5 Ways To Save For Retirement If Your 401K Is Screwed

piggy bank on top of 100 one hundred dollar bills

If Donald Trump’s proposed tax plan, complete with its butchery of 401K accounts, gets passed, saving for retirement will be a lot harder: If your maximum 401K contribution drops from $18,000 to $2,400, you know what else is diminished? Your interest, your compound interest, and, quite possibly, your life expectancy, because, well, look at what he’s trying to do to healthcare, too. That said, there are other ways — though not necessarily as lucrative or foolproof — to sock money away for when you’re old and gray. Here are a few of them.

1. Open an IRA ASAP. I recommend going with a Roth IRA. Unlike a traditional IRA, you don’t get a tax deduction for contributing to it, but you won’t have to pay taxes on it later when you actually plan on using the money. The maximum contribution for IRAs or Roth IRAs is $5,500 a year. You can have both, but your maximum contribution to both combined is capped at $5,500 (so you can throw $3,000 in one and $2,500 in the other, not $11,000 total).

2. Be sure to claim the saver’s credit on your taxes. Contributing to an IRA or a Roth IRA can make you eligible for the saver’s credit, so take advantage of it, because the government is really only using your hard-earned money to pay for Steve Mnunchin’s wife’s ugly ass coats right now. The credit is typically worth between 10 and 50 percent of whatever you contributed to your retirement savings, and the credit amount is scaled according to your income.

3. Consider a MyRA. Gotta love former President Barack Obama, who instated the MyRA plan for those who lack workplace retirement accounts. Investors earning less than $129,000 can save $5,500 per year with a maximum account balance of $15,000. MyRAs are similar to Roth IRAs in that you won’t get taxed if you withdraw from them, even if you withdraw from them early — as long as you’re withdrawing from the principal, not the earnings.

4. Save your tax refund. The 888 form from the IRS lets you deposit your tax refund, if you get one, directly into retirement accounts.

5. Save up in a CD. You won’t get much in terms of interest, but the money will be there without penalty if shit really hits the fan. Try to have enough for a few months worth of expenses (rent, food, utilities) in case of an emergency.

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