

Easy to set up with almost any bank or brokerage.
Flexible, as you can contribute when your income allows, even in small amounts.
Great for beginners or those rolling over an old 401(k) after leaving a traditional job.

Best for: Gig workers just starting retirement savings or anyone leaving a full-time job who wants to keep their savings growing.

2. Savings Incentive Match Plan for Employees (SIMPLE) IRA

A SIMPLE IRA offers higher contribution limits than a regular IRA and allows both you and your employees (if you have them) to contribute.

Key Features

Contribution limits are up to $16,500 in 2025, and a $3,500 catch-up for those 50 or older. Certain plans may allow slightly higher contributions, especially for those aged 60–63, with a limit of $5,250.
You can contribute up to 100% of your side gig income, as long as it doesn’t exceed the annual limit.
Contributions are generally tax-deductible, and employer contributions, for those with staff, count as a business expense. Withdrawals in retirement are taxed, unless you use a Roth SIMPLE option, where contributions are after-tax but withdrawals are tax-free.
Unlike a SEP IRA, where only you contribute, employees can defer part of their salary to the plan. Employers are typically required to match contributions, which helps attract and retain workers.

Best For: Gig workers and small business owners who have a few employees and want an easy-to-manage retirement plan. It’s useful if you want to give your staff a way to save for retirement while also taking advantage of tax benefits for your business.

3. Solo 401(k)

A Solo 401(k) works like a traditional employer 401(k), but it’s designed specifically for self-employed people or business owners with no employees (other than a spouse).

Key Features

The contribution limit is up to $70,000 in 2025 or 100% income, including employee and employer contributions. For those 50 or older, you can add an extra $7,500 in catch-up contributions. Ages 60 to 63 can contribute even more under Secure Act 2.0 rules, which is worth $11,250.
If your spouse works in the business, they can also contribute, potentially doubling what you save as a household.
Contributions are generally pre-tax, working like a standard, employer-offered 401(k).

Why It Works for Gig Workers

It lets you save significantly more than a traditional or Roth IRA.
Works even if you also have a 401(k) at another job (though combined employee contributions across all 401(k)s can’t exceed the annual limit).
It offers flexibility, so you can save more in high-earning years and scale back when your income is lower.

Best for: Self-employed gig workers or small business owners with no employees (other than a spouse) who want to maximize retirement savings.

4. Simplified Employee Pension (SEP) IRA

A SEP IRA (Simplified Employee Pension) is a flexible and easy-to-set-up retirement plan that allows for much higher contributions than a Traditional or Roth IRA.

Key Features

You can contribute up to 25% of your net self-employment earnings, with a cap of $70,000 in 2025. For calculation purposes, only the first $350,000 of compensation in 2025 can be used. No catch-up contributions are allowed, so make sure contributions are made by the tax filing deadline, including extensions.
Contributions to a traditional SEP IRA are tax-deductible. Withdrawals in retirement are taxed as ordinary income. Thanks to the SECURE 2.0 Act, you can also choose a Roth SEP IRA, where contributions are after-tax but retirement withdrawals are tax-free.
If you have employees, you must contribute the same percentage of their pay as you contribute for yourself. For example, if you save 10% of your earnings, you must also contribute 10% of each eligible employee’s compensation.
You don’t have to contribute every year, which makes the SEP IRA ideal if your income fluctuates.

Why It Works for Gig Workers

Higher contribution limits than Traditional or Roth IRAs.
Simple to set up and maintain.
You can skip contributions in lean years and save more in profitable ones.
It is best suited for solo freelancers or business owners with no or few employees. If you have staff, the equal-contribution rule can make it expensive.

Best for: Self-employed workers or small business owners who want a simple, flexible plan with high contribution limits and little paperwork.

Why Retirement Planning Still Matters (Even Without a Traditional 401(k))

Not having an employer-sponsored 401(k) doesn’t mean you should put retirement on hold. In fact, planning early is even more important when you work for yourself. Here’s why:

Time is Your Biggest Advantage

The earlier you start, the more compound interest can work in your favor. For example, saving just $200 a month starting at age 25 could grow to more than $300,000 by age 65 without changing the contribution amount. Waiting until age 35 to start could cut that in half.

Flexibility is on Your Side

Gig workers can choose from retirement accounts designed for the self-employed, like Solo 401(k)s, SEP IRAs, and Roth IRAs. These accounts offer tax benefits and high contribution limits, helping you save more efficiently.

Tax Savings Make a Difference

Contributions to accounts like a Solo 401(k) or SEP IRA can lower your taxable income today, while Roth IRAs let you grow money tax-free for the future.

Social Security Isn’t Enough

For many freelancers, Social Security benefits alone won’t cover all retirement expenses. Building your own nest egg ensures you’re not relying on a single, limited source of income.

Peace Of Mind Matters

Knowing you’re setting aside money consistently can reduce financial stress and give you more control over your future.

How Much Should Gig Workers Save for Retirement?

A good rule of thumb is to set aside 10–15% of your income for retirement. Another way to look at it is to aim to save enough to cover about 25 times your annual expenses by the time you retire.

For example, if you make $50,000 a year and save 10% ($5,000), over 25 to 30 years, and assuming steady investing, you could build a six-figure nest egg. If you manage to save closer to $10,000 a year, the long-term results are even stronger, giving you more flexibility and security.

The big difference comes down to lifestyle. Saving consistently could mean the choice between a comfortable retirement with options and a bare minimum retirement where every dollar is stretched. Even if you can’t contribute 15% right away, beginning with a smaller amount and slowly increasing it over time can make a huge difference.

Action step: Pick a realistic percentage of your income, like 5%, 10%, or more, and commit to saving it consistently.

Tools, Apps, and Tech That Can Help Streamline Saving For Retirement

You don’t need to do everything manually, as there are tools built to help.

Budgeting Apps like Mint, YNAB (You Need a Budget), and Empower help track your income and expenses, so you know exactly what you can afford to save.
Automated Savings Platforms like Betterment, Acorns, and Fidelity Go let you set up recurring contributions to retirement accounts, and even small amounts add up.
Freelancer-Focused Apps like Qapital are designed for irregular income and can automate saving for taxes, retirement, and other goals.

Why automation matters: When your income varies, saving manually can feel overwhelming. Automating even a small amount helps build consistency and reduces stress.

Common Mistakes Gig Workers Should Avoid

Many freelancers and self-employed workers miss out on long-term financial security because of a few avoidable missteps. Here’s what to watch out for:

1. Waiting Too Long to Start

The earlier you start, even with small amounts, the more compound growth can work in your favor. Don’t wait until income feels “steady” because consistency matters more than size.

2. Mixing Business and Personal Finances

Keeping everything in one account makes it hard to track how much you're earning and what you can afford to save. To help you track, open separate accounts for business income and personal use. This will simplify budgeting, taxes, and retirement planning.

3. Only Saving What’s Left Over

If retirement is always the last priority, it’ll rarely happen. Treat saving like a fixed monthly expense, just like rent or your phone bill. Automating even a small percentage can build momentum over time.

4. Forgetting About Taxes

It’s easy to overlook taxes when you’re focused on bringing in income. But if you’re not setting aside enough for both taxes and retirement, you’ll either fall short now or later. Budget for both from the start to avoid last-minute stress.

5. Pulling Money Out Too Early

It might be tempting to dip into your retirement savings during a slow month, but doing so can trigger taxes, penalties, and a major hit to your future gains. If possible, build a separate emergency fund to help you avoid tapping into long-term savings.

Building Your Retirement Without a 401(k)

While you may not have access to a traditional 401(k), you still have plenty of options at your disposal: IRAs, Solo 401(k)s, and SEP IRAs all give you ways to save consistently while also reducing your tax bill.

Even small contributions add up over time, especially when you start early and let compounding work in your favor. By avoiding common mistakes (like waiting too long, mixing finances, or only saving what’s left over) and taking advantage of automation, you can take control of your financial future.

The best time to start was yesterday. The second-best time is today. Pick one small action, whether that’s opening an IRA, setting up an automated transfer, or saving just 5% of your income, and take that step now. Your future self will thank you.

Disclaimer: Giggle Finance provides Revenue-Based Financing programs for business purposes only. Any mention of any loan product(s), consumer product(s), or other forms of financing is solely for marketing and educational content purposes and to help distinguish Giggle Finance’s product from other comparable financing options available in the markets.

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