1702 Viewmont

When you buy through our links, Insider may earn an affiliate commission. Learn more.

  • I started my SEP IRA at 30, but I wondered if there were other, nontraditional options for retirement.
  • I asked financial planners how their millionaire clients saved. They shared four strategies.
  • Avoid debt, re-invest assets from cash, develop passive income streams, and slash expenses.
  • Check out Vanguard Personal Advisor Services® to get the investment advice you need to help build the life you want »

Loading Something is loading.

For most of my 20s, when the topic of a 401(k) or IRA came up in conversation, I rolled my eyes and proclaimed that a retirement fund was not something that I needed. Instead, I was eager to spend the money I was making in the present, paying for rent and ongoing credit card bills. It wasn't until I was on the brink of turning 30 that I made

I realized that if I didn't start planning for the future, I'd never be able to retire. This recurring thought pushed me to take control of my finances and open up a SEP IRA. I'm happy to be saving for retirement now, but I still wonder if I could retire comfortably without saving into a traditional retirement account.

To find out, I asked financial experts if any of their millionaire clients had retired without traditional retirement funds. Here's what they had to say. 

1. They didn't take on debt

It turns out you can retire as a millionaire without robust traditional retirement funds. However, financial planner RJ Weiss says that to do that, you have to make sure you're not carrying debt. 

"The people who've managed to build up a $1 million-plus net worth , without using a 401(k) or IRA, have managed to carry very little debt during both their working years and once they hit retirement," says Weiss. "This is important, and not to be understated, as one without constant debt payments throughout their life can take more risk with their overall portfolio, which may entail not saving in traditional retirement accounts."

2. They have income-producing assets 

If you don't want a traditional retirement fund, it's still smart to have a plan for how you'll earn income once you decide to stop working full-time. Weiss says that's why people who retire rich spend time building up a portfolio of income-producing assets that can generate consistent cash flow throughout their retirement years.

"This may include a small business they were responsible for building throughout their life that is now run by family members," says Weiss. "Yet, it still pays out a salary even if the owner is no longer working in it full-time. Or, it could be a diversified mix of cash-producing real estate that the retiree has built up throughout the years, one property at a time, and which is currently being rented out and bringing in monthly income."

3. They live on half of what they earn 

An interesting approach that financial planner Ronit Rogoszinski has seen work is when a person lives on half of what they earn.

Rogoszinski has a client who lives below her means to ensure she has plenty of money saved for retirement. 

"Living below her means doesn't mean she isn't budgeting for fun. She is simply looking for the best deals and living within a very narrow budget that affords her all the luxuries we all enjoy only at the lowest cost she can find," says Rogoszinski. "She is planning on cutting back her hours at work when she turns 60, and although she can retire, is choosing to continue to work because she simply loves what she does and hopes to continue as long as she can."

4. They re-invest the cash they earn from assets 

Financial planner Faron Daugs, founder and CEO of Harrison Wallace Financial Group, says that if you're not going to have a traditional retirement fund, you should make sure that income or distributions you receive from assets get re-invested.

"The key is to keep the reinvestment going and be disciplined about putting money back into successful businesses, real estate projects, or into stock market-related investments from cash flow created from rental and other business activities," says Daugs.

Jen Glantz is the founder of Bridesmaid for Hire, a 3x author, the host of You're Not Getting Any Younger podcast, and the creator of the Pick-Me-Up  and Odd Jobs newsletter. Follow her adventures on instagram: @jenglantz.

Read more Read less