Most people think 401(k)s are the best option for retirement savings, and they’re not necessarily wrong. 401(k)s have high contribution limits, plus the possibility of employer matching. But these accounts also have significant downsides, including limited access. Luckily, they’re not your only choice. Here are three other retirement accounts to consider instead of or in addition to a 401(k).

1. Individual Retirement Account (IRA)

IRAs are the most common 401(k) alternative because they are open to anyone. As long as you earn income throughout the year or are married to someone who is, you can set aside up to $6,000 in an IRA in 2022 or $7,000 if you have 50 years or more. These limits are lower than 401(k) contribution limits, but the IRA’s flexibility helps compensate for this.

You are free to invest in just about anything with an IRA. You can stick with the target date funds that many employers traditionally offer through 401(k), or you can create your own custom portfolio containing individual stocks, bonds, exchange-traded funds (ETFs) and even real estate.

You can also decide when you want to pay taxes on your money. Traditional IRA contributions reduce your taxable income for the year, but then you have to pay taxes on your retirement withdrawals. This makes sense if you think you are now in a higher tax bracket than you will be in when you retire. But otherwise, a Roth IRA is probably a better fit. These accounts do not offer initial tax relief, but you do benefit from tax-free withdrawals upon retirement.

2. Health Savings Account (HSA)

Health Savings Accounts (HSAs) were created to store medical savings, but the tax benefits they offer also make them an excellent home for retirement savings. Like traditional IRAs, HSA contributions give you initial tax relief. But HSAs also allow tax-free medical withdrawals at any age.

You can also make non-medical withdrawals, but you’ll pay taxes on these, plus a 20% penalty if you’re under 65. For this reason, it may not be the best home for all of your retirement savings. But it’s a great place to stash your retirement medical savings and the money you plan to spend after age 65.

You need a health insurance plan with a deductible of $1,400 or more for an individual or $2,800 or more for a family to open an HSA. If you qualify, you can open one with any provider. It is better to look for one that allows you to invest your funds so that they can grow faster.

Individuals can contribute up to $3,650 to an HSA in 2022, while families can contribute up to $7,300. Adults 55 and older can set aside an additional $1,000.

Do your best to leave your HSA funds alone if you plan to use the account for retirement savings. If you need to withdraw some for medical expenses, redo your retirement calculations to determine how much more you need to save in the future.

3. Independent retirement account

There are several retirement accounts for the self-employed, but they all have a few things in common. They give you considerable freedom to invest your money the way you want, and they also have high contribution limits – in many cases, even higher than 401(k). This is because you are entitled to contribute both as an employee and as an employer.

But your maximum contribution is also limited by the amount you earn. Many self-employed retirement accounts limit you to the lesser of 25% of your net self-employment income or $61,000 in 2022. So while you could contribute a lot in theory, in practice you might be better off with a other type of retirement. Account.

As long as you earn self-employment income during the year, you can use a self-employed retirement account, but it’s important to familiarize yourself with their rules before opening one. Some require you to make mandatory contributions to all employees’ retirement accounts, which can reduce the amount you have left for your own retirement.

You don’t have to choose just one

All retirement accounts have their pros and cons, and sometimes one isn’t enough. If you’re maximizing your IRA or HSA, for example, you might need a 401(k) or self-employed retirement account so you can set aside more money for retirement.

Think about how much you plan to set aside each year and which accounts are best for you. Then, open accounts, if needed, and start contributing.