Retirement Savings Alternatives: CDs, IRAs & HSAs

May 12, 2026, 5:02 a.m. ET

There are many reasons you might be interested in building your retirement savings outside a 401(k). Maybe your employer doesn't offer a 401(k) plan, you're already maxing yours out, or you don't want to put all your eggs in a single basket. Whatever the reason, a 401(k) is not the only way to invest money for retirement.

Here's a sample of other smart ways to ensure you're ready for everything retirement tosses your way, from taxes to healthcare costs.

1. Certificate of deposit (CD)

A CD is a savings product offered by banks and credit unions. If you're willing to shop around for the best rates, you can easily find CDs paying more than 4% (as of May 2026). Here are some of the most attractive features associated with CDs:

• You get a fixed interest rate and guaranteed returns.
• They're insured by FDIC or NCUA for up to $250,000 per depositor, per institution.
• They typically offer higher interest rates than traditional savings accounts.
• With terms ranging from three months to 10 years, you get to decide how long to lock your money in.
• It's easy to build a "CD ladder" by opening multiple accounts with staggered maturity dates. For example, you may open a CD with a three-month term, another with a six-month term, and so on. That way, you have regular access to funds.
• Most CDs don't carry maintenance fees.
• Interest may compound daily, monthly, or quarterly, all of which increase your overall return.

2. Traditional individual retirement account (IRA)

If you're looking for a powerful alternative to a 401(k), you can't do much better than a traditional IRA. Here's why:

• It allows you to invest whether you are self-employed, work for a small business, or just want to diversify beyond the plans your employer offers.
• The contributions you make may be tax-deductible, reducing your current taxable income.
• As with a 401(k), investments grow tax-deferred until retirement.
• They're a good option if you expect to be in a lower tax bracket in retirement.
• If you're under 50, the contribution limit for 2026 is $7,500. If you're 50 or older, you can add a catch-up amount of $1,100 for a total annual contribution of $8,600.

3. Health savings account (HSA)

"High-deductible health plan" (HDHP) may be the most dreaded words a newly insured person can hear. However, if you have a HDHP, you're eligible to open an HSA. Here's how it can benefit you, even in retirement:

• There's a triple tax benefit. Not only do you get to make tax-deductible contributions, but the account grows tax-free, and you make tax-free withdrawals for medical expenses.
• Once you turn 65, you can withdraw funds for any purpose. If you use those funds for medical expenses, you won't pay taxes on the amount withdrawn. If it's for non-medical expenses, the money is taxed as ordinary income.
• You'll never need to make a required minimum distribution.

As you prepare for retirement, it's good to gather your options and get to know each of them. The goal is to put your hard-earned money where it's most likely to grow and provide you with the kind of retirement you hope for.

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