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Dear Dr. Don,
I’m a 27-year-old pharmacist. I have about $25,000 in a 401(k) account from a previous employer. I’m not contributing to a 401(k) with my current employer, which doesn’t match employee contributions. I’ve looked into individual retirement accounts, but my salary as a single man is too high for me to contribute. I have just purchased my first home and am looking for additional ways to save and invest. Do you have any ideas about how to save for retirement?

— Kevin Compounds

Dear Kevin,
While it would be nice if there were a company match, the lack of a match isn’t a good reason to avoid contributing to the 401(k) plan. Better reasons to skip the 401(k) plan would be if you didn’t like the investment options or you thought the fees and expenses were too high.

Chances aren’t good that you can persuade your management to provide matching contributions, but you might be able to get the company to improve investment options and possibly reduce any fees and expenses.

No matter what, you can always contribute to a traditional individual retirement account up to the lesser of your compensation or the annual contribution limits. In your case, it would be the annual contribution limits. The question becomes whether the contributions are tax deductible. If they’re not, you can still contribute. You could even decide to contribute to a traditional IRA and then convert it to a Roth IRA, if your income is currently too high to contribute directly to a Roth IRA.

Taxable accounts don’t generate the enthusiasm of tax-advantaged retirement accounts, but there’s nothing wrong with building your wealth through taxable accounts. Be sure to understand how you’ll be taxed on investment earnings and capital gains. A tax professional can work with you on managing the tax bite.

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